GameStop's top investor during the wild Reddit-fueled trading frenzy has dumped nearly all of its stake

Evan Agostini/AP

  • Fidelity Investments sold all but 87 shares of its GameStop holdings in January, according to SEC filings.
  • Fidelity was once the largest shareholder in the video game retailers owning 13% of the company.
  • The company wasn’t the only institutional investor to cash in on the stock as the price surged.
  • Senvest Management also racked up nearly $700 million in profits on the trade, 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 filings posted on Jan. 29.

Fidelity had been the largest shareholder in GameStop at one time, owning 9.3 million shares, or 13% of the company, as of Dec. 31.

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

What began as a way for a group of traders to turn a profit quickly turned into a full-blown populist movement that saw retail traders on Reddit pitted against short-bias hedge funds like Melvin Capital.

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For a time, the Redditors had institutional investors by the collar as GameStop stock jumped more than 1,900%, from early January prices to a closing price of over $340 per share on Jan. 27.

Then brokerages stepped in and halted buying in the popular stock, and ever since retail traders have been on the retreat. GameStop shares traded at around $50 per share on Thursday.

It wasn’t just retail traders who profited off GameStop’s rise. Institutional funds like Senvest Management also got in on the action, racking up nearly $700 million in profits in the name.

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

However, those positions don’t account for the holdings of Fidelity’s sister company, Geode Capital, that manages all of Fidelity’s stock-index investments.

Tillinghast shared his reasoning behind owning smaller retail companies last year before the GameStop saga.

“If there is a vaccine for Covid-19, and smaller-cap companies, such as retailers and apparel companies, transition successfully to an optimal business model of both e-commerce and brick-and-mortar stores, it’s possible that many undervalued smaller-cap companies demonstrate exceptional earnings growth,” Tillinghast said, per WSJ.

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

GameStop traded down 3.81%, at $49.25, as of 1:38PM EST on Thursday. 

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