“That’s not how capital formation works best, and frankly a lot of it came from a place that I don’t think was very healthy,” the billionaire said.
Melvin managed to recoup some ground, ending the year down 39%, with Plotkin vowing not to place the kind of big shorts that blew up on him but could have cushioned the recent slump. This year also proved brutal as markets tumbled — some of his largest positions included Amazon.com Inc., Microsoft Corp. and Live Nation Entertainment Inc., which have been particularly hard hit. The hedge fund lost more than 23% through April, with signs that the drop was even steeper in May.
Anthony Augustin, in Atlanta, is hoping the news about Melvin’s closure will spur another GameStop rally. He currently has about $15,000 in the company's shares, which have slumped more than 70% from their January 2021 high.
“I have long positions in some of the meme stocks so I hope we see the covering from the closing of these funds,” he said. “I'm excited to see what comes from it.”
The 27-year-old was part of the Reddit crowd that initially pushed up GameStop's price last year. He said he made about $20,000 in profit from his trades around the stock in 2021.
“I figured it would blow up on them,” Augustin said, about Melvin’s short positions. “I don't think they're the greatest investors if I'm being frank, although these are tough times to be in the market.”
This article was provided by Bloomberg News.