Steve Cohen's Hedge Fund Raised An Additional $1.5 Billion After GameStop Rally
Point72 lost around 9 percent in January as WallStreetBets traders drove up the price of GameStop, squeezing the hedge fund out of its positions. Furthermore, Point72 bailed out Melvin Capital in the amount of $750 million after the hedge fund's over-leveraged position on GameStop was exposed. Cohen is also the owner of the New York Mets.
Melvin Capital is run by Cohen's protege Gabe Plotkin and suffered a 53 percent loss in January. The hedge fund also received a cash infusion from Citadel's hedge funds in the amount of $2 billion. It has been estimated that the total losses among short-sellers betting against game stop amounted to around $19 billion in January.
Following the massive and unprecedented rally in several heavily-shorted stocks by retail trades, Goldman Sachs released a research note that incited fear in many hedge funds. The funds started to sell their positions at the fastest rate since 2009 which dragged down the S&P 500 more than 3 percent.
However, markets have recovered nicely this week with the Dow recovering more than 600 points as of Wednesday.