Some of the toughest hedge funds from January’s populist short squeeze have already recovered from the pain inflicted by retail traders looking at Wall Street, The Post has learned.
Frantic moves in shares such as GameStop and AMC Entertainment at the start of the year saw at least three funds bounce back somewhat in February, including Melvin Capital, the main target of the so-called “Reddit Rally” movement.
Gab Plotkin drove Melvin, a bad rap for a $ 2.75 billion lifeline he received in the midst of the short squeeze, which rose 22 percent last month, as Bloomberg News previously reported.
Sources said Andreas Halverson’s Viking Global Investors and Daniel Sundim D1 Capital Partners have also started the recovery process. Sources said that Viking grew by 5 percent last month, while D1 grew by 15 percent.
Funds are still down for the year, however, following a major January loss by retail traders using reddit boards and a no-free trading app to target short-selling hedge funds by purchasing “meme stocks”.
According to a Bloomberg report, Melvin still needs to make a 75 percent gain despite a 53 percent loss of eye damage in January.
But Viking and D1 are close to coming back to the green with Viking in the month of February. It dropped to just 2.3 percent after a 7 percent drop in January.
Meanwhile, D1, according to a source with knowledge of returns, ended last month, down about 5 percent, after a 20 percent decrease in grueling squeeze.
The reason for the rebound is not clear, except that the January squeeze on the shares of the meme was so sudden and massive that it flowed into funds in small positions like tsunamis, otherwise healthy portfolios. By covering their shorts on GameStop and other mem shares as Robinhood, the funds were able to ride back quickly in a month when the S&P 500 rose more than 4 percent.
“It moved fast,” a macro hedge fund manager quipped. “January is intimidating among these people, but it looks like they should be flat or up by April.”
“They came for the” suit “and offered it to the merchant.” “But I’m not hurting too much.”
Sources said Mets owner Steve Cohen saw his Point 72 fund in February after falling 9 percent in January.
The January short-squeeze may also rule out an earlier feud between Viking and D1, which was formed in 2017 when Sundaram stepped down as Viking’s chief investment officer. Exit forced Greenwich-based Megafund to return $ 8 billion to shareholders just months before its former Star Trader launched D1.
Another hedge fund manager said, “There was definitely some smile in Greenwich that Sundaram was more down.” “Sundaram always took bigger swings than Halvarsen, it’s not a secret.”
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