(Bloomberg) -- Melvin Capital Management, the once high-flying hedge fund that lost billions of dollars after its bearish wagers were caught up in a Reddit-fueled rally, told investors that it plans to wind down funds and return cash to investors.
“The past 17 months has been an incredibly trying time for the firm and you, our investors,” founder Gabe Plotkin wrote. “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.”
The firm was among several that took severe losses after retail traders rallied together to buy stocks including GameStop Corp., sending the share prices spiraling. Plotkin, who had been short the company, then took a $2.75 billion investment from Citadel, Point72 Asset Management and others.
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