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GameStop (GME) short poster child Melvin Capital to close all hedge funds

Yub Nub!


Melvin Capital, the hedge fund that became synonymous with being short GameStop shares, has announced that they will be closing all of their funds and returning what remains of the cash to investors. 

Just last month, reports began hitting the news wire that Melvin Capital was pitching clients on yet another fund strategy that was going to focus on short selling... again. This came after a failed bet on Facebook led the firm to a horrible -21% return in Q1 2022. With the technology sector and broader market experiencing even more selling in Q2, it stands to reason that Melvin Capital was unable to turn around their performance. Making matters worse for the fund, manager Gabe Plotkin increased positions in Amazon and Microsoft during Q2 2022, which turned out about as well as most of their recent bets.

Melvin Capital's Gabe Plotkin seen here pooping his pants in front of Congress.
Melvin Capital's Gabe Plotkin seen here pooping his pants in front of Congress.

It certainly seems that Plotkin's request for a second second chance fell on deaf ears. Citadel and Point72 infused close to $3 billion into Melvin just last year, but times have changed and Plotkin's track record has become increasingly pooptastic.

“The past 17 months has been an incredibly trying time for the firm and you, our investors,” founder Gabe Plotkin wrote in a letter to investors. “I have given everything I could, but more recently that has not been enough to deliver the returns you should expect. I now recognize that I need to step away from managing external capital.”

Melvin also let investors know that they will cease collecting management fees as of June 1. One GME investor was quoted saying that this was similar to when the Ewoks of Endor helped takedown the Death Star in historic and stunning fashion.

This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.

Full Disclosure:

At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, or his company Virtue LLC had the following positions:

Long GameStop via GME shares 

Long GameStop via GME call options


Asif Khan is the Luminary and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

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