Bronte Capital, an investment management firm, published its “Amalthea Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Over the quarter the fund fell 5.97% whereas the globally diverse ACWI (in $A) dropped by 12.08%. The results are better than the market but are nonetheless unsatisfactory. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Bronte Capital Amalthea Fund mentioned GameStop Corp. (NYSE:GME) and explained its insights for the company. Founded in 1984, GameStop Corp. (NYSE:GME) is a Grapevine, Texas-based electronics retail company with a $10.5 billion market capitalization. GameStop Corp. (NYSE:GME) delivered a -6.85% return since the beginning of the year, while its 12-month returns are down by -8.57%. The stock closed at $138.22 per share on April 22, 2022.
Here is what Bronte Capital Amalthea Fund has to say about GameStop Corp. (NYSE:GME) in its Q1 2022 investor letter:
“Gamestop is a retailer of video games on DVD ROM trying hard (and maybe with some success) to reinvent itself as an alternative computer game distributor. The company raised enough money that bankruptcy is not an immediately likely outcome. (GME would have gone bankrupt except for the willingness of largely retail investors to provide them with much more cash.)
Both have bad financial results. Gamestop’s last financial results were terrible. And both stocks more than doubled very rapidly in March from market caps that were absurd to market caps that are more absurd. We are of course completely aware that they can double again and again after that. Their valuations are absurd but if you double the price they are not twice as absurd. They are just similarly disconnected from reality.
The reason we want to talk about them is that it is indicative of what is going on. Gamestop, the most meme of all stocks, announced a possible stock split and the stock, after market that day, traded up 17 percent. We could joke that every child knows that cutting a pizza into more slices yields more pizza. But in this market, not accepting that stock splits add value is a recipe for losing money.”
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Our calculations show that GameStop Corp. (NYSE:GME) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. GameStop Corp. (NYSE:GME) was in 14 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 9 funds in the previous quarter. GameStop Corp. (NYSE:GME) delivered a 29.95% return in the past 3 months.
In March 2022, we also shared another hedge fund’s views on GameStop Corp. (NYSE:GME) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
