GAME$TOP & GO!
Hedgie jumped in before 400% meme rally
One of the top hedge funds in the world bought a sizable stake in GameStop just a few weeks before shares surged as much as 400% as part of the latest “meme stock” rally, a regulatory filing showed Wednesday.
Renaissance Technologies, the quant firm founded by legendary investor Jim Simons, who died last week, bought just over 1 million shares of GameStop during the quarter ending in March, according to the securities filing.
The struggling videogame retailer’s stock spiked 400% at its Tuesday high — boosted mainly by the return of “Roaring Kitty.”
The retail day trader, whose real name is Keith Gill, played a leading role in the 2021 meme-stock frenzy — when mom-and-pop investors poured into firms like GameStop and AMC to squeeze short-sellers.
Assuming no changes in the fund’s position, the GameStop stake would be worth nearly $33.5 million through Wednesday — up from a value of about $13 million as of the end of last quarter.
RenTech also had increased its stake in the floundering movie theater chain AMC by 78% to about 8.7 million shares during the first quarter, according to the filing.
That position was worth more than $46 million as of Wednesday trading — up from about $32 million last quarter.
On Wednesday, the meme-stock rally fizzled, with GameStop and AMC plunging by 19% and 20%, respectively.
Shares of GameStop closed at $39.55 Wednesday. AMC finished at $5.48.
Nonetheless, their unexpected rise this week could still give RenTech a massive windfall.
The firm uses algorithms to make lightning-quick trades, which can result in major changes to its stock portfolio each quarter.
RenTech’s overall stock portfolio had a value of $64 billion, according to its filing, which was first reported by Business Insider. The firm’s top three holdings were Novo Nordisk, Palantir and Meta at the end of March.
Simons, the market guru and mathematician, died last Friday at age 86.
Gill, who also goes by the moniker “DeepF--kingValue” on Reddit, reignited interest in the struggling companies after he shared a series of memes on X this week.
The posts, his first public interaction since 2021, included a meme of a videogame player leaning forward in his chair and a series of movie clips from popular TV shows and movies such as Marvel’s “Avengers” and “Breaking Bad.”
The X account @TheRoaringKitty continued posting movie clips on Wednesday, but Gill has yet to personally reveal his next move.
Finance experts said the current meme-stock rally may have already run its course.
Not like last time
“This time it is different,” Ben Laidler, global markets strategist at eToro, told Bloomberg. “The pandemic lockdown is over. Excess consumer savings are largely long spent. Short positions in these stocks are much smaller though not small. Interest rates are much higher.”
GameStop and AMC shares were among the top trades among investors Monday and Tuesday following Roaring Kitty’s return, according to data from Vanda Research cited by Bloomberg.
As in 2021, experts said the spike in interest was disconnected from fundamentals, since neither company has posted strong financial results in recent quarters.
“The only environment where GameStop and AMC and the likes of BlackBerry and other, I would say, ‘trash’ stocks would succeed is in an environment where anything and everything can go higher,” Longbow Asset Management CEO Jake Dollarhide told The Post this week.