Melvin Capital Management
| Melvin Capital Management LP | |
| |
| Founded | 2014 |
|---|---|
| Headquarters | New York |
| Key People | Gabriel Plotkin, Chief Investment Officer |
| Products | Registered investment advisor |
| Profile | |
| Website | https://www.melvincapital.com/ |
Melvin Capital Management LP is a registered investment advisor that was founded in 2014 by Gabriel Plotkin, who is the firm’s chief investment officer. The firm says it uses a research-driven process to identify investments, "employing a long-short equity strategy." [1]
History[edit]
Plotkin was one of the more successful traders at SAC Capital Advisors. At one point he and his team managed a stock portfolio valued at about $1.3 billion. In the summer of 2014, he wound down his trading book to set up his own firm, Melvin Capital,[2] reportedly named after his grandfather.
Melvin Capital reportedly was a target of online retail traders who had bought shares in small companies like videogame retailer GameStop in late January 2021. Melvin attracted the traders' attention after it disclosed in a filing that it owned put options on GameStop (put options generally are profitable when the underlying stock sells off.) The Wall Street firm later told the New York Times it had closed out its positions on GameStop, although it reportedly incurred heavy losses. To keep the firm afloat, Gabriel Plotkin turned to his former boss, SAC Capital founder Steven Cohen, and Citadel Investment Group, LLC for a $2.75 billion cash infusion. [3][4] [5]
In May 2022 it was reported that Melvin Capital was shutting down because of the enormous losses from the wrong way bets on GameStop. Melvin started 2021 with more than $12 billion but lost 53% in January. It was propped up by a $2.75 billion bailout from the hedge funds Point72, run by Steven A. Cohen, and Citadel, as well as fresh capital from new investors.[6]
Products and Services[edit]
Hedge fund investment
Key People[edit]
- Gabriel Plotkin, Chief Investment Officer
References[edit]
- ↑ About. Melvin Capital.
- ↑ A Former Top SAC Capital Trader Names New Hedge Fund. NY Times Dealbook.
- ↑ ‘Dumb Money’ Is on GameStop, and It’s Beating Wall Street at Its Own Game. The New York Times.
- ↑ Stocks Have Worst Daily Drop in Months: Live Business Updates. The New York Times.
- ↑ Reddit Crowd Bludgeons Melvin Capital in Warning to Industry. Bloomberg.
- ↑ Melvin Capital, hedge fund torpedoed by the GameStop frenzy, is shutting down.. The New York Times.