GameStop Insanity: Stock Hits $365, Then Dips After Shorts Melvin, Citron Capitulate

The "most-shorted" short squeeze, led by the infamous GammaStop GameStop, continued overnight with our basket of most shorted names...

... exploding in the early hours and pushing GME as high as a record $365...

.... before the stock slumped following a report from CNBC that Melvin Capital, the nemesis of r/wallstreetbets which needed a $2.75BN bailout from Citadel and Point72 to avoid a terminal margin call, had "closed out its short position in GameStop on Tuesday afternoon after taking a huge loss" the fund's manager Gabe Plotkin told CNBC’s Andrew Ross Sorkin. It was unclear what exactly this meant: did Melvin merely sell its now worthless puts, or did it also have associated GME shorts on the underlying stock? We assume both, although it could very well just be fake news and an attempt to deflect the relentless WSB army of daytraders. Until there is official confirmation from Mevlin, we should treat this information as suspect.

Additionally, moments after the CNBC report, short-seller Andrew Left's Citron Research fund also announced in a Twitter clip that it had covered most of its GME short yesterday around $90.

In the clip, Left admits his call last week for GME dropping from $40 to $20 was a mistake even though Citron Capital "is just fine", and was cautiously deferential to the meme/WallStreetBets crowd. Some of his key quotes:

"I'm doing this video because I cannot answer one more phone call..."

"I'm just fine. Citron Capital is just fine. Covered a majority of the short in the $90's..."

"I learned from Tilray, it was a killer. It went all the way back to $6. I expect the same thing from GameStop, but I have respect for the market. I also have respect for the people at the WallStreetBets Reddit message boards. Before there was WSB, there was Citron Research. We were the voice of the individual investor against the institutions."

"I never got personal, I never got nasty, I never threatened a corporate executive or their shareholders. It was always business."

"We'll become more judicious when shorting stocks. It doesn't meant the industry is dead, it means you have to be more specific."

"When you make your profits, make sure you put some away for the IRS. That money is not all your money. But at the end of the year you do owe tax money."

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