/biz/ - Business & Finance

>Start with Shkreli's record as head of MSMB Capital Management, the hedge fund he launched in 2009. According to the SEC, he took in $660,000 from investors starting in November 2009; by November 2010, $331 was left. Some of the money allegedly went to fund Shkreli's lifestyle, but most was lost in trading. This was in a period when the benchmark Standard & Poor's 500 index gained roughly 13%.

>He took in another $2.35 million in investments in December 2010 and January 2011, the SEC says, including $1.25 million from a single investor. By the end of January, half the money was gone, and by the end of February it was all gone and MSMB was in the red. This was during a period in which the S&P 500 index gained nearly 9%.

>But Shkreli's biggest blunder was an enormous short position in Orexigen Therapeutics, a La Jolla biopharma firm with an obesity drug. Shkreli shorted 32 million shares of Orexigen on Feb. 1, 2011, when it was trading about $2.50 per share.

>This was a massive bet that it would fall from there. But what was curious about this trade was that Orexigen shares had just taken a huge hit, falling from $9.09 the day before, when the Food and Drug Administration had issued a report questioning the obesity drug's cardiovascular safety. Shkreli, in other words, shorted at the low. Orexigen bounced back, gaining more than 50% from its lows over the next few days and ending the month up more than 30% from where Shkreli had shorted. Because short-trades lose money when the stock rises, Shkreli's trade was blown to smithereens.

Why do people still trust that living meme?