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Handful of hedge funds bet big on GameStop before its wild ride

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David Randall and Svea Herbst-Bayliss
·3 min read
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By David Randall and Svea Herbst-Bayliss

NEW YORK, Feb 16 (Reuters) - A handful of small hedge fundswere in a position to profit from the Reddit rally that sentshares of GameStop Corp and other out-of-favor stocksrocketing higher last month at the expense of prominentinvestors who had bet against the stocks, according tosecurities filings released Tuesday.

Hedge funds including Maverick Capital, Shellback Capital,Landscape Capital Management, and Engineers Gate Manager LP wereamong those that added a new position or increased their stakesin GameStop during the quarter that ended Dec. 30, according toa regulatory filings known as 13-Fs. Had each fund sold itsshares of GameStop near the record closing price of $347.15,they would have banked gains of 1,600% or more.

Shellback, for instance, could have seen its 200,000 sharesreach a value as high as $69.5 million had it held through Jan.27, a gain of nearly 1,750% from its market value of $3,768,000at the end of December.

Hedge fund Senvest, which told the Wall Street Journal thatit scored a $700 million profit on the GameStop position,increased its position in the company by 56% when it bought 1.8mln shares.

Maverick, increased its stake by 164%, or 2.9 millionshares, leaving it with 4.7 million shares, regulatory filingsshow.

The filings do not include short positions and funds mayalso have been short, which would have diminished profits fromlong positions.

GameStop shares surged as investors following the Redditforum WallStreetBets bought the stock hoping to punish hedgefunds such as Melvin Capital Management that had taken shortpositions in the stock. Melvin lost more than 50% in January,requiring a $2.75 billion capital infusions from hedge fundsPoint72 Asset Management and Citadel.

Other hedge funds that entered January with bearish betsagainst GameStop included Maplelane Capital and SculptorCapital, according to securities filings.

Maverick, Shellback Capital, Landscape Capital Management,and Engineers Gate Manager LP and Senvest did not respond forrequests to comment for this story.

OTHER BETS

Along with positions in GameStop, hedge fund managersnavigated a quarter that included the addition of electric carmaker Tesla Inc to the benchmark S&P 500 and PresidentDonald Trump's unsuccessful attempts to overturn the result ofthe Nov. 3 presidential election.

Tesla's inclusion in the S&P 500 forced index-tracking fundsto buy shares, boosting its shares during the fourth quarter.Some hedge fund such as Coatue Management significantly cut backtheir stakes during the same time period, leaving them lesslikely to gain from the company's 13.4% gain for the year todate.

George Soros’ Soros Fund Management exited its position inTwitter Inc while Kerrisdale Capital, whose foundertold Reuters this year the company is enjoying a turnaround, cutits stake by 29%.

Shares of the company are up nearly 37% for the year todate.

Tiger Global, meanwhile, appeared to be betting big onseveral newly-public companies, raising its stakes in GoodRxHoldings Inc, DoorDash, Snowflake Inc, Airbnb, and Tencent MusicEntertainment Group.(Reporting by David Randall and Svea Herbst-Bayliss; editing byMegan Davies and David Gregorio)