Summary List Placement
Retail investors — especially from the infamous subreddit WallStreetBets — helped force one of the top-performing hedge funds of the last half-decade to secure billions in emergency funding from two ultra-competitive peers.
Now, funds are planning to keep as close of an eye as possible on the social media platform, angling to not just avoid getting burned but also to extract insights and capitalize on other shifts in stocks in the Reddit crowd’s crosshairs.
One data scientist at a fund told Insider they created a scraping tool this weekend to monitor tickers being discussed on the site to make sure their fund’s short book isn’t caught in the next YOLO trade. Thinknum, the web-scraping data provider, is in the process of building a Reddit-specific dataset after “insane client demand,” according to cofounder Justin Zhen. The new tool will track ticker mentions in certain subreddits including WallStreetBets.
The rapidly growing subreddit, now with over 2.4 million members, maintains a dashboard of data insights, and other users have created tools of their own to make sense of the metadata from Reddit’s stock-investing community.
Eagle Alpha, which connects hedge-fund clients to alternative-data providers, meanwhile has noticed an increase in demand for data on retail investors this month, with a specific focus on Reddit. Interest in this data originally started in the fourth quarter of last year, in part because Robinhood cut off the trading data that many funds were using, but Hugh O’Connor, the firm’s global director of data sourcing and partnerships, said “there’s been a surge in interest in requests that have come in the last month.”
See more: Bloomberg just paid more than $100 million for an upstart alt-data player. Here’s why that marks a huge turning point for a once-fringe business.
The talk of Wall Street this week has been the meteoric rise of shares in GameStop, the video-game retailer that had been struggling thanks to the pandemic and a shift to buying games directly on consoles, and a big stumble by Melvin Capital, led by one-time golden boy Gabe Plotkin.
Plotkin’s fund had big bets against GameStop, which became a favorite of the WallStreetBets crowd thanks in part to Chewy.com founder Ryan Cohen’s addition to the company board. Melvin’s puts against GameStop were revealed in regulatory filings, putting his fund and select others like short-seller Citron Research in the crosshairs of the subreddit. GameStop has soared, and Cohen personally has seen his 12.9% stake in the company swell to more than $1.3 billion as of Tuesday’s trading close.
Melvin is down at least 30% this year, according to the Wall Street Journal, thanks in part to GameStop but also a slew of other losing short bets, including National Beverage and Bed Bath & Beyond.
Plotkin, whose fund made more than 50% last year and managed $12.5 billion heading into the year, received $2.75 billion on Monday for a non-voting revenue stake in his manager from Citadel founder Ken Griffin and Plotkin’s former boss Steve Cohen.
The swift reversal of fortunes …read more
Source:: Business Insider
Powerball ($640M), Mega Millions ($850M) among all-time top US lottery prizes. Here are the winning