Melvin Capital Management, the hedge fund that has borne the brunt of losses from the soaring stock prices of heavily shorted stocks recently, lost 53% in January…. It started the year with about $12.5 billion and now runs more than $8 billion. The current figure includes $2.75 billion in emergency funds Citadel LLC, its partners and Mr. Cohen's Point72 Asset Management injected into the hedge fund last Monday.
“According to Goldman Sachs Prime Services, this week represented the largest active hedge fund de-grossing since February 2009. Funds in their coverage sold long positions and covered shorts in every sector,” the investment bank wrote in a note late Friday.
Fun and games aside, though, the retail-fueled frenzy has real costs, and not just maybe Gabe Plotkin’s $44 million dream house in Miami Beach. Costs borne by the rest of us, such as the disappearance of Andrew Left’s fantastically brutal short-selling research. And now, tragically, inconceivably, that of the playful, delightful Twitter persona of one Steven A. Cohen.
“I’m going to take a break for now,” Cohen said on Twitter late on Friday, citing “personal threats.” His account no longer appeared on Saturday, and a spokeswoman for Cohen’s Point72 Asset Management confirmed it was closed…. Cohen, who previously used Twitter largely to engage with fans of the New York Mets baseball team after he bought a majority stake last year, was among fund managers who received threats as the GameStop saga unfolded.
"I think it's laughable for the hedge funds to cry foul after they do this every single day on a daily basis," [Jordan] Belfort said, "Manipulate stocks, box out the small investor…."
"If it turns out that they shut down trading at the behest of funds saying 'you need to slow down the buying,' the level of criminality there would be unprecedented," Belfort said.
And certainly make his own look almost quaint by comparison, he hopes.
Billionaire Steve Cohen quits Twitter, citing threats in GameStop uproar [Reuters]
GameStop short Melvin Capital lost 53% in January [MarketWatch]
Goldman sees hedge fund exposures close to records, ongoing sell-off risk after GameStop swings [Reuters]
Hedge fund manager hit in GameStop frenzy is developing $44M Miami mega-mansion [N.Y. Post]
Jordan Belfort Says ‘It’s Laughable’ For Hedge Funds to ‘Cry Foul’ Over GameStop Short Squeeze [Newsweek]