- Melvin Capital lost 53% in January, sources told Insider. The Wall Street Journal was the first to report the loss.
- The fund ended the month with more than $ 8 billion in assets under management.
- Melvin Capital was one of the high-profile hedge funds set on fire after GameStop stocks skyrocketed.
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Melvin Capital Management lost more than half of its assets after GameStop burned down short selling funds this month.
The hedge fund, which was at the heart of the GameStop frenzy, lost 53% in January, sources close to fund Insider told. The Wall Street Journal was the first to report the loss.
Melvin Capital, founded by star portfolio manager Gabe Plotkin, 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 pledged 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 Follow Reddit Posts To Protect Their Portfolios After Wall Street Bets Crowd Helped Soften Melvin Capital’s Short Positions
Melvin Capital, along with high-profile hedge funds Citron Research and Point72, was fired after GameStop stocks skyrocketed this month fueled by Redditors using the trading app Robinhood.
Individual retail investors, including members of the popular Reddit forum r / WallStreetBets, tried to burn off GameStop short-sellers by buying up shares and pushing the stock up a whopping 2,000% so far. Short sellers lost about $ 19 billion on GameStop this year, according to data provider Ortex.
Read more: Hedge fund phenomenon Dan Sundheim’s D1 Capital is stung by the AMC short bet that has become entangled in Reddit’s trading frenzy
Melvin closed his short GameStop stock on January 27.
New and existing clients signed up to invest additional money in Melvin Capital on Feb. 1, the Journal reported, but the company declined to disclose how much.
Citron Research also closed its short position on GameStop after covering a loss of 100%. Citron Research managing partner Andrew Left, a target for passionate investors on Wall Street Bets, announced that the company would stop publishing “short reports.”
The frenzy surrounding GameStop stocks turned into a “ populist movement, ” Insider’s Ben Winck reported, and received backlash from progressive lawmakers calling for tighter market regulation.
– Insider’s Alex Morrell contributed to this report