Wall Street is bracing for a second attack by minority traders Reddit users

Wall Street is bracing for another week of market chaos amid signs that the shopping frenzy has fueled the stock prices of companies like GameStop Corp and AMC Entertainment Holdings Inc. it spreads to other assets.

Some of Wall Street’s largest hedge funds are still licking their wounds after minority traders attempted to raise the prices of stocks they had heavily bet against, resulting in massive losses for major investors.

Melvin Capital, a hedge fund central to the GameStop drama, lost 53% in Januarybut received new cash pledges from investors in the last days of the month, Reuters reported Sunday.

Melvin ended January with more than $ 8 billion in assets, after starting the year with about $ 12.5 billion, according to a person familiar with the case.

On Friday, Andrew Left of Citron Research, who has spent two decades building his brand as one of the world’s best-known short sellers, announced that he will not give more public details about the companies they are short gambling against, after the severe setback he and others have suffered who said the GameStop documents were not worth their price.

“We saw the strength of a new investor base, in terms of its ability to shape not only the fortune of an individual stock, but also the fortune of a large market segment such as the Russell 2000,” said Sunil Krishnan of Aviva Investors.

Now signs are mounting that the retailers who moved the market last week they look beyond US equities.

On Thursday and Friday, the price of silver skyrocketed, up about 10% since the messages began circulating on the social media platform Reddit urging retail investors to enter the market and raise prices. Gold also improved.

Such market movements have highlighted the growing importance of retail operators in the financial markets, which in the past was dominated by larger institutions.

“What has been surprising in recent months is that the scale of retail participation is starting to change the dial,” said Paul O’Connor of Janus Henderson in London.

“If you look at the data from a few months ago, you can see what’s going on. It’s not like these guys woke up last weekHe added.

With information from Reuters

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