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.
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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