Melvin Capital and Light Street Capital, two United States hedge fundThe hard blow from a rally in popular stocks with retail investors in January, suffered further losses in May as meme stocks shot up again.
Melvin, u victim of the highest profile of the first January meme stock rally, it lost another 4 percent in May, people said they were familiar with the numbers.
That brings the fund’s losses this year to about 44.7 percent, people said. The S&P 500 index of U.S. stocks rose 0.6 percent last month and grew nearly 12 percent in the first five months of the year.
Hedge funding losses alone from betting against five popular meme companies – GameStop, Bed Bath & Beyond, AMC, BlackBerry and Clover Health – totaled about $ 6 billion since early May, according to data firm Ortex Analytics. Peter Hillerberg, co-founder of Ortex, said the funds had recently reduced their short positions in meme stocks, but that short-term interest remained “at very high levels”.
New York-based Melvin, managed by Steve Cohen’s protégé Gabe Plotkin, found himself at the center of the GameStop saga in January. Melvin’s performance fell 53 percent amid a stratospheric rise in the share price.
The fund, which in January sustained a $ 4.5 billion drop in the value of its assets since the end of last year, has received a Investment of $ 2.75 billion shortly after by Cohen’s Point72 Asset Management and Ken Griffin’s Citadel.
Melvin’s assets have increased by more than $ 11 billion as of June 1, according to a person familiar with the business. After the extent of the company’s losses were revealed, Melvin said get out of his bet against GameStop and reduced risk in its investments – although it still suffered further losses last month.
Shares such as GameStop, AMC and BlackBerry were fired in late January, as amateur investors coordinating their shares on forums such as Reddit, and in some cases directly targeting hedge funds.
After falling behind, these values have risen sharply again in recent weeks. The protests have hurt both short sellers who bet directly against the shares, as well as executives with short positions in other stocks who have been hit by subsequent market volatility or how other short sellers raise their stakes.
Others who have lost money include Light Street Capital, set up by Glen Kacher, a Tiger Cub cousin who previously worked in Julian Robertson’s Tiger Management.
The company, which managed about $ 3.3 billion in assets earlier this year, was hit during the first quarter. Its teaching fund lost an additional 3 percent in May and is now down 20.1 percent this year, according to numbers sent to investors. Fund losses in the first quarter were primarily driven by short-term losses, said one person familiar with their positioning.
Melvin and Light Street declined to comment.
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