GameStop Corp. GME short seller Melvin Capital Management LP ended the first half of 2021 with a loss of 46%, Bloomberg reported Thursday, citing people familiar with the matter.
What Happened: Founded in 2014 by Gabe Plotkin, a former portfolio manager for Steve Cohen, Melvin Capital was at the heart of the GameStop saga earlier this year.
The hedge fund, which managed $11 billion in assets as of June 1, is taking smaller-sized positions to limit exposure to single companies, as per the report.
Plotkin has reportedly instructed his team of data scientists to watch social media and message boards to look for shares that are seeing high support from retail investors.
Why It Matters: Melvin Capital’s first-half results indicate the hedge fund is struggling to rebound from the losses it incurred from betting against GameStop and other stonks - stocks popular with retail investors.
Melvin Capital said in May it has closed out of all its public bearish positions in the first quarter. This included its listed put options in GameStop.
It was reported in June that London-based White Square Capital is shutting down after suffering huge losses during the retail trading frenzy earlier in the year. This marked one of the first hedge fund closures following the surge in shares of stonks.
In early June, AMC Entertainment Holdings Inc. AMC and GameStop short-seller losses swelled up to $12 billion on a year-to-date basis. Both the stocks continue to see high interest from retail investors.
Price Action: AMC Entertainment shares closed almost 6.4% higher in Thursday’s regular trading session at $47.94, while GameStop shares closed almost 0.4% higher at $191.38.
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