Update 9:40am: Updates to include details that Melvin's positions have already been liquidated.
Melvin Capital, the hedge fund that was pummeled by the GameStop (GME) short squeeze last year, is said to plan to wind down .
Melvin, run by Gabe Plotkin, plans to shut down and return cash to investors, according to media reports from Bloomberg and CNBC. Melvin's assets were $7.8 billion as of the end of last month with the majority in the hedge funds.
The news comes after reports last month that Melvin was going to try to salvage the fund by starting a new fund with the money his investors decided to reinvest, though the plan was nixed after getting negative feedback from investors, according to media reports.
“The past 17 months has been an incredibly trying time for the firm and you, our investors,” Plotkin wrote in a letter seen by Bloomberg. “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.”
The Melvin fund was down 23% through the end of April, according to reporting from CNBC's Leslie Picker.
The WSJ reported in February that hedge fund Citadel LLC, which gave Melvin Capital about $2B when it was struggling from its short bet on GameStop (GME) last January, was again paring its investment in the fund.
Bloomberg reported in March that Steve Cohen's Point72 planned to redeem its investment in Melvin Capital in increments over time.
The Melvin Capital wind down comes after the hedge fund reported in its 13F filing this week that the it doubled up on Amazon and slashed its stake in Live Nation Entertainment and Bill.com Holdings in Q1.
Melvin's public positions have already been liquidated, according to reporting from CNBC's David Faber on Thursday.