Hedge funds like Melvin with huge short positions in GameStop and other stocks targeted by WallStreetBets got burned. The Reddit group specifically targeted stocks that were heavily shorted. At one point, GameStop had more short interest than shares on the market.
Melvin Capital was founded by Gabe Plotkin, and it started the year with roughly $12.5 billion in assets. It ended the month with more than $8 billion after receiving commitments from current investors for more capital in the final days of the month, the source said.
“The fund’s portfolio liquidity is strong,” the source said. “Use of leverage is at the lowest level since Melvin Capital’s inception in 2014.”