Melvin Capital gives the Reddit crowd something to cheer about on a Friday.
The hedge fund, which illustrated Wall Street’s worst for a group of individual investors, reported a 49% loss in the first quarter on Friday, according to a Bloomberg News report.
Melvin Capital was at the center of a closely watched frack between professional investors and amateur traders who flocked to social media forums such as Reddit’s r / WallStreetBets.
The hedge fund, managed by Gabe Plotkin, a former hedge fund titan Steve Cohen investment manager, has suffered the most from losses due to a surge in strong “meme” stocks such as video game retailer GameStop GME,
and film chain AMC Entertainment Holdings AMC,
and it would seem that Melvin’s short cuts are not recovering, perhaps to the chagrin of Plotkin and the joy of the army of amateur investors determined to stick to the benefits together.
“51% goes over!” posted one user on r / WallStreetBets in response to Melvin’s reported losses.
A Melvin Capital spokeswoman declined to comment on the Bloomberg report to MarketWatch. However, a person familiar with Melvin’s performance confirms the extent of the quarterly loss.
Reports of worsening pain for Plotkin come after its fund fell 53% in January thanks to unprecedented short-term pressure from retailers, which saw the fund on social media such as Reddit and Discord and the free trading platforms as Robinhood is run. divides the values in GameStop and AMC.
Still, Plotkin was able to return 22% to investors in February, but Bloomberg reported that the fund delivered a 7% drop last month.
It has been seen that Melvin Capital occupies a large short position in GameStop which helped to catalyze the initial strategy of the retail staff. Some Redditors accuse investors of hedge funds such as Plotkin and Co. that they enjoy the benefits of financial markets that are uncomfortable according to some.
Melvin’s loss is seen by ‘others’ as ‘the ultimate loss porn’, with ‘loss porn’ representing the Reddit crowd’s way of describing harm joy.
Some users on Reddit speculated without evidence about the possibility that Melvin was still trapped in the GameStop short print. Recent reports, however, suggest that this is unlikely.
A fund spokesman said Plotkin covered his GameStop card on January 26, a day after the fund received a much-needed $ 3 billion infusion of Plotkin’s mentor, Steve Cohen, Point72 and his former boss, Ken Griffin, of Citadel.
Shares in GameStop closed 7% on Friday, discussing a loss of more than 17%. The share of the videogame retailer has risen 740% so far this year. For comparison, the Dow Jones Industrial Average DJIA,
has risen by more than 10% so far in 2021, the S&P 500 index SPX,
also won almost as much, and bitcoin prices BTCUSD,
is more than 100% higher over the same period.
The crew members seem to be happy with the glow of hedge fund investors’ anxiety, with the idea that investing in Melvin ‘is a great way to turn a million dollars into hundreds of thousands of dollars.’ ‘