NEW YORK (Reuters) – Some small hedge funds were in a position to profit from the rise of Reddit, which caused GameStop Corp shares and other disadvantaged stocks to skyrocket last month at the expense of prominent investors who had bet against stocks, according to securities reports released Tuesday
Hedge funds, including Maverick Capital, Shellback Capital, Landscape Capital Management and Engineers Gate Manager LP were among those who added a new position or increased their holdings in GameStop during the quarter ended December 30, according to regulatory documents known as 13- Fs. If each fund had sold its GameStop shares close to the record closing price of $ 347.15, they would have made gains of 1,600% or more.
Shellback, for example, could have seen its 200,000 shares reach as high as $ 69.5 million if it had been held until January 27, a gain of almost 1,750% of its market value of $ 3,768,000 at the end from December.
The hedge fund Senvest, which told the Wall Street Journal that it made a profit of $ 700 million in the GameStop position, increased its position in the company by 56% when it bought 1.8 million shares.
Maverick increased its stake by 164%, or 2.9 million shares, to 4.7 million shares, according to regulatory records.
The records do not include short positions and the funds may also have been short, which would have decreased profits from long positions.
GameStop’s shares rose as investors after the Reddit WallStreetBets forum bought the shares in hopes of punishing hedge funds like Melvin Capital Management, which had taken short positions in the shares. Melvin lost more than 50% in January, requiring a $ 2.75 billion capital injection from the hedge funds Point72 Asset Management and Citadel.
Other hedge funds that entered bearish bets against GameStop in January included Maplelane Capital and Sculptor Capital, according to securities records.
Maverick, Shellback Capital, Landscape Capital Management and Engineers Gate Manager LP and Senvest did not respond to requests for comment on this story.
OTHER BETS
Along with positions at GameStop, hedge fund managers navigated a quarter that included the addition of electric car maker Tesla Inc to the S&P 500 benchmark and President Donald Trump’s unsuccessful attempts to overturn the November 3 presidential election result. .
Tesla’s inclusion in the S&P 500 forced index tracking funds to buy shares, increasing its shares during the fourth quarter. Some hedge funds, such as Coatue Management, significantly reduced their holdings during the same period, leaving them less likely to profit from the company’s 13.4% gain to date.
George Soros’ Soros Fund Management stepped out of its position at Twitter Inc, while Kerrisdale Capital, whose founder told Reuters this year that the company is undergoing a recovery, reduced its stake by 29%.
The company’s shares rose almost 37% in the year.
Meanwhile, Tiger Global appeared to be betting heavily on several newly opened companies, increasing its stakes in GoodRx Holdings Inc, DoorDash, Snowflake Inc, Airbnb and Tencent Music Entertainment Group.
Reporting by David Randall and Svea Herbst-Bayliss; edition of Megan Davies and David Gregorio