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Point72 has suffered a loss of almost 15% this year – thanks to the sharp rise in shares of GameStop Corporation (NYSE: GME), a person familiar with the matter told The New York Times.
What happened: The hedge fund managed by Steve Cohen – owner of New York Mets – suffered the losses due to its investment in Melvin Capital, another fund that bet against the games retailer’s shares, 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 is this important: On Monday, Point72 – which had already invested $ 1 billion in Melvin in 2019 – injected an additional $ 750 million into the besieged fund, while hedge fund Citadel invested $ 2 billion.
Short sellers Melvin and Citron Research hedged their shorts against a wave of retail investors boosted by the r / WallStreetbets subreddit.
See also: Michael Burry, GameStop Investor – From ‘The Big Short’ Fame – Dubs Rally ‘Unnatural, Insane, And Dangerous’
“People just want to buy the stocks without even thinking about the company,” said Andrew Left of Citron Research.
GameStop shares have climbed 685% so far this year. AMC Entertainment Holdings Inc (NYSE: AMC), another share targeted by investors on Reddit, jumped over 804%.
Price action: GameStop action closed nearly 134.8% up to $ 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.
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