Last year shares of GameStop and AMC Entertainment were on a wild ride. Just one year ago in January, GameStop’s stock saw over a 2,300% increase in two weeks, and AMC Entertainment’s stock saw an 800% increase in two weeks. Considering GameStop was a struggling company, and AMC Entertainment was facing the harsh repercussions of the pandemic, many investors were surprised to see such massive growth in the companies.
The rise came as members of the infamous subreddit WallStreetBets created hundreds of posts telling investors to buy the two stocks. The move was just as much of a revolution of power for the commercial investor as it was a way to profit. Most Hedge Funds involved in the trade, such as Melvin Capital, suffered in a short squeeze. On the other hand, investors, made up of regular folk, benefited from the trades. But with so much time passing, some new players from the event are emerging, and revealing their bounty. For example, one Hedge Fund that managed to benefit was Senvest, a Hedge Fund headquartered in in Montreal, Canada. The Hedge Fund took a perfectly timed position on GameStop, buying it just under $10 and selling when the meme stock peaked. But how did they time it? Well, they went off Elon Musk’s “Gamestonk” tweet which sent the stock soaring to a price of $347.51 a share. The trade netted $700 million dollars in profit and was the firm’s single best trade in its 25 years existence. What do you think about the trade? And will 2022 see another meme stock?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
Originally published at https://invstr.com on January 28, 2022.