U.S. hedge funds frustrated by another rise in meme stocks

Melvin Capital and Light Street Capital, two US Hedge FundSeverely hit by the stock rebound that was welcomed by retail investors in January, it fell further in May due to another surge in memetic stocks.

Melvin Most notable casualties According to people familiar with the matter, the stocks that made the first rise in meme stocks in January fell another 4% in May.

People familiar with the matter said this brought the fund’s loss this year to about 44.7%. The S&P 500 index in the US stock market rose 0.6% last month and nearly 12% in the first five months of this year.

According to data from data company Ortex Analytics, since the beginning of May, hedge fund losses have totaled approximately US$6 billion just because of betting on five popular meme stocks-GameStop, Bed Bath & Beyond, AMC, BlackBerry and Clover Health. Peter Hillerberg, co-founder of Ortex, said the fund has recently reduced its short position in meme stock, but short interest is still “at a very high level.”

Headquartered in New York, Melvin is run by Steve Cohen’s protégé Gabe Plotkin and found himself at the center of the GameStop legend in January. As the stock price soared, Melvin’s performance plummeted by 53%.

Compared with the end of last year, the fund’s asset value fell by US$4.5 billion in January, but received US$2.75 billion investment Soon after, Point72 Asset Management from Cohen and Citadel from Ken Griffin.

According to people familiar with the company, as of June 1, Melvin’s assets have further increased to $11 billion.After the extent of the company’s loss was revealed, Melvin said it had Exit bet Confront GameStop and reduce its investment risk-although it still suffered further losses last month.

Stocks such as GameStop, AMC, and BlackBerry surged in late January as amateur investors coordinated their actions on forums such as Reddit, and in some cases directly targeted hedge funds, flooding in.

After falling back, these stocks have risen strongly again in recent weeks. The rebound hurt both short sellers who directly shorted stocks, and also hurt managers who held short positions in other stocks during subsequent market fluctuations or when other short sellers lifted their bets.

Other loss-making companies include Light Street Capital, founded by Glen Kacher, a so-called Tiger Cub who previously worked for Julian Robertson’s Tiger Management.

The company managed approximately $3.3 billion in assets at the beginning of this year, but it took a hit in the first quarter. According to data sent to investors, its flagship fund fell a further 3% in May and is now down 20.1% this year. A person familiar with its position said that the fund’s first quarter losses were mainly caused by short-selling losses.

Melvin and Wright Street declined to comment.

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