TV & Movies

Gabe Plotkin From Dumb Money Closed Melvin Capital In 2022

He followed in the footsteps of Michael Jordan this year.

Seth Rogen in 'Dumb Money.' Photo via Sony
Lacey Terrell/Columbia Pictures

Remember that Reddit-fueled surge in GameStop stock back in 2021? The much-memed short squeeze made a huge impact on the stock market — and two years later, it’s being revisited in a new film. Based on the book The Antisocial Network by Ben Mezrich, Dumb Money is described as a “David vs. Goliath tale” about the people who got rich buying shares of the video game store’s stock. This would obviously make Goliath, well, the hedge funds that bet against it.

Gabe Plotkin (played by Seth Rogen in Dumb Money) ran one of those hedge funds. So, where is he today?

According to BNN Bloomberg, Plotkin’s company, Melvin Capital, was managing more than $12 billion before the events of early 2021. Plotkin and other hedge funds shorted GameStop — i.e., bet against the success of the company in order to turn a profit. However, when users from Reddit’s r/wallstreetbets and other social media decided to invest in GameStop en masse (a short squeeze), this led to major losses for the hedge funds. Melvin Capital reportedly lost 53% on its portfolio that January, according to The New York Times.

Melvin Capital could not continue long after that kind of loss — and by May 2022, it closed down, per The Times. The paper cited a letter to investors, which announced plans to liquidate and return cash accordingly. In addition to shutting down Melvin Capital, Plotkin reportedly acknowledged to recipients that he needed to “step away from managing external capital.”

A year later, according to an NBA press release, Plotkin stepped into a new role: an owner of the Charlotte Hornets. Plotkin previously had a stake in the team but purchased a majority stake from Michael Jordan this year. “Our vision is to take the Hornets to the next level, both on and off the court,” Plotkin and his co-chairman, Rick Schnall, said in a statement. “We will look to build a highly competitive basketball team, develop innovative business practices, give back to our community, and connect with our fans.”

The original press release adds that Plotkin manages personal wealth at the Miami Beach-based Tallwoods Capital, a “private single family office” — which, per Investopedia, is “a private wealth management advisory firm that serves ultra-high-net-worth individuals.” According to the Tallwoods Capital website, it manages the personal wealth of its principal, which is Plotkin. “We do not accept outside capital,” the site makes clear.