FAST FIVE: Melvin Capital Among Hedge Funds Losing $6 Billion On Latest Meme Squeeze
Melvin Capital Among Hedge Funds Losing $6 Billion On Latest Meme Squeeze “Fool me once, shame on.
you can't get fooled again,” were the infamous words of former President Bush and we suspect that Steve Cohen protégé Gabe Plotkin is reflecting on those stoic words as he looks back at his fund's performance in May.
As The FT reports, hedge fund losses just from betting against five popular meme stocks – GameStop, Bed Bath & Beyond, AMC, BlackBerry and Clover Health – total about $6bn since the start of May, according to the data firm Ortex Analytics.
It appears the bailout of Melvin Capital (which after sustaining a $4.5bn loss in January got $2.75bn in new cash from Cohen's Point72 Asset Management and Ken Griffin's Citadel) was used to maintain his big shorts.
Perhaps more notably, Peter Hillerberg, Ortex's co-founder, said funds had recently reduced their short positions in meme stocks but that short interest remained “at very high levels”.