NEW YORK (Reuters) – A handful of small hedge funds were able to take advantage of the Reddit rally that caused GameStop Corp’s stock and other out-of-favor stocks to skyrocket last month at the expense of prominent investors opposing the stock, according to the filings that are released on Tuesday.
Hedge funds including Maverick Capital, Shellback Capital, Landscape Capital Management and Engineers Gate Manager LP were among those adding a new position or increasing their stake in GameStop during the quarter ended Dec. 30, according to a regulatory filing known as 13-Fs. If each fund had sold its shares of GameStop near the record price of $ 347.15, they would have made a profit of 1,600% or more.
For example, Shellback could have seen its 200,000 shares reach a value of $ 69.5 million had it held through January 27, a gain of nearly 1,750% from its market value of $ 3,768,000 at the end of December.
Hedge Fund Senvest, which told the Wall Street Journal that it made a profit of $ 700 million on 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, leaving it with 4.7 million shares, registration files show.
The filings do not include short positions and funds may have been short as well, which would have reduced gains from long positions.
GameStop shares soared as investors bought the stock after the Reddit forum WallStreetBets hoping to punish hedge funds like Melvin Capital Management who had taken short positions in the stock. Melvin lost more than 50% in January and required a $ 2.75 billion capital injection from hedge funds Point72 Asset Management and Citadel.
Other hedge funds that entered January with bearish bets against GameStop included Maplelane Capital and Sculptor Capital, according to filings.
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
In addition to positions in GameStop, hedge fund managers continued for a quarter, including the addition of electric carmaker Tesla Inc to the benchmark S&P 500 and President Donald Trump’s failed attempts to reverse the result of the Nov. 3 presidential election.
Tesla’s inclusion in the S&P 500 forced index-tracking funds to buy stocks, boosting their stocks in the fourth quarter. Some hedge funds such as Coatue Management have significantly scaled back their holdings over the same period, making them less likely to take advantage of the company’s 13.4% profit for the year to date.
George Soros’ Soros Fund Management exited its position in Twitter Inc, while Kerrisdale Capital, whose founder told Reuters this year that the company is turning around, has cut its stake by 29%.
The company’s stock is up nearly 37% so far.
Tiger Global, meanwhile, appeared to be investing heavily in several new listed companies and increased its stakes in GoodRx Holdings Inc, DoorDash, Snowflake Inc, Airbnb and Tencent Music Entertainment Group.
Reporting by David Randall and Svea Herbst-Bayliss; edited by Megan Davies and David Gregorio