Melvin Capital said it is finally shutting down after getting clobbered by Reddit investors last year — and now clients are doubly angry because its founder Gabe Plotkin is still charging them fees, The Post has learned.
Plotkin — whose massive short positions in “meme stocks” like GameStop made him a surprise punching bag for day traders during the throes of the pandemic — told investors in a Wednesday letter obtained by The Post that he will continue to charge fees to clients through June 1.
That’s despite the fact that Plotkin has spent most of April and May considering whether or not to keep the fund open instead of making investors money, according to one angry client, who added that the continued fees were “beyond greedy.”
“I’m sure he spent the last two weeks on lawyers and paperwork and not on the fund or making us money,” the source fumed. “Meanwhile he’s charging us fees for the entire month?”
The source adds that Plotkin can afford to reimburse the management fees for May. “The guy has made billions over the last many years — he’s not pinched for cash.”
Investors will begin getting some money back as soon as May 31 and will receive the rest of their funds the first three weeks of July, according to Plotkin’s letter.
“The past 17 months has been an incredibly trying time for the firm and you, our investors,” Plotkin wrote. “I have given everything I could, but more recently that has not been enough to deliver the returns you should expect. I now recognize that I need to step away from managing external capital.”
A spokesperson for Melvin declined further comment.
Melvin has been struggling to recover after a massive short squeeze by day traders on GameStop crushed the fund in January 2021. Days later, Melvin got a bailout from hedge-fund titans including Mets owner Steve Cohen and Citadel boss Ken Griffin. In April, the fund was down 23.3% year to date, according to a letter to investors reviewed by The Post.
During the past few months, Plotkin has gone back and forth on whether to return capital to investors. In April, he suggested he would return investors their capital at the end of June and then allow them to reinvest in the beginning of July.
At the time, Plotkin said he wouldn’t try and make investors whole. Instead, he’d demand performance fees of potential clients, including those who previously lost money with him. According to reports, Plotkin said he would keep the new fund small — under $5 billion and focus on shorting stocks.
After facing backlash, Plotkin told investors in a dramatic about face that he would delay his decision to shut down the fund, as first reported by The Post.
Despite the imminent shutdown, Plotkin’s lifestyle thus far appears to be unaffected by his recent losses.
“Plotkin should sell his $44 million Miami Beach home after losing all of us so much money… rather than charging us more fees,” the investor fumed.
[Written in collaboration with other media outlets with information from the following sources]
