You might think that the hordes of Redditors and Robinhoods would be done with Gabe Plotkin. They had cost him hundreds of millions of dollars and his investors billions of dollars. They forced him into a humiliating retreat on his GameStop short film. They left him no choice but to shake hands with Ken Griffin and his old boss – to whom he had also lost a pretty penny – to keep his Melvin Capital management afloat.
But no, because not only do they claim to channel their anger onto their formerly preferred trading platform, but they also claim that losing more than half your money on a single high leverage short was part of Plotkin’s master plan to piss the little boys off who thought they were kidding him.
Gabriel Plotkins Melvin Capital, the hedge fund at the center of the GameStop trading frenzy in January, is a defendant in nine retail investor trials alleging a conspiracy to limit trading that resulted in their losing money. The lawsuits were filed on behalf of investors in New York, California, Virginia, Illinois, and Texas.
An alleged class action lawsuit filed in the Eastern District of New York on February 8th said the allegations “stem from a conspiracy to rob individual investors … of their ability to invest in the open market in the midst of an unprecedented market[ed] Stock rise to allow Defendants to protect themselves from substantial losses from their own high-risk short-selling strategies. “
According to the lawsuit, buying restrictions were only imposed on retail investors, not institutional investors such as the hedge funds named in the complaint that were “leveraged short” and had a vested interest in prices falling so that they could cover their short positions at lower prices … . The lawsuit filed in the Eastern District of New York alleges that hedge fund defendants “made false statements about their role in the conspiracy to the public.”
Anyway, not that the above cases, which Melvin naturally says are “without merit,” nor frankly the GameStop share price, which is not tied to reality, but the company im Center of the litigation continues its conversion into an asset that could one day earn a slightly larger fraction of that stock price.
GameStop Corp announced Tuesday that its chief customer officer, Frank Hamlin, will leave the company on March 31st. This is the latest sign of a major overhaul to the video game retailer, being pushed by its major shareholder, Chewy.com co-founder Ryan Cohen. GameStop also said last month that CFO Jim Bell would resign…. Cohen hopes to transform the brick and mortar retailer into an e-commerce company that will partner with major retailers like Target Corp and Walmart Inc, as well as tech companies like Microsoft Corp and Sony Corp. can accommodate.
Melvin Capital faces nine lawsuits related to the GameStop madness [II]GameStop loses the second executive as the shakeup deepens [Reuters]