This hedge fund made $ 700 million in the GameStop frenzy

The entity began investing in GameStop in September of last year and by October 2020, it owned more than 5% of the company.

The frenzy The market share driven by Reddit, which spiked GameStop’s share price last month, has often been described as a perfect example of the triumph of amateurs over professionals. But not everyone on Wall Street was betting against the games retailer.

Senvest Management, a New York-based hedge fund, began investing in GameStop in September of last year, before Reddit’s war on Wall Street began. And by October 2020, he owned more than 5% of the company, he reports. The Wall Street Journal.

GameStop plummets 50%, with a cumulative drop of 65% in two days

Richard Mashaal and Brian Gonick, fund executives, paid less than $ 10 for most of their shares from GameStop, and after they peaked at more than $ 400, they were already making a profit of nearly $ 700 million, one of the great fortunes of that January market frenzy.

Senvest’s interest in GameStop was piqued after a compelling presentation from its new CEO, George Sherman, in January last year and the involvement of Chewy founder and investor Ryan Cohen.

GameStop is now Senvest’s most profitable investment per dollars earned and its internal rate of return, a performance metric that takes into account the duration of an investment.

Many hedge funds have been hit hard by the recent market frenzy. Investment firm Melvin Capital, one of the worst hit with losses of 53% in January, finally secured a $ 2.8 billion bailout from other hedge funds.

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