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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.




See more stories on Insider's business page.


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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