A handful of hedge funds wager on GameStop earlier than the wild trip of Reuters
© Reuters. FILE PHOTO: A GameStop store is pictured in New York
By David Randall and Svea Herbst-Bayliss
NEW YORK (Reuters) – A handful of small hedge funds were able to capitalize on the Reddit rally that sent stocks off GameStop Corp. (NYSE 🙂 and other unfavorable stocks that soared last month at the expense of prominent investors who had bet against the stocks, according to security filings released Tuesday.
Hedge funds like Maverick Capital, Shellback Capital, Landscape Capital Management and Engineers Gate Manager LP were among those who added a new position or increased their stake in GameStop in the quarter ended December 30th. Fs. If each fund had sold its GameStop stock near the record closing price of $ 347.15, they would have posted gains of 1,600% or more.
Shellback, for example, could have brought its 200,000 shares to a value of $ 69.5 million by Jan. 27, a gain of nearly 1,750% from its market value of $ 3,768,000 at the end of December.
Hedge fund Senvest, which told the Wall Street Journal that it had made $ 700 million in profit from the GameStop position, increased its position in the company by 56% when it bought 1.8 million shares.
Maverick increased its stake 164%, or 2.9 million shares, and left 4.7 million shares.
The filings do not contain short positions and the funds may have been short positions which would have reduced profits from long positions.
GameStop shares rose as investors bought the stock, following the Reddit forum WallStreetBets, in hopes of punishing hedge funds like Melvin Capital Management who were short in the stock. Melvin lost more than 50% in January and required $ 2.75 billion in capital injections from hedge funds Point72 Asset Management and Citadel.
Other hedge funds that started falling bets against GameStop in January were Maplelane Capital and Sculptor Capital, according to securities filings.
Maverick, Shellback Capital, Landscape Capital Management, and Engineers Gate Manager LP and Senvest did not respond to requests for comment on this story.
In addition to positions in GameStop, the hedge fund managers navigated a quarter in which the electric car maker Tesla (NASDAQ 🙂 Inc was included in the benchmark and President Donald Trump’s unsuccessful attempts to discard the result of the November 3 presidential election.
Tesla’s addition to the S&P 500 forced index tracking funds to buy stocks and soared its stocks in the fourth quarter. Some hedge funds like Coatue Management have cut their stakes significantly over the same period, making them less likely to benefit from the company’s 13.4% earnings year-to-date.
George Soros’ Soros Fund Management has left its position in Twitter Inc. (NYSE 🙂 while Kerrisdale Capital, whose founder told Reuters earlier this year that the company is in a turnaround, cut its stake by 29%.
The company’s shares are up nearly 37% over the year to date.
Tiger Global, meanwhile, appeared to be betting heavily on several newly listed companies, increasing its stakes in GoodRx Holdings Inc., DoorDash, Snowflake Inc., Airbnb and Tencent Music Entertainment Group (NYSE :).