GameStop UPDATE: Melvin Capital Loses 53%, Redditors Want to See it Lose Remaining 47%

Melvin Capital, the hedge fund at the center of the GameStop drama, has taken a massive hit because of all that has happened in the past two weeks.

The company has lost a total of 53 percent in January, as reported by Wall Street Journal.

Melvin Capital Loses Big

To stay afloat, the company has reportedly received commitments for fresh cash from investors in the last few days of January. This is what an insider revealed on Sunday, the last day of the month.

Melvin ended January with over $8 billion in assets. While this seems big, it is a marked decrease from its starting number, which was at roughly $12.5 billion in assets, the source revealed.

The firm, founded in 2014 by Gabe Plotkin, had bet against the already once ailing video game retailer GameStop's stock.

It was not a surprising bet, since five months ago, its shares were valued at less than $5. Logical analysts would have done the same and bet that it would fall.

However, a wave of retail investors, comparing notes on social media platform Reddit and then carrying out their strategy through the online trading app Robinhood, took the other side of Plotkin's trade to send the stock up. The rise cannot be undermined and can be best described as meteoric. It went up 1,625 percent this month to close at $325 on Friday.

The Wall Street Journal first reported the loss and the whole drama has created a frenzy, even among those who normally do not care about stock happenings.

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Melvin Capital Infused with Cash Before January Ends

Hedge funds Point72 Asset Management and Citadel have decided to give a $2.75 billion capital infusion to Melvin Capital earlier in the week, so that it can compensate for the humungous loss.

"The fund's portfolio liquidity is strong. Use of leverage is at the lowest level since Melvin Capital's inception in 2014," the insider explained.

Citadel lost less than 1 percent on its Melvin position in its flagship fund in January, a person familiar with the matter said on Sunday.

As news of losses at many hedge funds spread in recent days, speculation mounted about which firms might be forced to shut their doors. Several investors and fund managers said clients have been more patient with certain firms that have a long and strong track record, likely allowing them to survive this month's deep losses.

It remains to be seen if these fresh injections can save Melvin Capital from the very persistent "amateur" investors who have made the hedge fund their core "enemy."

According to the Wall Street Journal, Melvin's losses are the most apparent wound of them all, amidst this never before seen, and not anticipated extraordinary drama playing out between so called hedge-fund giants and amateur traders congregating on forums such as Reddit's WallStreetBets.

The amateurs have made Melvin Capital their "principal enemy," given how much they talked about seeing it ultimately go bust.

They even gleefully expressed enthusiasm about the hedge fund's losses. "Only 47% left to go!!" one user posted Sunday, upon learning of Melvin's losses.

READ MORE: GameStop Pause Trading: Reason Why it Ended Early