Melvin Capital, the hedge fund that incurred heavy losses during the GameStop (GME) short
squeeze, said it will unwind its funds and return money to investors as its losses continued to
mount during this year’s market downturn.
Melvin Capital was one of the biggest victims of the meme stock frenzy last year due to its large
short position in GameStop. Other hedge funds such as Citadel and Point72 had to infuse close
to $3 billion U.S. into Melvin Capital to shore up its finances in the wake of the GameStop short
squeeze.
Melvin Capital said it failed to recover those losses this year as market volatility compounded its
losses. The fund was down 21% at the end of the first quarter and the decline likely worsened in
recent months as the market rout has intensified in the face of rising interest rates.
The embattled hedge fund increased its stake in Amazon (AMZN) and Microsoft (MSFT)
significantly in the first quarter, according to a regulatory filing. But those moves appear to be
too little too late.
Melvin Capital said it will not be charging management fees as it winds down its operations and
returns capital to its investors.
Related Stories
