A bunch of redditors took out a giant formerly successful hedge fund.
when there's one down, there will be others.
blood in the water.
Citadel LLC and Point72 Asset Management are investing $2.75 billion into hedge fund Melvin Capital Management, which has been hard hit by a series of short bets to start the year.
The influx of cash is expected to help stabilize Melvin, which in 2021 has lost 30% through Friday, said people familiar with the firm. Melvin started the year with $12.5 billion and had been one of the best performing hedge funds on Wall Street in recent years. The losses stem from Melvin’s array of short bets against companies and have stunned clients and other traders. Among other short positions, Melvin bet against the surging stock of videogame retailer GameStop Corp.
Melvin had been down about 15% for the year through late last week—but heavily shorted stocks soared Friday. Goldman Sachs Group Inc.’s basket of the 50 stocks with the highest short interest as a share of market capitalization soared Friday, bringing its gains for the year to 25%