GME Stock Forecast: Despite Melvin Capital meltdown, GME shares drop 1.8% on Friday

NYSE:GME gained 8.43% during Thursday’s trading session.
Melvin Capital announces it will liquidate its fund.
Robinhood launches an NFT app in preparation for Web3.

Stocks Reporter FXStreet

UPDATE: GameStop stock is losing its footing early on Friday, one day after it failed to obtain the $100 threshold. 45 minutes into the regular session, GME shares are off 1.77% at $97.43. All three major indices are up in the first hour, with the Nasdaq advancing 0.25%. Nearly 3,000 call contracts will expire at the end of the session for the $100 strike. About 700 contracts have traded there already this morning, with the most recent price being $2.23.

NYSE:GME failed to re-claim the $100 price level on Thursday, but meme stock investors were in a celebratory mood after the downfall of one of the short squeeze villains. Shares of GameStop surged by 8.43% and closed the volatile trading session at $99.19. US markets jumped out of the opening bell but the selling pressure continued and all three major averages closed another day in the red. The Dow Jones lost 236 basis points, while the S&P and NASDAQ fell by 0.58% and 0.26% respectively during the session.

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One of the largest short sellers of GameStop’s stock back in January of 2021 has decided to close down shop and liquidate its fund. Melvin Capital, the hedge fund that was infamously liquidated during the initial short squeeze is finally closing down its fund and looking to potentially restart fresh in the future. The fund has lost nearly 25% of its worth over the first quarter of 2022, and has struggled to make any gains since its initial losses from betting against meme stocks. Between 2014 and 2020, Melvin Capital had average annualized returns of 30%, but that number dropped to 11% if you include the time since the short squeeze.

GameStop stock price

Another major player in the short squeeze saga has announced some major upgrades to its brokerage platform. The beleaguered trading app Robinhood (NASDAQ:HOOD) recently announced it will be adding an additional stand alone wallet for users to hold their NFTs and cryptocurrencies. The idea is similar to what the popular Ethereum-based wallet, MetaMask does, and will be Robinhood’s first foray into the Web3 space.

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Stocks Reporter

FXStreet

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