Massive losses for Melvin Capital - Wall Street hit by Gamestop Stock

Massive losses for Melvin Capital - Wall Street hit by Gamestop Stock

Hedge fund Melvin Capital lost 53% in January, as wall street feels the hurt from Gamestop stock gamble, according to media reports.

The latest surge in silver comes as the damage to one Wall Street firm becomes clearer.

However, the firm received commitments for fresh cash from investors in the last days of January and ended the month with $8bn (£5.8bn) in assets after having started the year with roughly $12.5bn, according to Reuters.

The firm had bet that ailing video game retailer GameStop’s stock, which traded at less than $5 five months ago, would fall further.

But retail investors, comparing notes on social media platform Reddit, bought the stock and sent it higher to close at $325 on Friday.

Melvin Capital Management LP is an American investment management firm founded in 2014 by Gabriel Plotkin and based in New York City. It invests primarily in the tech and consumer stocks and is reported to have $8 billion in assets under management as of January 2021.

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