As shares of GameStop, the video game retailer, rose amid a spate of speculative investment by small investors, Point72, the hedge fund managed by Mets owner Steve Cohen, lost nearly 15 percent according to one person with knowledge of the matter.
GameStop’s sudden surge – the stock jumped 135 percent on Wednesday alone and rose more than 1,700 percent this year – has taken a toll on some large investors who have rallied against the stock. The losses at Point72, which manages nearly $ 19 billion in assets, stem in part from the company’s investment in Melvin Capital, a hedge fund that had a big bet against GameStop.
As the shares rose, Melvin was saddled with sudden losses and had to accept $ 2.75 billion in rescue capital from two outside investors. One of the rescuers was Point72, which already had about $ 1 billion under Melvin’s management, said two people were aware of the relationship and added $ 750 million to help stabilize Melvin this week.
Because Melvin invested money on behalf of Point72, Point72’s results were also hurt by the recent unrest, the people said.
Point72’s losses are the first clear indication of the effect of Melvin’s recent problems, which have caused concern for Wall Street and the baseball community. Equities suffered their worst performance on Wednesday, as investors worried that other large funds could also experience losses.
And late Tuesday night, Cohen had questions on Twitter about the possible impact of the Melvin losses on the Mets, which he bought in November for about $ 2.5 billion.
“Why would the one have anything to do with the other,” Cohen replied in “after post on Twitter.
A Cohen spokesman said he was not available for comment.