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- Bridgewater Associates and Renaissance Technologies parted ways on trendy stocks last quarter.
- Bridgewater, founded by Ray Dalio, sold its stakes in GameStop and AMC Entertainment.
- Jim Simons’ RenTech bolstered its bet on Elon Musk’s Tesla and bought Bed Bath & Beyond shares.
Two of the world’s leading hedge funds parted ways on some of the market’s trendiest names in the first quarter, suggesting they may disagree on whether there’s still money to be made with meme stocks.
Bridgewater Associates sold its stakes in GameStop and AMC Entertainment, while Renaissance Technologies boosted its bet on Tesla stock and snapped up Bed Bath & Beyond shares.
Bridgewater, founded by billionaire investor Ray Dalio, nearly tripled its GameStop and AMC holdings in the fourth quarter of 2022. It ended the year with $712,000 of GameStop shares and $261,000 of AMC shares.
However, neither of the meme stocks appear in the hedge fund’s latest portfolio update, suggesting it exited both holdings in the first quarter.
RenTech – founded by former MIT math professor and Cold War codebreaker Jim Simons – ramped up its bet on Elon Musk’s Tesla by 18% to 4 million shares last quarter. The purchases, coupled with a sharp surge in the electric-vehicle maker’s stock price, lifted the value of RenTech’s stake by 99% to $835 million as of March 31.
Notably, RenTech supercharged its Tesla bet in the fourth quarter of last year, growing it from 1,400 shares to 3.4 million. It first invested in Musk’s automaker in 2013, and owned the equivalent of 59 million shares in 2019 — a position worth about $10 billion today.
Simons’ fund also pounced on a meme stock last quarter. It bought nearly 1.8 million shares of BBBY — a stake worth $749,000 at the end of March.
BBBY’s stock price surged to over $35 at the height of the meme-stock boom in January 2021. But it plunged below $1 by February of this year, as the homeware retailer’s problems mounted. The company filed for bankruptcy in April, and its stock was delisted earlier this month.
RenTech is a quantitative hedge fund that constantly moves in and out of positions, and relies on algorithms to determine many of its trades. As a result, it may have sold its BBBY position well before the retailer’s collapse.
Bridgewater’s biggest single-stock positions at the end of March included Procter & Gamble ($735 million), Johnson & Johnson ($556 million), and more than $500 million worth of both Coca-Cola and PepsiCo shares. Its US stock portfolio was valued at $16.4 billion in total, down from $18.3 billion three months earlier.
The top holdings in RenTech’s $75 billion stock portfolio at the end of March included Novo-Nordisk ($1.7 billion), Amazon ($930 million), and Airbnb ($753 million). Notably, the firm slashed its Apple stake by more than 99%, from 7.1 million shares worth $922 million on December 31, to fewer than 10,000 shares worth $1.6 million three months later.
It’s worth emphasizing that quarterly portfolio updates only provide a snapshot of a fund’s holdings on a particular day. They also exclude non-stock assets, private and overseas investments, and shares sold short. As a result, they don’t always paint a full and accurate picture of a firm’s investments.
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