Reddit users took GameStop shares "to the moon."
Amateur traders rocked Wall Street when they banded together on Reddit and sent the value of GameStop shares to the moon. That was more than a year ago, but the fallout isn't quite over just yet.Â
Melvin Capital Management, a hedge fund led by Gabe Plotkin, is closing its doors. The fund was reportedly unable to bounce back from the damage it took during the 2021 GameStop short squeeze. Plotkin's decision was announced to clients on Wednesday in a letter, according to Bloomberg. Melvin Capital declined to comment.
Plotkin's hedge fund was one of the largest victim's of the GameStop and AMC meme stock mania. (A meme stock is any stock that's gone "viral" on social media, and whose value goes up as a result). Though the fund started 2021 in a strong position with more than $12 billion in cash in January, it posted a 53% lost that same month following the attack by the subreddit r/wallstreetbets.Â
"The past 17 months has been an incredibly trying time for the firm and you, our investors," Plotkin wrote in the letter to his clients, according to Bloomberg. "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."
