Million bet: shot backwards? This hedge fund benefited from the Reddit run on GameStop stock | message
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Hegdefonds-Bet wins through GameStop stock rally
WallStreetBets plays Senvest Management in the cards
“ we had no idea how crazy it was going to get. “
GameStop and the WallStreetBets movement behind it are currently a widespread topic that is now also of interest outside the stock exchange community and is therefore already being discussed in the broad masses. Opinions on this vary and it is not yet clear to what extent this march on the gaming share, which has been successfully thwarted by shortsellers, will have consequences. While some people say how interesting it is that small investors take on institutional investors, elsewhere the criticism is great and there is talk of market manipulation. And in the middle of it there is a hedge fund that has benefited from the bull market and raked in millions.
Senvest Management will add GameStop to its portfolio as early as 2020
Richard Mashaals and Brian Gonicks hedge fund Senvest Management added shares in video game retailer GameStop to its portfolio back in September 2020, reports the Wall Street Journal (WSJ). At the time, the price hovered between $ 26 and $ 29.
Senvest became aware of the company after a presentation by the CEO at the consumer investment conference in January last year, he told the newspaper. Thereupon the management discussed the situation of the company and evidently came to an optimistic assessment.
Hedge fund earns millions after run on GameStop
But none of the decision-makers had imagined that the share would become one of the best performers. “When it started running, we thought something was simmering here,” Mashaal told WSJ and also added: “But we had no idea how crazy it was going to get.” The meanwhile strong upward movement in the GameStop paper made Senvest Management 700 million US dollars – in January the fund was able to shine with a return of 38.4 percent after fees, according to the report. GameStop has become the flagship of the hedge fund.
Small investors versus shortsellers – but that doesn’t fundamentally work
The abstruse: Actually, the WallStreetBets movement mobilized on Reddit was targeting institutional investors. Especially on shortsellers who bet on falling share prices and thus sometimes collect high sums. In the most recent example, hedge fund Melvin Capital was targeted, which ultimately lost 53 percent in January with its bet against GameStop – a major setback. In retrospect, it is said that small investors versus large investors. But the point that has apparently been neglected is this: “It’s not just short people on the long side here. There are big players who play both sides of GameStop,” said Thomas Peterffy, Chairman of Interactive Brokers Group the situation towards the WSJ together.
And how much the small investors ultimately get from their short-term gimmicks with the paper of the already battered video game company is anything but clear. At least the talk is big – and the stock exchange is once again perceived as a speculative playground.
GameStop shares are now well below the $ 483 high.
Finanzen.net editorial team
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