Arch Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. Through the first 11 months of the partnership, the fund was able to deliver a 3.53% return, compared to the S&P 500 Total Return Index, its core benchmark, which returned 30.02% for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Arch Capital, in its Q4 2021 investor letter, mentioned Take-Two Interactive Software, Inc. (NASDAQ: TTWO) and discussed its stance on the firm. Take-Two Interactive Software, Inc. is a New York, New York-based video game company with an $18.4 billion market capitalization. TTWO delivered a -9.83% return since the beginning of the year, while its 12-month returns are down by -22.63%. The stock closed at $160.25 per share on January 31, 2022.
Here is what Arch Capital has to say about Take-Two Interactive Software, Inc. in its Q4 2021 investor letter:
“Take-Two Interactive is an American video game publisher of franchises like Grand Theft Auto (GTA), Red Dead Redemption (RDR), and NBA 2K. It is currently one of the larger positions in the fund at an 8.3% allocation.
We are bullish on Take-Two because we believe the company has competitive advantages that will keep its franchises relevant for many years. First, its games have distinct network effects that keep it insulated from competitors. Multiplayer online games are only fun if others are also playing them, creating a winner-take-all effect that has specifically benefited GTA and NBA 2K over the last decade.
On top of network effects, Take-Two has decades of developmental expertise and over 5,000 developers across its divisions, giving it semi-strong economies of scale that insulate it from most competitors. Yes, large competitors like Microsoft or any mega-cap company could invest the dollars to get to this developer count, but it is impossible for a smaller studio to make games as immersive and at as quick of a pace as Take-Two does for its customers. They just don’t have the scale…” (Click here to see the full text)
Photo by Saad Chaudhry on Unsplash
Our calculations show that Take-Two Interactive Software, Inc. (NASDAQ: TTWO) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. TTWO was in 53 hedge fund portfolios at the end of the third quarter of 2021, compared to 55 funds in the previous quarter. Take-Two Interactive Software, Inc. (NASDAQ: TTWO) delivered a -12.88% return in the past 3 months.
In November 2021, we also shared another hedge fund’s views on TTWO in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
