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So long, Melvin Capital
Posted on 5/18/22 at 8:28 pm
Posted on 5/18/22 at 8:28 pm
How the once might do fall (hard!):
Melvin Capital to shut after heavy losses on meme stocks, market slump
Melvin Capital had $7.8 billion in assets at the end of April. The fund lost 23% in the first four months of 2022, a person familiar with the fund’s finances said.
This year’s losses come on the heels of steep losses in 2021 when Melvin Capital ended the year down 39%. The firm bet that shares of GameStop would tumble but was battered when retail investors took the other side and sent the stock surging.
The firm had $12.5 billion in assets at the start of 2021.
Melvin Capital to shut after heavy losses on meme stocks, market slump
Melvin Capital had $7.8 billion in assets at the end of April. The fund lost 23% in the first four months of 2022, a person familiar with the fund’s finances said.
This year’s losses come on the heels of steep losses in 2021 when Melvin Capital ended the year down 39%. The firm bet that shares of GameStop would tumble but was battered when retail investors took the other side and sent the stock surging.
The firm had $12.5 billion in assets at the start of 2021.
Posted on 5/18/22 at 8:31 pm to Jag_Warrior
Is Cathy Woods next?
Posted on 5/18/22 at 8:37 pm to Jag_Warrior
Holy shite the retail investors won.
I wish they’d find a way to do this to blackrock and vanguard
I wish they’d find a way to do this to blackrock and vanguard
Posted on 5/18/22 at 9:01 pm to deltaland
quote:
vanguard
No. That’s no hedge fund sir, only people that would get hurt would be the investors themselves
Posted on 5/18/22 at 9:06 pm to Jag_Warrior
This came out a few weeks ago - they are reclassifying or whatever term they use. In short - in the hedge fund world, they don't make money until they are above the "even" line. Given the fact that Melvin is down so much, they would have to gain something like 66% in their funds in order to just begin making money from their customers again. That goes for the portfolio managers as well. What Melvin is doing is saying "sorry we are closing shop, resetting everything back at even, and starting over - you can stay with us if you want Mr Customer". So while they will likely lose customers by doing this, they essentially reset the game and can start making money from day 1 again.
Posted on 5/18/22 at 9:38 pm to TigerTatorTots
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