Melvin Capital Rebounds 21.7% After January’s Short Squeeze

Melvin Capital posted 21.7% in returns in February after sharp losses in the previous month, according to a CNBC report citing unnamed sources.

• The hedge fund previously had short positions at GameStop. It declined by 53% during the short squeeze in January.
• Melvin received as much as $3 billion in investments during the turmoil from Citadel and Steve Cohen’s Point72.
• The firm said it closed positions in late January as the stock climbed. GameStop shares surged from under $20 to nearly $500 before falling sharply.
• Buying in GameStop and other names triggered short squeezes, forcing sellers to buy shares to cover their position.
• Founder Gabe Plotkin testified before Congress regarding market volatility. He said short sellers may have to rethink strategies after a surge in retail trading in select stocks.
• “I think us at Melvin, we’ll adapt and I think the whole industry will have to adapt,” said Plotkin.