A legendary hedge fund exited its GameStop bet before the meme stock's 550% spike

microsoft, a legendary hedge fund exited its gamestop bet before the meme stock's 550% spike

Paul Tudor Jones' hedge fund exited a GameStop position last quarter, ahead of the stock's epic surge. John Minchillo/AP

  • A storied hedge fund exited its GameStop wager last quarter, before the meme stock's epic surge.
  • Paul Tudor Jones' firm held call options on 44,300 shares and puts on 27,800 shares in December.
  • GameStop stock soared as much as 550% between late April and Tuesday, but has now pared those gains.

A legendary hedge fund exited its GameStop position before the meme stock surged as much as 550%.

Tudor Investment Corporation, founded and led by billionaire trader Paul Tudor Jones, held bullish call options on 44,300 GameStop shares at the end of December, SEC filings show. The options had a notional value of about $777,000.

Tudor Jones' firm also held bearish put options on 27,800 GameStop shares with a notional value of around $487,000. Neither position appeared in the hedge fund's first-quarter portfolio update on Wednesday, indicating it exited them by the end of March.

GameStop shares had sunk to around $10 by late April, but skyrocketed to an intraday high of $65 on Tuesday. The catalyst was the return of Keith "Roaring Kitty" Gill, a key figure in the GameStop saga, to social media. However, the stock fell nearly 20% on Wednesday and tumbled another 15% in premarket trading on Thursday.

This week's surge was reminiscent of January 2021, when GameStop's stock price went from under $5 to north of $80 on a split-adjusted basis. The buying frenzy was fueled by retail investors and whipped up on social media to squeeze short sellers, get rich fast, and have fun in the process.

Tudor Jones seemed skeptical of the episode during a CNBC interview in June 2021, but he wished those involved the best.

"I would probably not be pursuing the investment theses they are," he said. "I don't think I'm smart enough at this point in time to judge whether they're right or wrong. More power to them. I hope they succeed."

Tudor may have closed out its GameStop bet before the stock soared this week, but it's worth noting that quarterly portfolio updates only provide a snapshot of a fund's holdings on a certain date and exclude shares sold short, private investments, and overseas bets. As a result, they don't always paint a full picture of a firm's overall positioning.

Tudor runs a sprawling portfolio with well over 2,000 holdings, so it's not hugely surprising that it counted GameStop among them in the fourth quarter.

After all, Tudor has owned GameStop shares in at least 40 different quarters since the company went public in 2002, SEC filings show.

It was also not a big position compared with its direct stakes in Splunk and Nvidia, worth $254 million and $65 million, respectively, in December.

Tudor Jones' firm trades actively too, meaning it could easily have bought or sold GameStop shares or options last quarter and even during this week's frenzy.

Regardless, it's notable that Tudor dropped its GameStop wager before the company's meteoric rise and dramatic fall this week.

In contrast, Renaissance Technologies, a quant fund founded by the late Jim Simons, amassed 1 million GameStop shares from scratch last quarter.

Tudor didn't immediately respond to a request for comment from Business Insider.

If you enjoyed this story, be sure to follow Business Insider on Microsoft Start.

OTHER NEWS

24 minutes ago

Why Did the Plane Crash in Cast Away?

24 minutes ago

Hamas rocket attack sets off air raid sirens in Tel Aviv

24 minutes ago

UCLA police chief reassigned following criticism over handling of campus demonstrations

24 minutes ago

Canon empowers the region's production and broadcasting industry with its 'See No Limits' campaign

24 minutes ago

If I’d invested £5k in red hot BAE Systems shares 5 years ago here’s what I’d have today

24 minutes ago

Down 8% in a month! The BP share price is screaming ‘buy, buy, buy’ at me right now

24 minutes ago

The test of time facing Pat Cummins's team ahead of packed two years of cricket

24 minutes ago

Eamonn Holmes and Ruth Langsford look stony-faced as they leave their last public outing separately - before news of their divorce plans emerged following 14 years of marriage

29 minutes ago

Locked out of the US housing market? Here’s how to win ‘revenge’ in the meantime

30 minutes ago

Rivian R1T Needlessly Totaled By Insurer Over '99 Cents of Studs'

30 minutes ago

Family confirms death of PGA Tour's Grayson Murray was a suicide: 'We know he rests peacefully now'

30 minutes ago

Tennis-Alcaraz mauls Wolf to reach French Open second round

30 minutes ago

Donalds responds to MSNBC’s Joy Reid: ‘Crabs in a barrel’

30 minutes ago

Republican Says There's 'Probably a Laundry List' of 'Scumbags' in GOP

30 minutes ago

Sneaker Maker Golden Goose Is Said to Kick Off Milan IPO Soon

31 minutes ago

Southampton promoted to Premier League after beating Leeds in play-off final

31 minutes ago

No one wants kids vaping. But is Labor criminalising adults who flout the crackdown?

31 minutes ago

Max Gawn dominant as Demons crush Saints

31 minutes ago

PGA Tour player Grayson Murray died by suicide, says family

31 minutes ago

Djokovic optimistic despite lowered expectations at Roland Garros

31 minutes ago

Pogacar wins Giro d'Italia on debut, as Merlier wins final stage

31 minutes ago

RAF pilot killed in Spitfire crash at Battle of Britain event is named

33 minutes ago

GCC-Africa trade ties set for a major boost

33 minutes ago

Leah Washington and Joe Pugh's journey from Alton Towers horror accident to dream wedding

33 minutes ago

Ferrari’s Leclerc wins F1 Monaco GP, early crash takes out Perez and others

33 minutes ago

Yemen’s Houthis freed over 100 war prisoners, the Red Cross says

33 minutes ago

‘It could be the end of the road for a few of us’ - Henry Shefflin to reassess time as Galway manager

33 minutes ago

Megyn Kelly and Bill Maher get into awkward clash over her Trump support: 'You keep saying I'm nuts!'

34 minutes ago

Norway hands over papers for diplomatic recognition to the Palestinian prime minister

34 minutes ago

Trudeau will mark 80th anniversary of D-day at Juno Beach ceremony in France

35 minutes ago

Indianapolis 500 weather updates: Start of 2024 race delayed by thunderstorms

36 minutes ago

How to help tornado victims in North Texas

36 minutes ago

BookTok star Jack Edwards: ‘I got to interview the Gruffalo last year. They say don’t meet your idols’

36 minutes ago

RDR 2's Micah and GTA 5's Trevor Are As Similar As They Are Different

36 minutes ago

Soccer-Crespo hails underdogs Al-Ain after Asian Champions League success

36 minutes ago

Pilot, 6 passengers on skydiving flight jump before small plane crashes in Missouri hayfield

36 minutes ago

Lizzo is left stunned by new South Park obesity episode that mocks her weight

36 minutes ago

Raye lights up the stage at Radio 1's Big Weekend as she admits she 'didn't think she was ready' to perform to thousands of fans

40 minutes ago

Chris Jordan thrilled to see fit-again Jofra Archer back in an England shirt

40 minutes ago

Is Labour trying to rig election system with plans for votes at 16?

Kênh khám phá trải nghiệm của giới trẻ, thế giới du lịch