Betting against the crowd isn’t always smart.
Hedge fund Melvin Capital reportedly lost US$4.5 billion in assets value in January – a 53 percent drop – after its massive bet that GameStop’s stock price will fall turned sour, the Financial Times reported Sunday. And that’s after a US$2.75 billion cash infusion from previous investors, who jumped in to save the fund from collapse.
For an explainer of what happened, go here, but the short version is that Melvin, as well as some other…