Melvin Capital is a New York City-based investment firm founded in 2014 by Gabriel Plotkin.
The firm absorbed whopping losses in January of 2021 after betting against GameStop.
Who is Gabriel Plotkin and when did he launch Melvin Capital?
Gabriel Plotkin is a hedge fund manager who founded Melvin Capital in 2014.
"The firm uses a bottom-up, fundamental research-driven process to identify investments employing a long-short equity strategy," according to the company's website.
The firm is located on Madison Avenue in New York City.
What does a hedge fund do?
A hedge fund's goal is to maximize investor returns and eliminate risk.
Hedge funds are alternative investments using pooled funds that "employ different strategies to earn active returns, or alpha, for their investors," according to Investopedia.
They are more expensive compared to conventional investment funds, and "will often restrict investment to high net-worth or other sophisticated investors."
The first hedge fund was launched in 1949 and they took off in the 1990s, according to Investopedia.
What are Melvin Capital's 2021 losses?
Melvin Capital Management lost 53 percent in January of 2021 after betting against GameStop and other stocks, according to CNBC.
The firm's assets are down from more than $12billion to about $8billion, according to the news outlet.
“The market action has been a wake-up call and retail traders are likely to continue to be a force to be reckoned with, which will probably permanently affect the business models of institutional investors,” Maneesh Deshpande, a strategist at Barclays, told the Financial Times.
GameStop shares have soared more than 1,625 percent this year, according to the outlet.
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