Strength or luck? Before retail investors forced a short squeeze, this fund had already "ambushed" AMC and GME
While retail investors in the United States are still fighting fiercely with short sellers, the king of quantitative hedge funds, Renaissance Technologies, had already bought 1 million shares of GME in the first quarter of this year, and further increased its position by 3.8 million shares in AMC, waiting to cast the net and count the money
Leading figure Keith Gill made a high-profile return this week, leading retail investors to stage a dramatic short squeeze on meme stocks. Surprisingly, it was revealed that a hedge fund had already bought shares of GameStop and AMC before the return of the leading figure.
That hedge fund is Renaissance Technologies, and its founder is the late king of quantitative trading, Jim Simmons.
According to regulatory filings, Renaissance Technologies increased its holdings by 3.82 million shares of AMC stock in the first quarter of 2024, and also purchased 1 million shares of GameStop.
You might think that Renaissance Technologies made a fortune as GameStop and AMC surged following the return of the leading figure, seemingly predicting his return. However, this is not certain because the hedge fund's position data is only updated until the end of March. Whether Renaissance Technologies changed its holdings in April and May is unknown, and the fund has declined to comment.
After all, quantitative funds hold positions for varying lengths of time, ranging from a few days to a few seconds. It's possible that Renaissance Technologies quietly adjusted its positions in the past month and a half.
Marco Iachini, Senior Vice President of Vanda Research, said, "Quantitative hedge funds are very powerful nowadays. We believe they may have participated in the retail investors' short squeeze trades, and they likely exited the market while retail investors were still enjoying the surge."
Renaissance Technologies is not the only hedge fund that positioned itself in meme stocks early in the year. Balyasny Asset Management also increased its holdings of AMC and GME in the first quarter. On the other hand, Schonfeld Strategic and ExodusPoint Asset Management cleared their GME positions, while DE Shaw directly liquidated its GME and AMC holdings in the first quarter, suffering a double blow and potentially losing billions.
With the influence of the leading figure's return, the stock prices of GME and AMC both surged by over 100% earlier this week. Although in the past few days, GME and other meme stocks have fallen again, GME is still trading near $27, a high not seen in nearly two years, significantly higher than the overall trading level of around $10 in the first quarter.
AMC, on the other hand, has returned to around $4.6, similar to the overall trading price in the first quarter.
This also means that Renaissance Technologies, which bought GME and AMC in the first quarter, has made a real profit relying on GME, whether it has run or not. With both strength and luck, it is definitely the chosen one