The market craze fueled by Reddit that made GameStop and other heavily sold stocks soar in the past month has often been described as a perfect example of retail investors joining the Wall Street establishment.
But not everyone on Wall Street was betting against GameStop.
The hedge fund Senvest Management, based in New York, started investing in GameStop before it caught fire with a large part of the r / WallStreetBets staff and, in October 2020, already owned more than 5% of the company, reported The Wall Street Journal on Wednesday.
Senvest paid less than $ 10 for most of its shares, and after GameStop’s shares peaked at more than $ 400, the hedge fund left with a profit of $ 700 million, one of the biggest winners, according to The Journal.
On the other hand, the Reddit r / DeepF — ingValue user, who was largely credited for starting the GameStop rally, claims to have made a profit of $ 48 million.
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Although Senvest joined GameStop after a convincing presentation by its new CEO George Sherman and the involvement of Chewy investor and founder Ryan Cohen, it was leaked because of a tweet fired by Elon Musk, The Journal reported.
On January 26th, after the market closed, Musk simply tweeted “Gamestonk !!“
Musk’s tweet helped extend the short-squeeze, causing GameStop’s stock to skyrocket another 157% when the market reopened the next morning.
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“Given what was going on, it was hard to imagine it going crazy,” Senvest CEO and fund manager Robert Mashaal told The Journal.
Many hedge funds have been hit hard by the recent market turmoil. But even GameStop short seller Melvin Capital, one of the biggest losers, with losses of 53% in January, managed to redeem $ 2.8 billion from other hedge funds.
Meanwhile, GameStop’s shares had already dropped to around $ 92 on Wednesday, and reports are emerging from retail investors who bought late and have already lost large sums.