An Elite Hedge Fund Bought 1 Million Shares of GameStop Before the Meme Stock Surged 400% - Latest Global News

An Elite Hedge Fund Bought 1 Million Shares of GameStop Before the Meme Stock Surged 400%

Renaissance Technologies bought 1 million shares of GameStop in the last quarter.Reuters

  • A top hedge fund built a GameStop stake from scratch last quarter ahead of the meme stock’s surge.

  • Renaissance Technologies’ 1 million shares were briefly worth $65 million at Tuesday’s peak.

  • RenTech, founded by the late Jim Simons, also increased its AMC bet and reduced Tesla and Nvidia.

A leading global hedge fund said it built a GameStop stake from the ground up last quarter, making it a potential winner from the meme stock’s explosive jump this week.

Renaissance Technologies owned 1 million shares of the video game retailer at the end of March, worth $13 million at the time, according to its first-quarter portfolio update.

GameStop shares rose more than 400% at their Tuesday high, briefly valuing RenTech’s stake at $65 million if it was still intact. The stock price has fallen from that high of nearly $65 to about $33 on Wednesday, still giving the company a value of more than $10 billion.

The rally in GameStop shares was fueled by Keith “Roaring Kitty” Gill’s return to social media this week. The retail investor was one of the biggest winners of the social media frenzy that sent GameStop soaring in early 2021.

RenTech uses algorithms to decide many of its trades, which can result in sweeping changes to its stock portfolio each quarter. It was founded by Jim Simons, the noted Cold War-era mathematics professor and code breaker who died Friday.

The quant fund made further significant changes to its holdings in the last quarter.

It reduced its Nvidia stake by nearly two-thirds, from about 1.5 million shares to 551,000, reducing the value of the position from about $767 million to under $500 million.

RenTech also reduced its Tesla stake from 2.6 million shares worth $635 million to 1.8 million shares worth $316 million. It also increased AMC Entertainment Holdings — another notable meme stock — is increasing its bet in the theater chain from 4.9 million shares worth about $30 million in December to 8.7 million shares in March, valued at $60 million at Tuesday’s close.

The total value of the company’s stock portfolio remained almost unchanged at about $64 billion. The three largest holdings at the end of March were Novo Nordisk, Palantir and Meta. Uber and Nvidia were the second and third largest positions three months earlier.

It’s worth emphasizing that quarterly portfolio updates only provide an overview of a company’s holdings on a specific date and exclude short-selling stocks, private investments and foreign bets.

They do not always paint a complete picture of the investment strategy behind decisions, especially when algorithms dictate trading.

Read the original article on Business Insider

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