5 Biggest Hedge Fund Casualties of Reddit WallStreetBets’ Short Squeezes

2. Melvin Capital Management

Melvin Capital Management is a hedge fund that operates from New York. It is ranked second on our list of 10 biggest hedge fund casualties of Reddit WallStreetBets’ short squeezes. The fund took heavy losses as it tried to short-sell GameStop Corp. (NYSE: GME) in January. According to a report by news publication CNBC, the fund, managed by Gabriel Plotkin, and with more than $17 billion in assets under management at the end of the first quarter of 2021, was given a bailout worth $3 billion by billionaires Ken Griffin and Steve Cohen in January.

A top holding of Melvin Capital Management is Expedia Group, Inc. (NASDAQ: EXPE), the Wasington-based online travel firm. At the end of the first quarter of 2021, 86 hedge funds in the database of Insider Monkey held stakes worth $6.1 billion in Expedia Group, Inc. (NASDAQ: EXPE), up from 76 in the previous quarter worth $6.5 billion.

In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Expedia Group, Inc. (NASDAQ: EXPE) was one of them. Here is what the fund said:

“Several of our better performers in the first quarter were purchased while their business models were under stress from COVID restrictions or the macro environment the pandemic created. What gave us confidence in purchasing Expedia were the actions the company took to extend out their balance sheets until travel resumed. It should benefit as a broader vaccination rollout prompts cruise lines to resume operations and consumers to start traveling again and are positioned to deliver better margins and gain pricing power as the economy normalizes due to the cost controls implemented during the downturn.”