GameStop Corporation (NYSE: GME) short seller Melvin Capital Management MP said on Monday that it had received $ 2.75 billion in investments from hedge funds Citadel and Point72.
What happened: While Citadel and its partners are investing $ 2 billion, Point72 is pumping $ 750 million into Melvin Capital, the firm’s CEO Gabriel Plotkin said in a statement.
“The team at Melvin is eager to get to work and reward the confidence of these two excellent investment icons,” Plotkin said.
Point72 has already invested $ 1 billion in Melvin since 2019. According to the Wall Street Journal, the investments are in Melvin’s fund and in non-controlling income shares of the company.
Why it matters: Melvin lost by 30% until Friday, thanks to a series of short bets, including against GameStop.
GameStop shares rose to $ 159.18 on Monday, closing nearly 18% at nearly $ 76.80. The stock rose nearly 15.7% to $ 88.87 in the after-hours session.
Dennis Dick, co-presenter of Benzinga PreMarket Prep, rejected the justification for a turnaround in the game retailer’s business.
“I’m trying to say it has absolutely nothing to do with the fundamental operations of the company in a move like GameStop,” Dick said.
The short-term pressure on GameStop’s shares has been driven by online communities engaged in short-selling Citron Research.
Read the following: GameStop’s confusing rally leads to one of its biggest investors being neutral
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