Mark Cuban Stock Portfolio: 5 Stocks To Consider

4. GameStop Corp. (NYSE:GME)

Number of Hedge Fund Holders: 18 

Despite being one of the most volatile stocks on the market in the past few months, GameStop Corp. (NYSE:GME) has a year-to-date return of over 880%. The company has emerged more or less unscathed from multiple short-selling attempts this year. The firm recently announced that it would be hiring 500 people at a new customer care center in Florida that would be operational by the end of the year. 

In February, Cuban said that WallStreetBets, one of the most influential platforms on Reddit, was changing how the market functioned, advising users on the platform to hold onto  GameStop Corp. (NYSE:GME) shares to benefit the firm in the long term.  

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in GameStop Corp. (NYSE:GME) with 2.7 million shares worth more than $595 million.  

In its Q1 2021 investor letter, Rhizome Partners, an asset management firm, highlighted a few stocks and GameStop Corp. (NYSE:GME) was one of them. Here is what the fund said:

“The first quarter saw some bizarre market reactions. Game Stop is a heavily shorted legacy video game retailer that saw its stock price rise from $17 to a peak of $483 within a month. It appears that retail investors on a Reddit.com forum called WallStreetBets used memes to create a viral feedback loop of forced buying. Game Stop reached $20 billion in market cap and had more daily trading volume than Apple at one point. The Game Stop short squeeze became a black swan event for the short sellers. Large hedge funds such as Melvin Capital suffered 50% losses during a short period and required emergency capital injections that resulted in costly dilution. Shorting is difficult and introduces a risk of ruin. This is especially true in situations where a large percentage of the float is shorted. We want to remind you that we hedge our portfolio via index puts, sector puts, and sometimes buying puts directly in our own portfolio companies. However, we rarely short because 1) we are not good at it 2) the potential for brain damage is too high and 3) we want to avoid the risk of ruin.”