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GameStop Corporation (NYSE: GME) Short seller Melvin Capital Management LP said Monday it had received $ 2.75 billion in investments from hedge funds Citadel and Point72.
What happened: While Citadel and its partners invest $ 2 billion, Point72 is injecting $ 750 million into Melvin Capital, the company’s CEO Gabriel Plotkin said in a statement.
“The Melvin team can’t wait to get down to business and reward the confidence of these two great investment icons,” Plotkin said.
Point72 has already invested $ 1 billion invested in Melvin, as of 2019. The investments are in Melvin’s fund and in non-controlling income shares of the company, according to the Wall Street Journal.
Why is this important: Melvin has lost 30% through Friday, thanks to a series of short bets, including against GameStop.
Shares of GameStop climbed to $ 159.18 on Monday and closed nearly 18% to nearly $ 76.80. Shares rose nearly 15.7% during the after-hours session to $ 88.87.
Benzinga PreMarket Prep co-host Dennis Dick rejected the justification for a turnaround in the game retailer’s business.
“I’m trying to say that it has absolutely nothing to do with the fundamentals of the business in a movement like GameStop,” Dick said.
GameStop’s stock reduction was driven by online communities, which are in conflict with short seller Citron Research.
Read more: GameStop’s confusing rally leads one of its biggest investors to go neutral
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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