(Add details on fund and past performance)
BOSTON, April 9 (Reuters) – Melvin Capital, the hedge fund in the midst of the GameStop trade chase, lost 49% on its investments during the first three months of 2021, a person familiar with the matter said Friday.
The fund, founded by Gabe Plotkin, lost 7% in March, the source added, talking about anonymity.
A spokesman for Melvin Capital declined to comment.
Melvin has established himself as a strong artist who achieved annual returns of 30% between 2014 and 2020
But Plotkin bet that retailer GameStop’s share price would tumble and allowed retailers to use online trading programs and exchange information on Reddit’s WallStreetBets forum to push the share price significantly higher in the early weeks of January.
Melvin Capital ended January with a 53% loss on its investments in January, the person said.
GameStop’s share, which traded at less than $ 5 a year ago, closed at $ 158.36 on Friday. It briefly reached $ 400 a share in January.
Hedge fund managers Steven A. Cohen, who trained Plotkin, and Kenneth Griffin stepped in in January to help Plotkin with Griffin’s Citadel LLC and Cohen’s Point72 Asset Management, which added $ 2.75 billion in new funds to the firm.
(Reported by Svea Herbst-Bayliss in Boston; edited by Will Dunham)