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Melvin Capital lost 53% in January, sources said to Insider. The Wall Street Journal reported the loss for the first time.
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The fund ended the month with more than $ 8 billion in assets under management.
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Melvin Capital was among the high-profile hedge funds that were set on fire after GameStop’s stock soared.
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Melvin Capital Management lost more than half of its assets after GameStop burned short selling funds this month.
The hedge fund, which was at the center of the GameStop frenzy, lost 53% in January, sources close to Insider said. The Wall Street Journal reported the loss for the first time.
Melvin Capital, founded by the famous portfolio manager Gabe Plotkin, it started the year with $ 12.5 billion in assets and ended the month with more than $ 8 billion in assets under management, after current investors committed additional capital, the source said. Billionaire investors Steve Cohen and Ken Griffin invested $ 2.75 billion in the hedge fund earlier this week.
Read More: How hedge funds are tracking Reddit posts to protect their portfolios after the Wall Street Bets crowd helped reduce Melvin Capital’s short positions
Melvin Capital, along with high-level hedge funds Citron Research and Point72, were burned after GameStop’s stock soared this month, powered by Redditors using the trading app Robinhood.
Individual retail investors, including members of the popular Reddit r / WallStreetBets forum, attempted to burn GameStop short sellers by buying shares and sending shares up 2,000% in the month to date. Short sellers lost about $ 19 billion on GameStop this year, according to data from data provider Ortex.
Read More: D1 Capital, a phenomenon of hedge funds, Dan Sundheim was hit by AMC’s short bet caught in Reddit’s commercial frenzy
Melvin closed his short position on GameStop shares on January 27.
New and existing customers signed up to invest additional funds in Melvin Capital on February 1, the Journal reported, but the company did not disclose how much.
Citron Research also closed its short position on GameStop after covering a 100% loss. Citron Research managing partner Andrew Left, a target for passionate Wall Street Bets investors, announced that the company would stop publishing “short reports”.
The frenzy over GameStop’s actions has turned into a “populist movement,” said Ben Winck, of Insider, and received responses from progressive lawmakers who called for stricter market regulation.
– Alex Morrell from insider contributed to this report
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