AMWatch

Hedge-fund titans lose billions to Reddit traders running amok

For once, Main Street is beating Wall Street.

Driven by the frenzied trading in GameStop Corp. and other stocks that hedge funds have bet against, the losses suffered over the past few days would rank among the worst in some of these money managers’ storied careers. | Photo: FREDERIC J. BROWN/AFP / AFP

In a matter of weeks, two hedge-fund legends -- Steve Cohen and Dan Sundheim -- have suffered bruising losses as amateur traders banded together to take on some of the world’s most sophisticated investors. In Cohen’s case, he and Ken Griffin ended up rushing to the aid of a third, Gabe Plotkin, whose firm was getting beaten down.

Driven by the frenzied trading in GameStop Corp. and other stocks that hedge funds have bet against, the losses suffered over the past few days would rank among the worst in some of these money managers’ storied careers. Cohen’s Point72 Asset Management has declined 10 percent to 15 percent so far this month, while Sundheim’s D1 Capital Partners, one of last year’s top-performing funds, is down about 20 percent. Melvin Capital, Plotkin’s firm, had lost 30 percent through Friday.

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