CNBC reported that Melvin Capital Management, the hedge fund burned by the GameStop mania, will unwind its funds this year and return cash to investors as losses accelerated during the recent market turmoil. “The past 17 months has been an incredibly trying time for the firm and you, our investors,” founder Gabe Plotkin wrote in a letter to investors. “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 large short position in GameStop caused Melvin to be one of the biggest victims of the meme stock frenzy last year. To stabilize Plotkin’s hedge fund, Citadel and Point72 infused close to $3 billion into it. Despite a volatile 2022, Plotkin has been unable to recover the losses. The fund was down 21% at the end of the first quarter, and the numbers could have worsened as the technology-driven rout intensified in the face of rising interest rates. According to a regulatory filing, the embattled hedge fund increased its stake in Amazon and Microsoft significantly in the first quarter. At the end of March, the firm’s largest positions included some reopening plays, such as Live Nation, Hilton Worldwide Holdings, and Expedia. Melvin has announced that it will no longer charge management fees as of June 1. CNBC reported earlier this month that Plotkin had discussed a novel plan with its investors under which the firm would return their capital in exchange for the right to reinvest that capital in a fund managed by the firm.