26th January 2021

GameStop shows no sign of stopping 🤑 🤑 🤑 🤑

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Welcome to another edition of Under60 Daily - a brief rundown of the top happenings in the business world, compiled by hand to exclude the clutter and ensure you get up to speed in under a minute.

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*SENSEX is closed on 26th January on account of Republic Day. The 25th January closing is displayed. 

[Hedge Funds] Melvin Capital has solicited a $2.75 billion investment from hedge fund rivals Citadel and Point72. Melvin Capital, founded by Gabe Plotkin, suffered from double-digit losses in January 2021. Melvin Capital is rumoured to be one of the institutional short sellers of GameStop (Read the last bit of news on this newsletter to understand why it sucks to be Melvin Capital). 

Over60: Seeking Alpha, WSJ, What is short selling?

[SPAC] SPACs agreed on mergers worth more than $15 billion on Monday alone, highlighting the shift in companies approaches towards going public in 2021. A $7.3 billion merger of Alight (a cloud HR benefits provider) with a SPAC was the top deal on Monday. SPACs have supposedly raised $18.3 billion in this year, compared to the $13.2 billion that traditional IPOs have raised. Interestingly, talks of Liverpool FC going public via a SPAC fell through yesterday. 

Over60: FT, Reuters

[Private Equity] CEO and Founder of Apollo, Leon Black, has reportedly stepped down as it was revealed that he made larger payments to Jeffrey Epstein than anticipated. Black reportedly paid $158 million to Epstein in relation to Epstein’s advice surrounding Black’s estate planning. 

Over60: The New York Times

[Venture Capital] Clubhouse, a voice chatting app, has raised $100 million at a $1 billion valuation from Andreessen Horowitz. Clubhouse has reportedly touched two million users despite starting operations a year ago. 

Over60: Axios

[Cinema] One of the world’s largest cinema operators, AMC Entertainment has announced that it has raised nearly $1 billion via debt and equity markets in the last month, putting off plans of immediate bankruptcy. The chain experienced a 90% reduction in cinema attendance and spent nearly $124 million of cash a month to remain operational. 

Over60: CNBC

[Markets] Shares of GameStop and Blackberry soared to new highs, mainly due to the rise of ‘Robinhood investors’ flooding social media with buy calls. The record surge in GameStop’s share price was against the ideology of institutional investors (Citron Research was bearish on GameStop). The ‘You Only Live Once’ (YOLO) approach to trading resulted in one trader piling his $53,000 life savings into GameStop, only to exit with an $11 million gain. GameStop is up 375% this year. 

Over60: FT, Business Insider

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