Melvin Capital says it plans to dispose of the funds

Melvin Capital Management, the hedge fund burned by GameStop mania, has said it will dilute its funds and return the money to investors as losses accelerate during this year’s market turmoil, CNBC has confirmed.

“The past 17 months have been an incredibly difficult time for the company and for you, our investors,” company founder Gaby Plotkin wrote in a letter to investors. “I’ve done everything I can, but lately it hasn’t been enough to deliver the returns you should expect. I now realize I need to move away from external capital management.”

News of the message was first reported by Bloomberg.

Melvin was one of the biggest victims of the stock meme frenzy last year due to his huge exposed position on GameStop. Citadel and Point72 had to inject nearly $3 billion into Plotkin’s hedge fund to shore up his finances.

Plotkin failed to make up for losses in the volatile 2022 year. The fund fell 21% in end of first quarter The number may have worsened in the current quarter as the technology-driven path has intensified in the face of higher prices.

The embattled hedge fund increased its stake in Amazon and Microsoft significantly in the first quarter, According to a regulatory filing. Its largest centers through the end of March included a number of reopening plays such as Live Nation, Hilton Worldwide Holdings, and Expedia.

Melvin said he will not charge an administration fee from June 1.

CNBC reported earlier this month Plotkin discussed a new plan with its investors under which the company would return its capital, giving them the right to reinvest that money into a new fund managed by Plotkin.