Melvin Lost 53% in January, Hurt by GameStop, Other Bets

The hedge fund Melvin Capital, which has been at the heart of the GameStop frenzy, lost about 53% in January, The Wall Street Journal has reported. 

What Happened: Founded in 2014 by Gabe Plotkin, a former portfolio manager for Steve Cohen, Melvin ended January with more than $8 billion in assets, after starting the year with roughly $12.5 billion, according to WSJ.

The $8 billion includes $2.75 billion in funds that Citadel LLC and Cohen’s Point72 Asset Management put into the hedge fund last Monday as Melvin faced losses throughout its portfolio, including steep ones from those against GameStop Corp. GME

According to the Wall Street Journal, Citadel, its partners and Point72 have lost money on the Melvin deal so far. However, the report says some new and existing clients have shown interest in investing money in Melvin by February 1. 

Why It Matters: The hedge funds have been at the center of the extreme short-squeeze plays that have transpired over the past few weeks, in a drama portrayed as everyday retail traders taking the fight to Wall Street hedge funds. GameStop has been the chief stock among them, though by no means not the only one.

At times the saga has taken nasty turns. Cohen announced yesterday that he took his Twitter page down earlier in the week because of threats against his family.

Photo courtesy of Pixabay.

Posted In: Citadel LLCCitron ResearchGabe PlotkinMelvin CapitalPoint72Steve CohenNewsShort SellersHedge FundsGeneral