Hedge Funds

Why the long Facebook? Hedge funds suffer from price plunge

Observers ask why fund managers known for contrarian bets were backing the widely-owned US social network

Unlike: hedge funds nurse losses after Facebook's drop
Unlike: hedge funds nurse losses after Facebook's drop Photo: Jaap Arriens/NurPhoto/Getty Images

Investors may not have ‘liked’ Facebook’s recent share price plunge — the largest one day fall in US market history — but it marked a significant setback for the reputations of the hedge fund managers who bet on it, according to industry commentators.

The precipitous 19% share plunge in the social network’s share price on July 26, caused by a downbeat earnings report, took $119bn off its market cap.

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