Point72 has suffered a loss amounting to nearly 15% this year — thanks to the sharp uptick in the shares of GameStop Corporation GME, a person familiar with the matter told the New York Times.
What Happened: The hedge fund run by Steve Cohen — the owner of New York Mets — suffered the losses due to its investment in Melvin Capital, another fund that bet against the gaming retailer’s stock, the Times reported Wednesday.
See Also: How to Buy Gamestop (GME) Stock
Cohen was asked on Twitter if the losses would affect the Mets.
Why would one have anything to do with the other
— Steven Cohen (@StevenACohen2) January 27, 2021
Why It Matters: On Monday, Point72 — which had already invested $1 billion in Melvin, as of 2019 — infused $750 million more into the beleaguered fund, while the hedge fund Citadel invested $2 billion.
Short sellers Melvin and Citron Research covered their shorts against a wave of retail investors spurred by the subreddit r/WallStreetbets.
“People just want to buy the stock without even thinking about the business,” said Citron Research’s Andrew Left.
GameStop shares have spiked 685% so far this year. AMC Entertainment Holdings Inc AMC, another share targeted by the Reddit investors, has shot up over 804%.
Price Action: GameStop shares closed almost 134.8% higher at $347.51 on Wednesday and fell 15.97% to $292 in the after-hours session.
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