First it was Melvin (no) Capital demanding more, well, capital form existing investors such as Citadel and a new investor, Steve Cohen’s Point72, following news that i had lost a third of its AUM in just one trading day following the massive squeeze in GME and other meme stocks. Then, a few days later, over the weekend we learned that the two anchor investors were already underwater on their investment, as the losses at Melvin accelerated, bringing the total to over $7 billion or some 53% of the fund’s AUM, at which point we joked that the “new” investors may need new investors themselves.
Now, this (formerly comic) scenario is becoming all too real because as Charlie Gasparino reports, Steve Cohen – who over the weekend killed his Twitter account due to “threats”, is offering investors the “unique” opportunity to throw even more good money after bad, and his Point 72 fund “is no longer closed to new investors and began raising new investor cash from brokerages like @MorganStanley last week- sources. As Gasparino explains, the move comes “amid losses at firm due to exposure to Melvin Capital, the depressed hedge fund at the center of the GME frenzy. Person close to Pt72 contends that Cohen sees opportunities as mkts slide. Others say the timing is interesting.”