BOSTON: Hedge fund chief Gabriel Plotkin first bet on GameStop Corp’s prospects in 2014, when the stock was trading at $40. But he’s suffered from rapid selling in recent weeks, and he’s wary of taking another huge quick position.
But last month, he became one of the most famous players in currency trading when retailers massively increased the stock of his online game store after his hedge fund sold short and predicted a decline in value.
He spent more than five hours Thursday answering questions from U.S. lawmakers about how his Melvin Capital Management Inc. fund lost 53 percent of its value in January and a lot of cash, and how he wasn’t happy with the fund’s treatment.
But the fund’s president expressed remorse, saying he had to make money for his buyers, and turned the camera to say he was offended by the main street buyers who banded together to fight the professionals.
“They took advantage of a quick promotion, so we have to adapt and the whole industry has to adapt,” Gabe Plotkin said.
“I don’t think buyers like us want to be hurt by this. Whatever rules are in place, we will follow them.
Plotkin said Melvin works for the company and always follows the rules for financial transactions. If that’s the basis, I will always follow it,” he said.
He said GameStop is a struggling video retailer with structural problems and declining revenues.
“When we have to find tenants, our technology puts pressure on us,” he said, explaining that Melvin doesn’t do “naked shorts,” which are prohibited.
He didn’t get into a discussion about the benefits of fast-track promotions.
When asked what he thought of Musk’s tweet, he replied “Gamestonk!” (which seems to support the title), he avoided discussing the issue with Elon Musk, believing he should focus on Musk’s unique offering for electric car maker Tesla Inc.
“I’m not going to speculate on the motivation for his tweet. Stocks are rising,” Plotkin said diplomatically.