Is there a hedge fund that made profits in the gamestop rampage?… “Buy under $10”

Input 2021.02.04 13:08

There are reports of hedge funds that have benefited from the GameStop war between US short selling institutions and private investors.

According to the Wall Street Journal (WSJ) on the 3rd (local time), Senvest Asset Management announced that it recently made a profit of $700 million (approximately 78.05 billion won) by buying GameStop stocks from September of last year, before the buying craze broke out. Senvest is said to own more than 5% of GameStop as of the end of October last year. Gamestop’s stock price was less than $10 at this time.

Senvest hedge fund managers Richard Marshall and Brian Gonick said they were interested in hearing a new CEO’s announcement at a GameStop investment briefing in January last year. He said that there was a possibility of growth if it persists until the next generation of video game consoles are released.

Marshall and Gonick also noted that Ryan Cohen, then GameStop’s largest individual investor, had a strategic discussion with GameStop management. It was analyzed that if Cohen can help change the nature of GameStop from offline to online, the future stock price will inevitably rise. Cohen later joined GameStop’s board of directors.

They also positively interpreted the fact that the short selling force jumped into the game stop. If the short-selling force bets on a decline in the stock price, a short squeeze could occur when the stock price rises in the future. Short squeeze is when short-selling investors buy stocks at a higher price than before to prevent further losses when the stock price rises, which is why the stock price rises further as demand for purchase increases.

Finally, Marshall and Gonik changed their investment policy through this gamestop riot. “In the future, we will review whether individual investors are discussing the stock online before investing.” On this day, GameStop stock price ended at $92.41, up 2.68% from the battlefield.