Melvin and Light Street suffer as meme stocks rise again

Melvin Capital and Light Street Capital, Two United States Hedge fundIt was hit hard in January by a rebound in stocks popular with retail investors, but suffered further losses in May as meme stocks surged again.

Melvin, Most notable victims Of the first meme stock rise in January, it fell another 4% in May, according to people familiar with the numbers.

People said it would cost the fund a loss of about 44.7 percent this year. The S & P 500 Index for US equities rose 0.6% last month, up nearly 12% in the first five months of the year.

According to data firm Ortex Analytics, just betting on five popular mee stocks (GameStop, Bed Bath & Beyond, AMC, BlackBerry and Clover Health) will bring hedge fund losses totaling about $ 6 billion from the beginning of May. .. Ortex co-founder Peter Hillerberg said the fund has recently reduced its short-selling position on meme shares, but the short-selling remains at a “very high level.”

New York-based Melvin, run by Steve Cohen’s protégé Gabe Plotkin, found himself at the heart of the GameStop story in January. Melvin’s performance plummeted 53% as stock prices rose in the stratosphere.

The fund, whose asset value fell by $ 4.5 billion from the end of last year in January, $ 2.75 billion investment Shortly thereafter, from Cohen’s Point 72 Asset Management and Kengrifin’s Citadel.

According to people familiar with the company, Melvin’s assets have increased to an additional $ 11 billion as of June 1.After the extent of the company’s loss was revealed, Melvin said it had I finished that bet We opposed GameStop and reduced the risk of investing, but suffered more losses last month.

Stocks such as GameStop, AMC and BlackBerry soared in late January as amateur investors coordinated their behavior on forums such as Reddit and in some cases directly targeted hedge funds.

After retreating, these stocks have risen strongly again in recent weeks. The rally hurt both shortsellers betting directly on stocks and managers who were hit by subsequent market volatility or who have short positions on other stocks when other shortsellers open their bets. I did.

Others who have lost money include Light Street Capital, founded by the so-called Tiger Cub Glenn Kacher, who previously worked for Julian Robertson’s Tiger Management.

The company, which managed about $ 3.3 billion in assets earlier this year, was hit in the first quarter. Its flagship fund lost another 3% in May and fell 20.1% this year, according to figures sent to investors. Those familiar with its positioning say that the fund’s first-quarter losses were primarily due to short-term losses.

Melvin and Light Street declined to comment.

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Melvin and Light Street suffer as meme stocks rise again

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