Melvin Capital, the hedge fund that was wrongfooted by retail traders who drove up shares in GameStop and other companies it had bet against, lost 53 percent in January, according to people familiar with the firm’s results.
The New York-based hedge fund sustained a $4.5 billion fall in its assets from the end of last year to $8 billion, even after a $2.75 billion cash injection from Steve Cohen’s Point72 Asset Management and Ken Griffin’s Citadel.
Authors: ORTENCA ALIAJ AND ERIC PLATT
Publication Date: 31 January 2021
Publication Site: Ars Technica
Less than a decade after the Bernie Madoff scam roped in the Wilpons and supposedly handcuffed the New York Mets payroll as a result, the team’s fans are panicking that new financial market weirdness in the form of bizarre trading in video-game retailer GameStop is going to harm new owner Steve Cohen’s ability to make the Mets amazin’ again.
Melvin Capital? It has lost perhaps 30% in January alone, as a series of short bets including GameStop turned bad, according to a report by the Financial Times.
In comes Steve Cohen. Melvin Capital founder Gabe Plotkin used to work for Cohen and already had $1 billion of Cohen’s money in his fund. To help Melvin weather its awful month, Cohen and another hedge fund billionaire invested another $2.75 billion into Melvin this month.
That in turn is why Mets fans are now freaking out. One Reddit poster claimed yesterday Cohen’s fresh capital must be gone, burned in Melvin’s desperate need to cover the short bet on GameStop. Suddenly, visions of a super wealthy new owner who could finally spend money on the team were replaced with another Wall Street catastrophe. Mets fans worried while GameStop pumpers teased Cohen.
Author: Brendan Coffey
Publication Date: 27 January 2021
Publication Site: Sportico