(Reuters) - Retail traders scored against professionals on Wednesday as hedge funds Citron and Melvin retreated with heavy losses on short positions in GameStop in the week-long battle between Wall Street and Main Street, with more calling for scrutiny of anonymous stock trading posts on social media.
Funds sold long positions in stocks to pay for the losses, which sparked a 1% slide in Wall Street’s main indexes. GameStop stock closed up 15.8 percent. The shares ultimately closed down 0.7 percent after Friday's profit warning sent a shockwave through the retailer's customers.
Earlier this week, Merrill Lynch analyst Scott Sepulich ripped into anonymous people on Twitter - alleging big-money advisers and hedge funds profited on short bets on the retailer recalling millions of game consoles after reports that hackers had infiltrated its security system in early July.
On Thursday, BuySide analyst Wayne Stanley took it a step further, saying the campaign against GameStop was similar to large-scale efforts against other video game companies Bloomberg reported on on Monday. As a result, he wrote, investors who had already had accounts less than a month should wash their hands of the stock or sell.
"More concerns are coming," he said in his research note, suggesting securities regulators better watch out for flotsam on the market.
The Evans Analytics data included posts from 0600 GMT on Tuesday and has since been pulled.
Graphic embed is no longer available.
The trade at stake has formed the background for much of the rest of the trading to follow, concluding with GameStop reporting a sad quarter with same-store sales down 2.2 percent.
G-3 Associates Inc, a packaged goods retailer featuring brands ranging from Ben and Jerry's Ice Cream to Star Wars boots, also was victimized in a short that was also scored, costing the company $2 million in opportunity loss.
Mutual fund firms have become the catalyst for selling trader stocks as stocks of a number of major companies that had fallen backward have made strong gains.
Synovus Energy Inc (NOVU.TO) has done so recently after falling more than 10 percent in the previous week, after investors were blamed for pushing the stock up on negative reports from shale producers.
Tesla Inc (TSLA.O) Another example: "Hedge Fund Machinery Busted!" The name of a popular viral video on the website refers to one investor's ill-fated-but-thoroughly-deserved ponzi scheme.
AIG precipitated some banqueting as well, as a busted chart put together from money raisers panicking about the stock after it suffered another slump, making regulators blink and its chief executive take to ABC News to deny the allegation that the company is being profited on all sides. He jokingly blamed government regulations; the chart shows AIG gains topping $15 billion.
Funds sold long positions in stocks to pay for the losses, which sparked a 1% slide in Wall Street’s main indexes. GameStop stock closed up 15.8 percent. The shares ultimately closed down 0.7 percent after Friday's profit warning sent a shockwave through the retailer's customers.
Earlier this week, Merrill Lynch analyst Scott Sepulich ripped into anonymous people on Twitter - alleging big-money advisers and hedge funds profited on short bets on the retailer recalling millions of game consoles after reports that hackers had infiltrated its security system in early July.
On Thursday, BuySide analyst Wayne Stanley took it a step further, saying the campaign against GameStop was similar to large-scale efforts against other video game companies Bloomberg reported on on Monday. As a result, he wrote, investors who had already had accounts less than a month should wash their hands of the stock or sell.
"More concerns are coming," he said in his research note, suggesting securities regulators better watch out for flotsam on the market.
The Evans Analytics data included posts from 0600 GMT on Tuesday and has since been pulled.
Graphic embed is no longer available.
The trade at stake has formed the background for much of the rest of the trading to follow, concluding with GameStop reporting a sad quarter with same-store sales down 2.2 percent.
G-3 Associates Inc, a packaged goods retailer featuring brands ranging from Ben and Jerry's Ice Cream to Star Wars boots, also was victimized in a short that was also scored, costing the company $2 million in opportunity loss.
Mutual fund firms have become the catalyst for selling trader stocks as stocks of a number of major companies that had fallen backward have made strong gains.
Synovus Energy Inc (NOVU.TO) has done so recently after falling more than 10 percent in the previous week, after investors were blamed for pushing the stock up on negative reports from shale producers.
Tesla Inc (TSLA.O) Another example: "Hedge Fund Machinery Busted!" The name of a popular viral video on the website refers to one investor's ill-fated-but-thoroughly-deserved ponzi scheme.
AIG precipitated some banqueting as well, as a busted chart put together from money raisers panicking about the stock after it suffered another slump, making regulators blink and its chief executive take to ABC News to deny the allegation that the company is being profited on all sides. He jokingly blamed government regulations; the chart shows AIG gains topping $15 billion.
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