Citadel will redeem $500 million of its shares in Melvin Capital: Report

Citadel will redeem $500 million of its shares in Melvin Capital: Report

Melvin Capital boss Gabe Plotkin testified to Congress on the GameStop saga in February
House Committee on Financial Services/Handout via Reuters

Citadel will redeem about a quarter of its investment in Melvin Capital.

It is unclear if the redemption will be the last from Citadel.

The Wall Street Journal first reported the news on Saturday.

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The hedge fund Citadel will redeem about $500 million of the $2 billion it invested in Melvin Capital earlier this year as the latter suffered crippling losses amid a short squeeze, the Wall Street Journal reported Saturday. The investment was for a non-controlling but revenue-sharing stake in the fund. Melvin Capital lost more than half of its value, over $6 billion, earlier this year as retail investors bid up the shares of what became known as "meme stocks" - firms like GameStop, AMC, and others - on which the fund had short positions. The movement was started and led by members of the Reddit group "r/wallstreetbets."The rising share prices caused Melvin Capital to close its short positions by buying shares of the firms back, which in turn pushed their prices up further.
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