The biggest winner of the Gamestop event was another… 780 billion money cushion

US stock game stop, which was evaluated as a battleground among individual investors and short selling institutional investors. However, foreign media are evaluating that it was a war of’institution vs. individual vs. institution’ rather than’individual vs. institution. Hedge funds, which also invested short selling in GameStop, suffered significant losses, but another hedge fund took the opposite strategy and sat on a money cushion.

The Wall Street Journal (WSJ) reported on the 3rd (local time) that Senvest Management, an American hedge fund, is one of the most paid investors in GameStop investment. The money generated by Senvest Management through GameStop investment is $700 million (about 780 billion won). On the same day, according to the Financial Times (FT), Morgan Stanley’s Institutional Inception fund, which also invested in GameStop, surpassed 30% in January, and ranked first in the U.S. mutual fund’s yield (based on Morningstar). did. The two institutional investors who became the winners of the GameStop case both took a buy strategy rather than a short sale, and because they invested last year, they have a common point that the investment unit price is very low compared to the recent stock price.

US hedge fund with experience in short selling predicts the possibility of a game stop short squeeze

Senbest Management has been paying attention to GameStop since January of last year. At the time, some analysts at Wall Street were pessimistic about the company’s future by suggesting a gamestop rating as a sell. Senvest Management identified that major hedge funds such as Melvin Capital are making short-selling investments in GameStop through disclosure analysis. However, Senvest Management believes that a short squeeze (a phenomenon in which short-selling investors repurchase stocks at a higher price to reduce losses when stock prices rise) is possible if they buy GameStop, considering their past short-selling experience. The premise was that if GameStop’s business structure is currently switched from offline to online, there will be room for upside in stock prices and thus can withstand short selling attacks.

Senbest Management had bought GameStop shares at an average unit price of less than $10 per share until October of last year, and placed a bet that exceeded 5% in terms of total ownership. And as a result, it was a great success.

WSJ quoted Wall Street fund managers as saying that the individual’s role in the GameStop case was less than expected. It is an analysis that the volume of participation of institutional investors was very large when looking at the volume of gamestop stocks and options. Institutional investors with high returns have appeared in AMC and Blackberry, which were expected to see a surge in stock prices similar to GameStop. However, it seems clear that Reddit’s individual investors provided upside engines such as GameStop. Senbest Management said in an interview with WSJ that “the future wave of (GameStop incident) is not over.” This means that a new trend has emerged in which institutional investors are keenly aware of the trends of individual investors.

Morgan Stanley Fund ranks first in return due to low investment costs

The investment case of Morgan Stanley’s Inception Fund is similar to Senvest Management. As of the end of September of last year, the Inception Fund announced that it had 340,000 shares of GameStop. The investment unit price of the Inception Fund is also estimated to be at the level of Senvest Management. It was around the time that Ryan Cohen, the founder of Chewy, a companion animal goods sales company, bought a stake in GameStop, and a trailer came out stating that GameStop would become a battlefield for activist investors.

As a result of the GameStop investment, Morgan Stanley’s Inception Fund surpassed 30% in return in January, making the best performance among American mutual funds last month. It is not known how recently the Inception Fund has sold GameStop shares.

Reporter Gowoon Lee [email protected]

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