Login

Hedge fund founder who made a $400 Million bet against Nintendo ends up losing out

A couple days ago, we shared a story on U.S. hedge fund manager Gabriel Plotkin and his bet against Nintendo. He was thinking Nintendo would disappoint with their Q1 results, so he made a $400 million 'bet' by short-selling Nintendo stock. Now that we know Nintendo's Q1 results, you can probably guessed how it worked out for Plotkin.

Nintendo showed some very healthy results, so much so that it beat the majority of analyst projections. The figures were good enough to bump up Nintendo's stock by over 7% in just one day. The gamble that Plotkin took ended up not going in his favor, which means Melvin Capital Management is currently down to the tune of $27 million.

Categories: General News

Comments

Top Rated Comment
noxide
Wed Aug 01 18 07:35am
Rating: 10 (Updated 1 time)

It may be messed up that some people lose their money however the more often hedge funds fail, the less often they will be used.

You can’t have a bleeding heart towards the people who knew they were getting into the business of making money.

/insert the tiniest violin ever here

And I'm sure someone got a stern talking to afterwards

Hahahaha. This is just too funny :D

It's not funny... In the end they didn't gamble with their own money, it was money from pensions and whatnot... And the dip is also not that severe, as they probably started shorting some time ago...
Hedge funds can be borderline market manipulation sometimes... I can't claim to understand any of this, but seems really unfair, the whole thing...

noxide
Wed Aug 01 18 07:35am
Rating: 10 (Updated 1 time)

It may be messed up that some people lose their money however the more often hedge funds fail, the less often they will be used.

You can’t have a bleeding heart towards the people who knew they were getting into the business of making money.

It was a stupid bet. Just some fat cat who knows nothing about the industry trying to follow patterns that dont exist in gaming.

sligeach_eire
Wed Aug 01 18 07:50am
Rating: 1 (Updated 2 times)

Another gutter press tabloid headline from NintendoLife. I expect nothing less from that rag. The site has gone seriously downhill since Thomas Whitehead left, though it was already slipping at that point. Always late with the news, often factually incorrect and/or lacking detail. Very sloppily written too with lots of basic grammar mistakes. If they're not posting yesterday's news they're trying to make commission off links to overpriced ads. And the site is full of obnoxious fanboy trolls. There are nice people there too but they're unfortunately overshadowed by the trolls. All reasons why I stopped visiting that site some time ago. They've also become Nintendo UK's little lapdog with biased reviews. They've earned a reputation for giving scores about 10% higher than the average.

The guy here in question hasn't lost any money but that won't stop NL from creating sensationalism and lies.

It should read: "If you bet against Nintendo, you're a loser."

“And the site is full of obnoxious fanboy trolls”

....You mean like YOU were there for years???? LOL

panurgejr
Wed Aug 01 18 09:59am
Rating: 1

And there's exactly one reason why he stopped visiting: they got tired of him and banned him. Read the rest of his rant in that context.

jayvir
Wed Aug 01 18 10:07am
Rating: 1

Basically this. Over and over. Your attitude is what is the problem and the site has had no problems since. Now your negativity in every article here is frustrating

*bzzz*

Nurse, he's done it again. Get some fresh sheets. This is going to need a boil wash...

Can't you just move on and leave the past alone?! While I agree with a lot of what you said you just need to let go. I will even admit I miss you a bit over there and while they have gotten worse I'm on gaming sites far less then I use to be. I just check the news a couple times a day and don't need to know the second it happens. Also that new guy is no longer in charge Dom I think was his name. Good luck to ya and I hope you have a great life.

Hi Spoonytech, I remember you well from NL. You were pretty prominent there. Yes Dom was the appointment as replacement for Thomas, he was in way over his head, really bad appointment. Last I heard he's still there, though some of the other staff help out on the site more now. I like having my news instantly and always look for the latest happenings. I know I rubbed some people up the wrong way on the site, that's just the way I am, thanks for the well wishes and right back at you.

But how do you really feel?

kiwi_shenron
Wed Aug 01 18 09:26am
Rating: 2

I'm enjoying this story, but from the perspective of a day trader. Speculative buying (going long) based on news that is already out is almost always recommended. Example: company X releases their quarterly earnings on Monday at 6PM. Numbers are good, and so speculative buyers take long positions in anticipation of the stock rising during Tuesday's trading session or even overnight with international traders and after-hours traders. 90% of the time, this will get you paid (as long as you know when to get out).

But taking a long-term short position on a future earnings reports is the very definition of gambling.

Ratmasterd21 is actually pretty on - there are trends that inform risk takers of possible payouts, but the gaming industry is so different. It's more consumer-driven than 98% of other so-called 'consumer products', and therefore doesn't have to adhere to any patterns.

But more than anything, *anything* else, if this guy had really done his research, he would have known the golden rule:

Never, ever bet against Nintendo. B-)

tdude73
Wed Aug 01 18 10:51am
Rating: 1

In the words of Wesley Snipes, "Always bet on Nintendo."

sligeach_eire
Wed Aug 01 18 09:08pm
(Updated 1 time)

I had written out a long response but then deleted it as really it's none of your business. All I'll say is people here haven't a clue about what happened over on NL. I didn't run a foul of the mods, hell they didn't even know for months what happened. As some will know, I've been critical of the site, both publicly and privately. I've had to put up with a lot of crap over the years there, be it stalkers, vile abuse that really warranted the intervention of the authorities on some occasions, impersonators, etc. Anyway, I only ran a foul of one person over there, and crucially it was the founder and owner of the site. I guess he took it personally. Maybe I should take it as a compliment that he cared so much what I had to say. I've had a lot of correspondence with him behind the scenes on a whole range of matters. Banned on St. Patrick's Day as well, hhmmm, funny the timing there, eh. And strange that it happened when I changed my avatar briefly for the first time ever, the Wii U logo in Irish colours. I got a lot of attention on the site, both good and bad, still do and I haven't been there in months. I've had a lot of support from people with private messages on other social media. Someone even mentioned my earlier comment here over there, but people are asked now by the mods not to talk about me anymore.

And some good came from my criticism. Like how the weekly charts are a bit better now, though not as detailed as my posts were. Or how I criticised the site for effectively shutting down at the weekend from Friday afternoon until Monday morning. The news doesn't stop at the weekend, so neither should NL. All that used to happen was the odd review or a what are you playing this weekend story, though that is relatively new too and copied from other sites. They post a bit more news at the weekend, though they're not on the ball like other sites, they never really have been. They recycle other sites news stories.

Back to this story, Nintendo's share price has been decreasing for months now. The story about this fella buying the shares, which I sent in to GoNintendo and which NintendoLife reported on a day later(no surprise), bugs some people, it's not nice but it's a legitimate and legal form of trading. So Nintendo's shares see a bounce after posting their quarterly results and NL jump on their tabloid horse, sensationalising everything and conveniently leaving out the truth. The guy doesn't have to sell his shares today or tomorrow or anytime soon for that matter. Even if he did sell today, he still likely wouldn't lose money as he bought the shares some time ago when their value was even lower. He can sit on the shares for by reports, up to 8 months. The general trend is for Nintendo's share price falling, so it's likely that trend will continue, but who knows. If we all could predict the markets, we'd be millionaires. The $27m is the difference between yesterdays valuation and todays and again that's only if he cashed in today. And if you read the original story, you'd see this guy is no mug.

In yo face hedge hog

Want to join this discussion?

You should like, totally log in or sign up!