GameStop’s Top Investor During Savage Reddit-Fueled Trading Frenzy Has Ditched Almost All of Its Stake

• Fidelity Investments sold all but 87 of GameStop’s shares in January, according to documents filed by the SEC.
• Fidelity was once the largest shareholder of video game retailers holding 13% of the company.
• The company was not the only institutional investor profiting from the stock as the price soared.
• Senvest Management also racked up nearly $ 700 million in trading profit, the Wall Street Journal reported.
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Fidelity Investments cashed in its GameStop shares amid the stock’s meteoric rise in January. The company sold all but 87 shares according to regulatory documents released on January 29.

Fidelity was GameStop’s largest shareholder at one point, owning 9.3 million shares, or 13% of the company, as of December 31.

Shares of the video game retailer soared in January after the company became the target of traders on Reddit’s WallStreetBets forum looking to initiate a short-squeeze on heavily shorted stocks.

What started out as a way for a group of traders to make a profit quickly turned into a full-fledged populist movement that has seen retail traders on Reddit pit short-biased hedge funds like Melvin Capital.

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For a while, Redditors had institutional investors at their necks as GameStop stock jumped more than 1,900%, from prices in early January to a closing price of over $ 340 per share on January 27.

Then the brokerage houses stepped in and stopped buying popular stocks, and retail traders have since retreated. Shares of GameStop traded at around $ 50 per share on Thursday.

It’s not just traders who have benefited from the rise of GameStop. Institutional funds like Senvest Management also participated in the action, racking up nearly $ 700 million in profits in the name.

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Almost all of Fidelity’s holdings were in two mutual funds, the Fidelity Low-Priced Stock Fund and the Fidelity Series Intrinsic Opportunities Fund, both managed by Joel Tillinghast.

However, these positions do not take into account the holdings of Fidelity’s sister company, Geode Capital, which manages all of Fidelity’s index investments.

Tillinghast shared his reasoning behind owning small retail businesses last year before the GameStop saga.

“If there is a vaccine for Covid-19 and smaller-cap businesses, such as retailers and apparel companies, successfully transition to an optimal business model of e-commerce and physical stores, it is possible that many smaller dumped-cap companies are demonstrating exceptional earnings growth, ”said Tillinghast, per WSJ.

Although Tillinghast’s theories did not come true, his funds were still able to capitalize on their GameStop investments.

GameStop was down 3.81%, to $ 49.25, Thursday at 1:38 p.m. EST.