In this article, we discuss the 5 hedge funds that profited from Reddit’s meme stock craze. If you want to read our detailed analysis of these hedge funds, go directly to the 10 Hedge Funds that Profited from Reddit’s Meme Stock Craze.
5. Maverick Capital
Estimated Gain From Meme Stock Craze: 1,600%
Maverick Capital is ranked fifth on our list of 10 hedge funds that profited from Reddit’s meme stock craze. The fund is managed by Lee Ainslie and has a portfolio value of over $10.8 billion. It is based in Texas and concentrates on investments related to the technology and services sectors. Although the firm registered record losses during the GameStop Corp. (NYSE: GME) saga in January, it also made a small profit during the short squeeze. News agency Reuters reports that the firm bought a stake in GameStop Corp. (NYSE: GME) in December 2020 and made gains of 1,600% on the investment within the next few weeks.
Lee Ainslie of Maverick Capital
Maverick Capital holds a large stake in Facebook, Inc. (NASDAQ: FB), the parent company of social platforms like Facebook, Instagram, and WhatsApp. At the end of the first quarter of 2021, 257 hedge funds in the database of Insider Monkey held stakes worth $40 billion in Facebook, Inc. (NASDAQ: FB), up from 242 in the preceding quarter worth $38 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Facebook, Inc. (NASDAQ: FB) was one of them. Here is what the fund said:
“We continued to keep our learnings from 2020 in mind during the quarter as we sought to increase the up capture of the portfolio. We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks, including Facebook, while trimming our weighting to stable names, which now represent 47% of the portfolio. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”
4. Ensign Peak Advisors
Estimated Gain From Meme Stock Craze: $7.6 Million
Ensign Peak Advisors is an investment firm run from Utah. It is placed fourth on our list of 10 hedge funds that profited from Reddit’s meme stock craze. The firm has a portfolio value of over $46 billion with investments in technology, healthcare, and industrial goods. In May, news publication Business Insider reported that the fund bought 46,000 shares in GameStop Corp. (NYSE: GME) at the end of the fourth quarter of 2020 that was worth $900,000. In the weeks ahead, this stake became worth more than $8.5 million.
One of the top investments of Ensign Peak Advisors is Microsoft Corporation (NASDAQ: MSFT), the software company that owns the popular operating platform Windows. Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Microsoft Corporation (NASDAQ: MSFT) with 23.9 million shares worth more than $5.6 billion.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ: MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
3. Mudrick Capital Management
Estimated Gain From Meme Stock Craze: $200 Million
Mudrick Capital Management is an investment firm headquartered in New York. It has a portfolio value of over $882 million with investments concentrated in the technology and consumer goods sectors. It is ranked third on our list of 10 hedge funds that profited from Reddit’s meme stock craze. The fund is managed by Jason Mudrick and made around $200 million through gains on debt and equity of AMC Entertainment Holdings, Inc. (NYSE: AMC), one of the stocks at the centre of the meme stock rallies earlier this year. According to a report in news publication Bloomberg, the fund profited from debt holdings and selling out-of-the-money call options.
One of the biggest holdings of Mudrick Capital Management is Aurora Cannabis Inc. (NASDAQ: ACB), a licensed cannabis producer headquartered in Canada. At the end of the first quarter of 2021, 12 hedge funds in the database of Insider Monkey held stakes worth $488 million in Aurora Cannabis Inc. (NASDAQ: ACB), up from 10 in the preceding quarter worth $146 million.
2. Blackrock Group Ltd
Estimated Gain From Meme Stock Craze: $2.4 Billion
Blackrock Group Ltd is placed second on our list of 10 hedge funds that profited from Reddit’s meme stock craze. The fund is based in London and has a portfolio value of over $210 billion. The fund concentrates on investments in the finance, healthcare, and technology markets. Regulatory filings showed at the end of last year that Blackrock owned 9.3 million shares in GameStop Corp. (NYSE: GME) worth around $173 million. As the video game retailer went on a record rally that saw share price rise by 700% in the next few weeks, this stake became worth over $2.5 billion. News agency Reuters reports that the fund made $2.4 billion in the process.
A top holding of Blackrock Group Ltd is Apple Inc. (NASDAQ: AAPL), a technology company based in California. At the end of the first quarter of 2021, 127 hedge funds in the database of Insider Monkey held stakes worth $130 billion in Apple Inc. (NASDAQ: AAPL), down from 146 in the preceding quarter worth $142 billion.
In its Q1 2021 investor letter, Distillate Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ: AAPL) was one of them. Here is what the fund said:
“Apple is an even more notable situation and one that highlights our free cash valuation methodology and bears further discussion given its Q3 ‘20 sale from our strategy. For an extended period, Apple was extraordinarily inexpensive on a free cash flow basis and was the largest position in our strategy, exceeding 5% of the portfolio.”
1. Senvest Management LLC
Estimated Gain From Meme Stock Craze: $700 Million
Senvest Management LLC is a hedge fund based in New York. The portfolio value of the fund is over $3 billion, according to the latest filings. The fund focuses on investments in the technology and services sectors of the economy. In January this year, at the height of the GameStop Corp. (NYSE: GME) short squeeze, the fund was the fourth-largest shareholder in the video game retailer, owning about 5 million shares. It sold the stake, according to a report in The Wall Street Journal, and gained close to 40%, making a profit of $700 million. The fund is ranked first on our list of 10 hedge funds that profited from Reddit’s meme stock craze.
One of the top holdings of Senvest Management LLC is Marriott International, Inc. (NASDAQ: MAR), the company that owns and runs hotel, residential, and timeshare properties across the world. At the end of the first quarter of 2021, 58 hedge funds in the database of Insider Monkey held stakes worth $3 billion in Marriott International, Inc. (NASDAQ: MAR), the same as in the previous quarter worth $3.4 billion.
In its Q1 2021 investor letter, LRT Capital Management, an asset management firm, highlighted a few stocks and Marriott International, Inc. (NASDAQ: MAR) was one of them. Here is what the fund said:
“We are also long shares of Marriott International, Inc. (MAR). Our investment thesis with respect to Marriott is essentially the same as with Hilton: excellent business economics, a consolidating industry and a good track record of capital allocation. Shares of Marriot are up 12.39% year-to-date.”
You can also take a peek at 10 Reddit’s WallStreetBets Meme Stocks Hedge Funds are Piling Into and 10 Biggest Hedge Fund Casualties of Reddit WallStreetBets’ Short Squeezes.
