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RenTech Fund Doubles Tesla Stock Bet, Boosts GameStop Stake by 118 Times

  • Jim Simons’ RenTech doubled its Tesla stake, and hugely increased its GameStop wager last quarter.
  • The hedge fund held $1.7 billion of Tesla stock, making Elon Musk’s company its number-two position.
  • RenTech boosted its GameStop bet by 118 times, giving it a $51 million stake in the retailer.

Renaissance Technologies more than doubled its Tesla stake, supercharged its GameStop bet, and slashed its AMC Entertainment holdings in the first quarter of this year, Securities and Exchange Commission filings show.

RenTech, one of the largest and best-performing hedge funds in history, was founded by Jim Simons, a former NSA codebreaker and MIT math professor. The quantitative fund relies on algorithms to determine many of its trades, leading to substantial changes to its portfolio each quarter.

Simons’ fund raised its Tesla position by 109%, from about 743,000 shares to 1.6 million. The value of the wager surged from $786,000 to $1.7 billion, aided by a 2% increase in Tesla’s stock price in the period. Elon Musk’s electric-vehicle company is now RenTech’s number-two holding, second only to its $2 billion stake in Danish pharma Novo-Nordisk.

RenTech also boosted its GameStop holdings 118-fold last quarter, from 2,600 shares to 307,000, and the video-game retailer’s stock price rose 12% in the period. The upshot was the value of the position surged from below $400,000 to $51 million, catapulting it into the fund’s 350 largest holdings. It was number 3,210 out of 3,860 positions at the end of December.

In contrast, the quant fund slashed its AMC stake by 61% to 1.8 million shares last quarter, and the cinema-chain’s stock price slid 9% in the period. As a result, RenTech’s position plunged in value from $127 million to $45 million, tumbling from its 135th-largest holding to 379th on the list.

The overall value of RenTech’s US stock portfolio rose by about 6% to $85 billion last quarter.

Rentech’s latest portfolio update suggests it regained some of its bullishness on Tesla last quarter. It quadrupled its stake in the automaker in the third quarter of 2021, but trimmed that position by 9% over the next three months.

Meanwhile, the fund appears to have soured on AMC, after boosting its position by nine-fold in the nine months to December 31. It seems to have warmed up to GameStop again, after exiting the stock in the third quarter of last year.

RenTech owned as many as 5.1 million GameStop shares in mid-2019. That stake would have briefly been worth nearly $2.5 billion on paper at the height of the short squeeze on the meme stock in January 2021.

Read more: We interviewed the CEOs of 4 of Warren Buffett’s most iconic businesses. Here are their 16 best quotes about the investor, Berkshire Hathaway’s ownership, and navigating the pandemic and inflation.

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