BOSTON, - Melvin Capital, the hedge fund at the center of the GameStop trading frenzy, lost 49% on its investments during the first three months of 2021, a person familiar with the matter said on Friday.
The fund, founded by Gabe Plotkin, lost 7% in March, the source added, speaking on condition of anonymity.
A Melvin Capital spokesman declined to comment.
Melvin had established itself as a strong performer posting annualized returns of 30% between 2014 and 2020
But Plotkin had bet the retailer GameStop's stock price would tumble and then faced off with retail traders who used online trading apps and exchanged information on Reddit's WallStreetBets forum to push the stock price significantly higher in the early weeks of January.
Melvin Capital ended January with a 53% loss on its investments in January, the person said.
GameStop's stock, which traded at less than $5 a year ago closed at $158.36 on Friday. It had briefly topped $400 a share in January.
Hedge fund managers Steven A. Cohen, who had trained Plotkin, and Kenneth Griffin stepped in to aid Plotkin in January with Griffin's Citadel LLC and Cohen's Point72 Asset Management adding $2.75 billion in new funds to the firm.
GameStop's strong stock performance triggered a board director's exit