The 'villain' in Reddit's GameStop investor saga is shutting down
report Melvin Capital, the hedge fund considered the nemesis of the meme stock affair, is shutting down. Fund owner Gabe Plotkin told investors that the"appropriate next step" after steep losses was to liquidate assets and return cash to investors, and that it was time to"step away" from managing others' capital. At least half of the cash will transfer by May 31st, with the rest coming by June 30th.
Melvin Capital had been a successful fund, starting 2021 with over $12 billion. However, its public bet against GameStop and other struggling companies made it one of the largest victims of a GameStop-centricby people coordinating across Reddit and social networks. Plotkin's fund reported a 53 percent loss in January 2021, and it took a $2.75 billion cash infusion to soften the blow and keep losses down to 39 percent for the year.
The GameStop saga wasn't the only factor involved, however. While a recovery appeared possible, Melvin posted a 23 percent loss through April that was partly linked to poor stock positions. The fund was clearly in peril after the Reddit battle — it's just that some miscalculations finished the company once and for all.and other companies in the aftermath of the GameStop drama, and there hasn't been fallout on par with Melvin's in the months since.
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