Ray Dalio's hedge fund nearly tripled its GameStop and AMC bets last quarter, while Bill Miller dumped Bed Bath & Beyond stock
- Bridgewater Associates, founded by Ray Dalio, bet on meme stocks GameStop and AMC last quarter.
- The hedge fund nearly tripled its stakes in the video-game retailer and the movie-theater chain.
Meme stocks have divided markets, with some investors dismissing them as silly and certain losers, and others embracing them as undervalued businesses with large, passionate fanbases.
Hedge funds linked to billionaire investors Ray Dalio and Bill Miller appear to have parted ways on meme stocks last quarter, Securities and Exchange Commission filings revealed on Monday.
Bridgewater Associates — which counts Dalio as its founder and mentor to its co-chief investors — boosted its bets on GameStop and AMC Entertainment, while Miller Value Partners exited its Bed Bath & Beyond wager.
Bridgewater nearly tripled its stake in GameStop to almost 39,000 shares. But the holding only doubled in value to $712,000, thanks to a 28% slump in the video-game retailer's stock in the period.
The hedge fund also nearly tripled the size of its AMC stake to around 64,000 shares, lifting the worth of the wager by 74% to $261,000.
Meanwhile, Miller's fund sold the remainder of its Bed Bath & Beyond position. It owned 136,000 shares worth $677,000 at the end of September.
Adjusted for its stock split last July, GameStop's shares skyrocketed from under $5 to north of $80 in January 2021, as retail investors rushed to support the ailing company and squeeze the hedge funds shorting the stock.
Similarly, AMC shares surged from about $2 to over $59 during the first six months of 2021.
Bed Bath & Beyond shares also soared from under $4 in April 2020, to over $35 by January 2021.
All three stocks have given up most of their gains since then.
It's worth emphasizing that meme stocks make up a tiny fraction of Bridgewater's and MVP's billion-dollar portfolios. Yet it's still notable that both funds have seen fit to buy into them in recent years.