5 Stocks that Tripled in 2021

2. GameStop Corp. (NYSE:GME)

Number of Hedge Fund Holders: 9 

Year-To-Date Gain: 1,213%  

GameStop Corp. (NYSE:GME) is a specialty retailer of games and entertainment products. The stock has rallied amid an increase in video game sales ahead of holiday season and announcements about movements of the company into the NFT and crypto markets. 

GameStop Corp. (NYSE:GME) was involved in the most famous short squeeze of the year in January as the hedge funds suffered losses worth billions in trying to cover their short positions after the share price skyrocketed amid interest from retail investors. 

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in GameStop Corp. (NYSE:GME) with 2.1 million shares worth more than $373 million.  

In its Q1 2021 investor letter, Rhizome Partners, an asset management firm, highlighted a few stocks and GameStop Corp. (NYSE:GME) was one of them. Here is what the fund said:

“The first quarter saw some bizarre market reactions. Game Stop is a heavily shorted legacy video game retailer that saw its stock price rise from $17 to a peak of $483 within a month. It appears that retail investors on a Reddit.com forum called WallStreetBets used memes to create a viral feedback loop of forced buying. Game Stop reached $20 billion in market cap and had more daily trading volume than Apple at one point. The Game Stop short squeeze became a black swan event for the short sellers. Large hedge funds such as Melvin Capital suffered 50% losses during a short period and required emergency capital injections that resulted in costly dilution. Shorting is difficult and introduces a risk of ruin. This is especially true in situations where a large percentage of the float is shorted. We want to remind you that we hedge our portfolio via index puts, sector puts, and sometimes buying puts directly in our own portfolio companies. However, we rarely short because 1) we are not good at it 2) the potential for brain damage is too high and 3) we want to avoid the risk of ruin.”