The entity started investing in GameStop in September last year and owned more than 5% of the company by October 2020.
The Reddit-fueled market frenzy, which spiked GameStop’s stock price last month, has often been described as a perfect example of amateurs’ victory over professionals. But not everyone on Wall Street bet against the games store.
Senvest Management, a New York-based hedge fund, began investing in GameStop in September last year, before Reddit’s war on Wall Street began. And by October 2020, he owned more than 5% of the company, The Wall Street Journal reports.
Richard Mashaal and Brian Gonick, Fund Managers, paid less than $ 10 for most of their shares from GameStop, and after peaking at over $ 400, they already made a profit of nearly $ 700 million, one of the great fortunes of that January market frenzy.
Senvest’s interest in GameStop was sparked after an engaging presentation by new CEO, George Sherman, in January last year and the involvement of Chewy founder and investor Ryan Cohen.
GameStop is now Senvest’s most profitable investment per dollar earned and the internal rate of return, a performance measure that takes into account the duration of an investment.
Many hedge funds have been hit hard by the recent market frenzy. Investment firm Melvin Capital, one of the hardest hit companies with a 53% loss in January, ended up bailing out $ 2.8 billion from other hedge funds.