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Some of the hedge funds hardest hit by the January populist squeeze have already begun to recover from the pain inflicted by retail traders seeking to topple Wall Street, the Post found.
| Ticker | Safety | Last | Change | Change % |
|---|---|---|---|---|
| GME | GAMESTOP | 194.50 | +56.76 | + 41.21% |
| AMC | AMC ENTERTAINMENT HOLDINGS INC | 9.29 | +1.24 | + 15.40% |
At least three funds affected by manic movements in stocks like GameStop and AMC Entertainment earlier in the year recovered somewhat in February, including the main target of the “Reddit rally” movement, Melvin Capital.
Gabe Plotkin commander Melvin, who had a bad reputation for a $ 2.75 billion lifesaver he received in the middle of the short squeeze, gained 22 percent last month, as previously reported by Bloomberg News.
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Viking Global Investors and Daniel Sundheim D1 Capital Partners of Andreas Halvorsen also started the recovery process, the sources said. Viking grew 5 percent last month, while D1 rose 15 percent, the sources said.
Funds are still down for the year, however, after huge losses from January’s unprecedented move by retail traders using Reddit boards and free trading apps to target short selling hedge funds by buying “stocks of meme “.
Steve Huffman, CEO and co-founder of Reddit Inc., speaks during the Sooner Than You Think ‘conference in Brooklyn, NY. Photographer: Alex Flynn / Bloomberg via Getty Images
Melvin, as Bloomberg reported, has yet to produce a 75 percent gain to break even after his 53 percent loss in January.
But Viking and D1 are closer to going green, with Viking closing February with just 2.3 percent drop, after a 7 percent drop in January, the sources said.
The D1, in turn, fell about 5 percent last month, after losing 20 percent in the grueling squeeze, according to a source with knowledge of the returns.
The reason for the recovery is unclear, except that the January squeeze on meme stocks was so sudden and huge that it swept funds in short positions like a tsunami, drowning otherwise healthy portfolios. By covering its short sales while Robinhood restricted trading on GameStop and other meme stocks, the funds were able to skyrocket in a month, when the S&P 500 rose more than 4%.
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“This has increased rapidly,” said a macro hedge fund manager. “January scared these guys, but it looks like they should all be flat or finished by April.”
“They came after the” suits “and threw some punches,” pondered the merchant. “But I don’t see many bruises.”
Mets owner Steve Cohen saw his Point72 fund, however, return a meager 1% in February, after falling 9% in January, the sources said. The January short-squeeze may also have rekindled an old feud between Viking and D1, which was formed in 2017 when Sundheim left his post as chief investment officer at Viking. The exit forced the Greenwich megafund to return $ 8 billion to shareholders just months before its former star trader launched D1 as one of the biggest hedge fund launches of all time.
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“There were definitely some smiles in Greenwich when Sundheim fell further,” said another hedge fund manager. “Sundheim always makes bigger swings than Halvorsen, this is no secret.”