Melvin Capital shutters down after trying to kill Gamestop

Melvin Capital, once one of Wall Street’s most successful hedge funds which then lost billions in the meme stock saga, will shut down after it was hit again by this year’s market slump.

Gabe Plotkin, widely regarded as one of the industry’s best traders after posting years of double digit returns, told investors that the last 17 months have been “an incredibly trying time.”
Plotkin had been trying to turn around the firm after being caught out in early 2021 betting against retail favorite GameStop (GME) and after being wrong footed again by tumbling markets this year.
“The appropriate next step is to wind down the Funds by fully liquidating the Funds’ assets and accounts and returning cash to all investors,” Plotkin wrote in a letter reviewed by Reuters on Wednesday.
Melvin Capital had $7.8 billion in assets at the end of April. The fund lost 23% in the first four months of 2022, a person familiar with the fund’s finances said.
This year’s losses come on the heels of steep losses in 2021 when Melvin Capital ended the year down 39%. The firm bet that shares of GameStop would tumble but was battered when retail investors took the other side and sent the stock surging.
The firm had $12.5 billion in assets at the start of 2021.

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