While retail was “sticking it to the suits” – the actual suits at hedge fund Senvest Management were about to net a cool $700 million on GameStop’s run higher. Why? Because GME was the largest Senvest holding as of Oct 7, an oddity considering many within the hedge fund world at the time viewed it as a potential bankruptcy candidate – hardly a prudent move from a fiduciary standpoint, unless Senvest had a plan… and boy did it have a plan.
But let’s back up.
Senvest principles, Richard Mashaal and Brian Gonick, started buying GSE stock equity in September, the Wall Street Journal report reveals, just weeks before they had accumulated a massive 3.6 million shares making Gamestop the fund’s largest holding. Mashaal told the Journal: “When it started its march, we thought, something’s percolating here. But we had no idea how crazy this thing was going to get.”
In retrospect, he just might have had an idea.
GameStop turned into the firm’s most profitable ever investment by dollars earned and IRR. Senvest’s fund has ballooned from $1.6 billion to $2.4 billion as a result of GameStop’s move and, for the month of January, the fund was up 38.4%. Gamestop is also the reason why Senvest is currently the top performing fund tracked by HSBC’s popular Hedge Weekly report. – READ MORE
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