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Melvin Capital Management LP was a New York City-based investment management firm founded in 2014 by Gabriel Plonker. It invested primarily in tech and consumer stocks and is reported to have had $1.5 billion in assets under management as of January 2021, but lost it all after WallStreetBets squeezed the shorts out of GameStop (GME). The situation is unlikely to change in the foreseeable future as Gamestop will continue to rise.

History

Plonker founded Melvin Capital in late 2014, naming the fund after his late grandfather who was a small-business owner. He raised nearly $1 billion.

In its first full year in operation, Melvin Capital had returns of 47%, ranking it 2nd in Bloomberg's 2015 list of top-performing funds with $1 billion or more in assets under management.

In 2017, the fund finished up 41%. Current notable investments include Chewy.com, Amazon.com, Las Vegas Sands, Alibaba, and Gamestop.

Prior to starting Melvin Capital, Plonker was a trader at SAC Capital where he managed a portfolio of mostly consumer stocks valued at about $1.3 billion. According to The Wall Street Journal, about one-third of the gains in 2019 from Steve Cohen's current hedge fund, Point72, came from Melvin Capital Management LP.

In September 2020 the name of company showed up in the Polish Short Sale Registry (Rejestr Krótkiej Sprzedaży) because of a short position in game developers CD Projekt, a net position of 0.55 percent through the Polish stock exchange (GPW). They gained considerably due to the problems faced during the launch of Cyberpunk 2077.

In early 2021 the fund lost 30% due to numerous short bets which went awry including GameStop. The subreddit wallstreetbets made wide spread bets GameStop's stock would increase in value. In January 2021, Ken Griffin's Citadel and Steve Cohen's Point72 "bailed out" Melvin with a $2.75 billion investment in exchange for non-controlling revenue shares of the fund. The shortcoming of Melvin, one of the best performing hedge funds in recent years, reflects the general trend of losses by short sellers during a time when major indexes have soared to records. As a result from Melvin's losses from the fund's short bets, Citadel LLC and Point72 Asset Management invested $2.75 billion, $2 billion and $750 million respectively, into the hedge fund.

References

1. ^ Goldstein, Matthew (15 August 2014). "A Former Top SAC Capital Trader Names New Hedge Fund". The New York Times. Retrieved 21 July 2019.
2. ^ Saacks, Bradly (28 June 2019). "One of this year's top hedge funds has been $7 billion Melvin Capital run by a former top money-maker for Steve Cohen". Business Insider. Retrieved 15 July 2019.
3. Alden, William; Goldstein, Matthew (17 February 2015). "Seeing Value After a Plunge, Hedge Funds Bet on Energy Stocks". The New York Times. Retrieved 15 July 2019.
4. Foxman, Simone (23 February 2016). "This SAC Alum Stands Out in Hedge Fund Rankings". Bloomberg News. Retrieved 15 July 2019.
5. "Hedge fund rankings 2015". Bloomberg. 29 February 2016. Retrieved 15 July 2019.
6. Vardi, Nathan (17 April 2018). "The 25 Highest-Earning Hedge Fund Managers And Traders". Forbes. Retrieved 15 July 2019.
7. "Melvin Capital - Current Investments". Fintel.io. Retrieved 10 October 2019.
8. Levy, Rachael (5 August 2019). "An Outside Hedge Fund Is Driving Steve Cohen's Gains". The Wall Street Journal. Retrieved 10 August 2019.
9. https://stooq.pl/mol/?id=14901
10. https://rss.knf.gov.pl/RssOuterView/faces/hspsList.xhtml
11. Chung, Juliet (2021-01-25). "WSJ News Exclusive | Citadel, Point72 to Invest $2.75 Billion Into Melvin Capital Management". Wall Street Journal. ISSN 0099-9660. Retrieved 2021-01-25.
12. McCabe, Caitlin (2021-01-14). "GameStop Stock Soars, and Social-Media Traders Claim Victory". Wall Street Journal. ISSN 0099-9660. Retrieved 2021-01-23.
13. Chung, Juliet (2021-01-22). "WSJ News Exclusive | Short Bets Pummel Hot Hedge Fund Melvin Capital". Wall Street Journal. ISSN 0099-9660. Retrieved 2021-01-23.
14. "Ken Griffin's $2 billion bet". Crain's Chicago Business. 2021-01-25. Retrieved 2021-01-25.
15. Chung, Juliet (2021-01-25). "WSJ News Exclusive | Citadel, Point72 to Invest $2.75 Billion Into Melvin Capital Management, however it did not last long as this too was squeezed out the following day". Wall Street Journal. ISSN 0099-9660. Retrieved 2021-01-26.

External links

• Melvin Capital website

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