Steve Cohen’s enormous GameStop losses are his own fault
DENNIS YOUNG, 28 January 2021
For Mets fans hoping for a hard reset under new owner Steve Cohen, one of the richest men ever to buy an American sports team, this offseason has been depressingly familiar.
The team hasn’t splurged on any major free agents or extended any of its own young talent. They had to fire the GM for being outed as a serial sexual harasser just a month after he was hired. And, most alarmingly for the Mets’ competitive fortunes, Cohen has quickly lost a ton of money on an ill-advised investment. Point72, the $19 billion hedge fund owned and operated by Steve Cohen, is down 15% this year, according to the New York Times.
Point72′s losses are almost entirely due to its investment in Melvin Capital, a hedge fund run by one of Cohen’s old lieutenants. Melvin was nearly wiped out entirely this week because it had, fundamentally, placed a large bet against GameStop, the sagging video game retailer located between Auntie Anne’s and Lids at your local mall. Amateur traders on the WallStreetBets subreddit recognized that because hedge funds like Melvin had so heavily “shorted” GameStop and other stocks, they were vulnerable to any kind of run on the stock.
