By Svea Herbst-Bayliss
Boston (Reuters)-GameStop (NYSE :) Hedge fund at the heart of the drama, Melvin Capital, lost 53% in January, but is fresh from investors on the last day of the month, a source familiar with the fund. Said on Sunday when he received the cash commitment.
Melvin started the year with assets of about $ 12.5 billion and ended January with more than $ 8 billion, sources said.
Founded by Gabe Plotkin in 2014, the company was confident that its sick video game retailer GameStop, which traded for less than $ 5 five months ago, would go down. But a wave of retail investors using the online trading app Robinhood, comparing notes on social media platform Reddit, took the other side of Plotkin’s trading, raising its share price by 1,625% this month and trading at $ 325 on Friday. I finished.
The Wall Street Journal first reported the loss.
Hedge funds Point 72 Asset Management and Citadel were able to close their position with a significant loss after injecting $ 2.75 billion into Melvin Capital earlier this week.
“The liquidity of the fund’s portfolio is strong. Leverage use is at its lowest level since the establishment of Melvin Capital in 2014,” sources said.
Citadel lost less than 1% in the flagship fund’s Melvin position in January, a person familiar with the matter said on Sunday.
Recently, as news of losses has spread in many hedge funds, speculation has risen about which companies will be forced to close their doors. Some investors and fund managers have said clients are more patient with certain companies with a long and strong track record and can survive the serious losses this month.
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After investors add cash, Melvin Capital ends the month with over $ 8 billion in assets: Source By Reuters
https://www.investing.com/news/stock-market-news/melvin-capital-ends-month-with-over-8-billion-in-assets-after-investors-added-cash-source-2404462 After investors add cash, Melvin Capital ends the month with over $ 8 billion in assets: Source By Reuters