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Melvin Capital and Light Street Capital, two Americans hedge fundStrong blows from the concentration of popular stocks among retail investors in January have suffered further losses in May as meme stocks have risen again.
Melvin, the lower profile lower of the first concentration of memes in January, it lost another 4% in May, according to people familiar with the figures.
This brings the fund’s losses to 44.7% this year, according to people. The S&P 500 index of US equities rose 0.6% last month and rose nearly 12% in the first five months of the year.
Loss of hedge funds just to bet on five popular meme stocks: GameStop, Bed Bath & Beyond, AMC, BlackBerry and Clover Health, has 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 interest rates remained “at very high levels”.
New York-based Melvin, led by Steve Cohen’s protégé Gabe Plotkin, was at the center of the GameStop saga in January. Melvin’s return fell 53% amid a stratospheric rise in stock prices.
The fund, which in January suffered a $ 4.5 billion drop in the value of its assets since late last year, received a $ 2.75 million investment shortly after Cohen’s Point72 Asset Management and Ken Griffin’s Citadel.
Melvin’s assets have risen since June 1 to $ 11 billion, according to a person familiar with the company. After revealing the scope of the company’s losses, Melvin said yes came out of his bet against GameStop and the reduction in risk in their investments, although it suffered even more losses last month.
Shares such as GameStop, AMC and BlackBerry soared in late January, as amateur investors coordinated their shares on forums such as Reddit and in some cases targeted hedge funds directly.
After a setback, these stocks have risen sharply in recent weeks. Mergers have hurt both short sellers who bet directly against stocks, and executives with short positions in other stocks that have been affected by market volatility or other short sellers undoing their bets.
Others who have lost money are Light Street Capital, created by Glen Kacher, the so-called Tiger Cub who previously worked on Julian Robertson’s Tiger Management.
The company, which managed about $ 3.3 billion in assets earlier this year, was affected during the first quarter. Its flagship fund lost 3% more in May and now falls 20.1% this year, according to figures sent to investors. One person familiar with his position said fund losses during the first quarter were primarily driven by short-circuit losses.
Melvin and Light Street declined to comment.
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