GameStop short-seller Melvin Capital lost 53% this month after the Reddit-fueled frenzy sent shares soaring

<p><img src="https://static6.businessinsider.com/image/6011b2a81d2df20018b712b4-1778/Gabe Plotkin:Alex Flynn:Bloomberg.jpg" border="0" alt="Gabe Plotkin" data-mce-source="Alex Flynn/Getty Images/Bloomberg" data-mce-caption="Melvin Capital founder Gabe Plotkin"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>Melvin Capital Management lost over half its assets after GameStop burned short-selling funds this month.</p><p>The hedge fund, which was at the heart of the GameStop frenzy, lost 53% in January, sources close to the fund told Insider. The Wall Street Journal <a href="https://www.wsj.com/articles/melvin-capital-lost-53-in-january-hurt-by-gamestop-and-other-bets-11612103117'st=nkgd4es4kgjua0k&amp;reflink=article_copyURL_share">first reported</a> the loss.&nbsp;</p><p>Melvin Capital, founded by star portfolio manager Gabe Plotkin<strong>,</strong> started the year with $12.5 billion in assets and ended the month with more than $8 billion in assets under management after current investors committed additional capital, the source said. <a href="https://www.businessinsider.com/hedge-fund-billionaire-and-new-york-mets-owner-left-twitter-after-gamestop-backlash-2021-1">Billionaire investors Steve Cohen</a> and Ken Griffin invested <a href="https://markets.businessinsider.com/news/stocks/steve-cohen-ken-griffin-invest-3-billion-gamestop-short-seller-2021-1-1030003305'utm_source=markets&amp;utm_medium=ingest">$2.75 billion</a> into the hedge fund earlier this week.</p><p>Melvin Capital, along with high-profile hedge funds <a href="https://markets.businessinsider.com/news/stocks/citron-gamestop-reddit-short-position-covered-loss-reddit-andrew-left-2021-1-1030009872'utm_source=markets&amp;utm_medium=ingest" target="_blank" rel="noopener">Citron Research</a>&nbsp;and <a href="https://markets.businessinsider.com/news/stocks/gamestop-stock-traders-reportedly-driven-loss-steve-cohens-fimr-point72-2021-1-1030015737'utm_source=markets&amp;utm_medium=ingest" target="_blank" rel="noopener">Point72</a>, got <a href="https://markets.businessinsider.com/news/stocks/hedge-funds-torched-wall-street-bets-gamestop-short-squeeze-reddit-2021-1-1030016596">torched</a> after GameStop shares skyrocketed this month, fueled by Redditors <a href="https://www.businessinsider.com/robinhood-new-details-limit-trading-deposit-requirements-2021-1">using trading app Robinhood.</a></p><p>Individual retail investors, including members of the popular Reddit forum r/WallStreetBets, attempted to burn short-sellers of GameStop by buying up shares and sending the <a href="https://www.businessinsider.com/gamestop-stock-experts-predict-next-move-reddit-traders-take-profits-2021-1'r=ts-sub">s</a><a href="https://markets.businessinsider.com/news/stocks/gamestop-stock-price-day-traders-robinhood-eases-buying-restrictions-2021-1-1030019304">tock surging as&nbsp;much as 2,000% month-to-date.&nbsp;</a> Short-sellers lost about $19 billion on GameStop this year, according to figures from <a href="https://markets.businessinsider.com/news/stocks/short-sellers-sitting-on-19-billion-of-losses-on-gamestop-data-shows-2021-1-1030020684">data provider Ortex</a>.</p><p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/drivewealth-ceo-gamestop-amc-meme-stock-trading-frenzy-democratizing-investing-2021-1'r=aa-sub">How 'democratizing investing' has paved the way for the meme stock moment, according to the CEO of a fintech that powers investing for Revolut and Cash App</a></em></p><p>Melvin <a href="https://markets.businessinsider.com/news/stocks/gamestop-stock-short-sellers-melvin-capital-citron-surrender-bets-gme-2021-1-1030010382">closed its short position</a> on GameStop stock on January 27.</p><p>New and existing clients signed up to invest additional funds into Melvin Capital on February 1, the Journal reported, but the firm would not disclose how much.</p><p>Citron Research also closed its short position on GameStop after covering a <a href="https://markets.businessinsider.com/news/stocks/citron-gamestop-reddit-short-position-covered-loss-reddit-andrew-left-2021-1-1030009872">100% loss</a>. Citron Research managing partner Andrew Left, a <a href="https://www.businessinsider.com/why-gamestop-stock-reddit-wallstreetbets-2021-1">target</a> for impassioned investors on Wall Street Bets, announced the firm would stop publishing "short reports."&nbsp;</p><p>The frenzy surrounding GameStop shares turned into a "populist movement," <a href="https://markets.businessinsider.com/news/stocks/gamestop-wallstreetbets-reddit-trader-mania-populist-movement-occupy-wall-street-2021-1-1030022070">Insider's Ben Winck</a> reported, and garnered responses from <a href="https://www.businessinsider.com/gamestop-warren-aoc-slam-wall-street-market-like-a-casino-2021-1">progressive lawmakers</a> calling for tighter market regulation.&nbsp;</p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/robinhood-restricts-gamestop-stock-trading-23-companies-app-2021-1" >Robinhood is now limiting users to 1 share of GameStop and has restricted trading on 22 other companies</a></strong></p><p><a href="https://www.businessinsider.com/melvin-capital-lost-53-percent-january-after-gamestop-shares-skyrocketed-2021-1#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/transgender-activist-former-white-house-intern-sarah-mcbride-isnt-discouraged-by-trump-2018-3">Sarah McBride made history becoming the first openly trans person elected to a state Senate seat. 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