GameStop

Short Bets Pummel Hot Hedge Fund Melvin Capital

Melvin Capital Management is down 15% just three weeks into 2021, thanks to a series of wrong-way bets that stocks including GameStop Corp. would slump.

Founded by 42-year-old Gabe Plotkin, a former star portfolio manager for hedge-fund titan Steven A. Cohen, Melvin bets on and against stocks and managed about $12.5 billion at the start of the year. Its short book, or array of bets against companies, has driven losses so far this year, said people familiar with the matter. Melvin’s losses were broad-based and not driven by losses on GameStop or any other specific stock, some of them said.

Citadel LLC and Point72 Asset Management are investing $2.75 billion into hedge fund Melvin Capital Management

Citadel LLC and Point72 Asset Management are investing $2.75 billion into hedge fund Melvin Capital Management, which has been hard hit by a series of short bets to start the year.  The influx of cash is expected to help stabilize Melvin, which in 2021 has lost 30% through Friday, said people familiar with the firm. Melvin started the year with $12.5 billion and had been one of the best performing hedge funds on Wall Street in recent years. The losses stem from Melvin’s array of short bets against companies and have stunned clients and other traders. Among other short positions, Melvin bet against the surging stock of videogame retailer GameStop Corp.