US hedge funds Melvin Capital and Light Street suffer further losses

Melvin Capital and Light Street Capital, two hedge funds in the United States It was hit hard in January by a rebound in stocks popular with retail investors, but suffered more losses in May.

Melvin most notable victims Of the equity rally even in January, it fell another 4% last month, people say they know their performance.

People said it would cost the fund a loss of about 44.7% this year. The S&P 500 Index for US stocks rose 0.6% last month, up nearly 12% in the first five months of the year.

According to data firm Ortex Analytics, hedge fund losses resulting from bets on five popular Meam stocks (GameStop, Bed Bath & Beyond, AMC, BlackBerry and Clover Health) have totaled around $ 6 billion since early May. Ortex co-founder Peter Hillerberg said the fund had recently reduced its short selling position in meme stocks, but short selling remains at a “very high level.”

New York-based Melvin, led by Steve Cohen’s protégé Gabe Plotkin, found himself at the heart of GameStop’s story in January. Melvin’s performance fell 53% as stock prices rose in the stratosphere.

The fund, whose asset values ​​fell $ 4.5 billion from the end of last year in January, invested $ 2.75 billion soon after, from Cohen’s Point 72 Asset Management and by Kengrifin’s Citadel.

According to people close to the company, Melvin’s assets increased to an additional $ 11 billion as of June 1. After the extent of the company’s loss was revealed, Melvin said I had completed this bet. , but suffered more losses last month.

Stocks like GameStop, AMC and BlackBerry soared in late January as amateur investors coordinated their behavior on forums like Reddit and, in some cases, directly targeted hedge funds.

After declining, these values ​​have again risen sharply in recent weeks. The rally hurt both short sellers betting directly on stocks and managers who were affected by subsequent market volatility or who have short positions in other stocks when other short sellers open their bets. . I did.

Others who lost money included Light Street Capital, the so-called Light Street Capital, founded by Glen Kacher. Tiger child Previously worked for Julian Robertson’s Tiger Management.

The company, which managed around $ 3.3 billion in assets earlier this year, was hit in the first quarter. Its flagship fund lost another 3% in May and fell 20.1% this year, according to figures sent to investors. Those familiar with its positioning say the fund’s losses in the first quarter were mainly due to short-term losses.

Melvin and Light Street declined to comment.

The captions for this article have been revised to clarify that the $ 6 billion figure refers to losses across the hedge fund industry.

No coverage – Markets, finance, strong opinions

Robert Armstrong analyzes the most important market trends and explains how the best of Wall Street responds to them. subscribe here Send the newsletter directly to your inbox on weekdays

US hedge funds Melvin Capital and Light Street take further losses Source link US hedge funds Melvin Capital and Light Street take further losses

Source link

About Norman Brown

Check Also

Focal Points Tencent, AIA, HSBC, Meituan, Alibaba Mkt AASTOCKS Financial News

You expressly agree that use of this application / website is at your own risk. …

Leave a Reply

Your email address will not be published. Required fields are marked *