- Melvin Capital misplaced 53% in January, sources informed Insider. The Wall Avenue Journal first reported the loss.
- The fund ended the month with greater than $8 billion in belongings beneath administration.
- Melvin Capital was among the many high-profile hedge funds that received torched after GameStop shares skyrocketed.
- Go to Enterprise Insider’s homepage for extra tales.
Melvin Capital Administration misplaced over half its belongings after GameStop burned short-selling funds this month.
The hedge fund, which was on the coronary heart of the GameStop frenzy, misplaced 53% in January, sources near the fund informed Insider. The Wall Avenue Journal first reported the loss.
Melvin Capital, based by star portfolio supervisor Gabe Plotkin, began the 12 months with $12.5 billion in belongings and ended the month with greater than $8 billion in belongings beneath administration after present buyers dedicated extra capital, the supply stated. Billionaire buyers Steve Cohen and Ken Griffin invested $2.75 billion into the hedge fund earlier this week.
Learn extra: How hedge funds are monitoring Reddit posts to guard their portfolios after the Wall Avenue Bets crowd helped tank Melvin Capital’s brief positions
Melvin Capital, together with high-profile hedge funds Citron Analysis and Point72, received torched after GameStop shares skyrocketed this month, fueled by Redditors utilizing buying and selling app Robinhood.
Particular person retail buyers, together with members of the favored Reddit discussion board r/WallStreetBets, tried to burn short-sellers of GameStop by shopping for up shares and sending the inventory surging as a lot as 2,000% month-to-date. Brief-sellers misplaced about $19 billion on GameStop this 12 months, based on figures from information supplier Ortex.
Learn extra: Hedge fund phenom Dan Sundheim’s D1 Capital has been stung by the AMC brief guess caught up in Reddit’s buying and selling frenzy
Melvin closed its brief place on GameStop inventory on January 27.
New and present shoppers signed as much as make investments extra funds into Melvin Capital on February 1, the Journal reported, however the agency wouldn’t disclose how a lot.
Citron Analysis additionally closed its brief place on GameStop after protecting a 100% loss. Citron Analysis managing associate Andrew Left, a goal for impassioned buyers on Wall Avenue Bets, introduced the agency would cease publishing “brief studies.”
The frenzy surrounding GameStop shares changed into a “populist motion,” Insider’s Ben Winck reported, and garnered responses from progressive lawmakers calling for tighter market regulation.
–Insider’s Alex Morrell contributed to this report