As the stock of GameStop, a video game retailer, increased amid a wave of speculative investment by small investors, Point72, the hedge fund managed by Mets owner Steve Cohen, has lost nearly 15 percent this year, from according to a person with knowledge of the matter.
GameStop’s sudden rise – stocks jumped 135 percent on Wednesday alone and rose more than 1,700 percent this year – affected some major investors who bet against the shares. 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 made a massive bet against GameStop.
As stocks rose, Melvin was overwhelmed with sudden losses and had to accept $ 2.75 billion in bailout capital from two outside investors. One of the rescuers was Point72, who already had about $ 1 billion under management with Melvin, said two people with knowledge of the relationship, and added $ 750 million to help stabilize Melvin this week.
As Melvin was investing money on behalf of Point72, Point72’s results were also hampered by the recent turmoil, those people said.
Point72’s losses are the first clear indication of the ripple effect of Melvin’s recent problems, which have been a cause of concern for Wall Street and the baseball community. The shares faced the worst performance since October on Wednesday, in part because investors are concerned that other large funds may also be facing losses.
And on Tuesday night, Cohen faced questions on Twitter about the potential impact of Melvin’s losses on the Mets, which he bought for about $ 2.5 billion in November.
“Why would one have something to do with the other,” Mr. Cohen replied in a post to Twitter.
A Cohen spokesman said he was not available for comment.