GameStop Corporation (NYSE: GME) Short seller, Melvin Capital Management LP, said on Monday it 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 injecting $ 750 million into Melvin Capital, said company CEO Gabriel Plotkin in a statement.
“The Melvin team is looking forward to getting to work and rewarding the trust of these two great investment icons,” said Plotkin.
Point72 has already invested $ 1 billion in Melvin, as of 2019. The investments are in Melvin’s fund and in non-controlling shares of the company, according to the Wall Street Journal.
Why it matters: Melvin lost 30% through Friday, thanks to a series of short bets, including against GameStop.
GameStop’s shares reached $ 159.18 on Monday and closed up almost 18% to almost $ 76.80. Shares rose nearly 15.7% after-hours to $ 88.87.
Benzinga PreMarket Prep co-host Dennis Dick rejected the justification for a turnaround in the game retailer business.
“I’m trying to say that this has absolutely nothing to do with the company’s fundamentals in a movement like GameStop,” said Dick.
The tightening of GameStop’s stock was driven by online communities, which are in a fight with short seller Citron Research.
Read below: GameStop’s Confounding Rally leads one of its biggest investors to become neutral
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.