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Gabe Plotkin’s Melvin Capital Management LP saw gains of more than 20% in February after being brutalized by a retail investor-led short squeeze a month earlier, CNBC reported Wednesday.
What Happened: Melvin fell as much as 53% in January in a short squeeze fueled by users of Reddit forum r/WallStreetBets, which sent the shares of GameStop Corp (NYSE:GME), AMC Entertainment Holdings Inc (NYSE:AMC), BlackBerry Ltd (NYSE:BB), and others soaring.
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The fund returned 27.1% in February recouping some of the earlier losses, according to CNBC.
Why It Matters: Hedge funds Citadel and Point72 infused $2.75 billion in Melvin in late January. The investment was in Melvin’s fund and non-controlling revenue shares, as per the Wall Street Journal.
Melvin subsequently covered its short position in GameStop in January after confirming it had taken a huge hit as did Citron Research.
See Also: Citron Research No Longer Publishing Short Reports, Switches Focus To Multibaggers
In a statement ahead of the House hearing called to look into the GameStop saga, Plotkin denied that Melvin was bailed out by Citadel.
“To be sure, Melvin was managing through a difficult time, but we always had margin excess and we were not seeking a cash infusion,” wrote Plotkin.
Price Action: GameStop shares closed nearly 5.08% at $124.18 on Wednesday and gained 0.66% in the after-hours session.
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Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.