Evan Agostini / AP
- Fidelity Investments sold all but 87 shares of its stake in GameStop in January, according to SEC records.
- Fidelity was once the largest shareholder in video game retailers with 13% of the company.
- The company was not the only institutional investor to profit from the stock when the price soared.
- Senvest Management also made nearly $ 700 million in profits from trade, the Wall Street Journal reported.
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Fidelity Investments profited from its GameStop shares amid the meteoric rise in shares in January. The company sold all but 87 shares, according to regulatory documents published on January 29.
Fidelity was GameStop’s largest shareholder at the same time, owning 9.3 million shares, or 13% of the company, on December 31.
The video game retailer’s stock soared in January after the company became the target of traders on Reddit’s WallStreetBets forum looking to start a squeeze on heavily sold shares.
What started as a way for a group of traders to make a profit quickly turned into a full-fledged populist movement that saw retail traders on Reddit face short-term hedge funds like Melvin Capital.
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For a while, Redditors held institutional investors by the collar when GameStop’s shares jumped more than 1,900%, from early January prices to a closing price of more than $ 340 per share on January 27.
Then, brokers stepped in and stopped buying popular stocks, and retail traders have since retreated. GameStop’s shares traded at around $ 50 per share on Thursday.
It wasn’t just retail merchants who profited from GameStop’s rise. Institutional funds like Senvest Management also went into action, accumulating almost $ 700 million in profits under the name.
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Almost all of Fidelity’s holdings were in two mutual funds, the Fidelity Low-Priced Stock Fund and the Fidelity Series Intrinsic Opportunities Fund, both managed by Joel Tillinghast.
However, these positions do not account for the interests of Fidelity’s sister company, Geode Capital, which manages all investments in Fidelity’s stock indices.
Tillinghast shared his reasoning behind owning small retail businesses last year, before the GameStop saga.
“If there is a vaccine for Covid-19 and smaller-cap companies, such as retailers and apparel companies, successfully transition to an ideal physical store and e-commerce business model, it is possible that many smaller stores would undervalue -cap companies demonstrate exceptional profit growth, “said Tillinghast, by WSJ.
Although Tillinghast’s theories did not materialize, his funds were still able to capitalize on his investments in GameStop.
GameStop fell 3.81% to $ 49.25 from 13.38 EST on Thursday.