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Top Hedge Fund Bought 1 Million GameStop Shares Before Meme Stock’s 400% Jump

A world-renowned hedge fund revealed it created a stake in GameStop from scratch last quarter, making it a potential winner from the meme stock’s explosive jump this week.

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

GameStop stock rose more than 400% at its Tuesday high, briefly valuing RenTech’s stake at $65 million if it’s still intact. The stock fell from that high of nearly $65 to around $33 on Wednesday, still leaving the company worth more than $10 billion.

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

RenTech trusts algorithms to decide many of its trades, leading to sweeping changes in its stock portfolio every quarter. It was founded by Jim Simons, a renowned MIT mathematics professor and Cold War codebreaker who died Friday.

The quant fund made other striking changes to its holdings last quarter.

He cut his stake in Nvidia by almost two-thirds, from about 1.5 million shares to 551,000 shares, reducing the value of the position from about $767 million to less than $500 million. .

Rentech also reduced its stake in Tesla from 2.6 million shares worth $635 million to 1.8 million shares worth $316 million. Plus, it piled into another meme stock: AMC Entertainment. He increased his stake 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 closing on Tuesday.

The total value of the company’s stock portfolio remained almost flat at around $64 billion. Its top three holdings were Novo-Nordisk, Palantir and Meta at the end of March. Uber and Nvidia occupied second and third positions three months earlier.

It’s worth emphasizing that quarterly portfolio updates only provide a snapshot of a company’s holdings on a particular date and exclude short-sold stocks, private investments and overseas bets.

They don’t always paint a complete picture of the investment strategy behind choices, especially when algorithms dictate trades.

businessinsider

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