Hedge Funds Face Billions in Losses as PDD Holdings Shares Crash After Bearish Outlook

Hedge funds, heavily invested in PDD Holdings, may have experienced significant losses due to a sharp decline in the company`s share price following disappointing earnings results and a pessimistic outlook. Data suggests these losses could amount to billions of dollars. PDD, despite being a favored investment for its growth potential, announced weaker than expected revenue and signaled challenges ahead. This news, combined with the company`s decision to forgo dividends or share buybacks, led to a sell-off that has further dampened investor sentiment towards Chinese equities. The situation highlights the risks associated with concentrated bets and the impact of negative news on even the seemingly strong performers in a challenging market.