Gabe Plotkin’s Melvin Capital Management LP saw gains of more than 20% in February after being brutalized by a retail investor-led short squeeze a month earlier, CNBC reported Wednesday.
What Happened: Melvin fell as much as 53% in January in a short squeeze fueled by users of Reddit forum r/WallStreetBets, which sent the shares of GameStop Corp (NYSE: GME), AMC Entertainment Holdings Inc (NYSE: AMC), BlackBerry Ltd (NYSE: BB), and others soaring.
The fund returned 27.1% in February recouping some of the earlier losses, according to CNBC.
Why It Matters: Hedge funds Citadel and Point72 infused .75 billion in Melvin in late January. The investment was in Melvin’s fund and non-controlling revenue shares, as per the Wall Street Journal.
Melvin subsequently covered its short position in GameStop in January after confirming it had taken a huge hit as did Citron Research.
See Also: Citron Research No Longer Publishing Short Reports, Switches Focus To Multibaggers
In a statement ahead of the House hearing called to look into the GameStop saga, Plotkin denied that Melvin was bailed out by Citadel.
“To be sure, Melvin was managing through a difficult time, but we always had margin excess and we were not seeking a cash infusion,” wrote Plotkin.
Price Action: GameStop shares closed nearly 5.08% at $124.18 on Wednesday and gained 0.66% in the after-hours session.
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