Point72 suffered a loss of almost 15% this year – thanks to the sharp rise in shares GameStop Corporation (NYSE: GME), a person familiar with the matter told the New York Times.
What happened: The hedge fund, which is managed by Steve Cohen, the owner of the New York Mets, has suffered losses due to its investment in Melvin Capital, another fund that bets against the share of the gambling retailer, Times reported.
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) 27 January 2021
Why it matters: On Monday, Point72 – which has already invested $ 1 billion in Melvin since 2019 – invested $ 750 million more in the beleagured fund, while the hedge fund Citadel invested $ 2 billion.
Short sellers Melvin and Citron Research have covered their pants against a wave of retail investors fueled by the subreddit r / WallStreetbets.
See also: GameStop investor Michael Burry – from ‘The Big Short’ Fame – Dubs Rally ‘unnatural, insane and dangerous’
“People just want to buy the shares without even thinking about the business,” said Citron Research, Andrew Left.
GameStop shares have risen 685% so far this year. AMC Entertainment Holdings Ing (NYSE: AMC), another stock targeted by Reddit investors, shot up more than 804%.
Price action: GameStop shares closed nearly 134.8% higher at $ 347.51 on Wednesday and fell 15.97% to $ 292 in the after-hours session.
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.