The South Korean hedge fund that made a bold bet for GameStop Corp. almost a year ago it becomes less bullish in the actions of the American video game retailer after a seemingly endless rally he mistaken many short sellers.
Kim Doo-yong, CEO of Must Asset Management, said the high volatility of the shares and the increase of more than ten times since its the last interview with Bloomberg in March 2020 is motivating his less rosy vision.
The Seoul-based hedge fund, which has 602 billion won ($ 546 million) in assets under management, had a 4.7% stake in GameStop in April 2020, according to Bloomberg data based on a presentation. This made the Korean fund one of the largest investors in the Grapevine, Texas-based company.
Kim declined to comment on the fund’s current shareholding in U.S. equities, a favorite of retail investors who have become increasingly influential in markets during the pandemic. GameStop shares rose in a wave of short, daily trades after Ryan Cohen, activist investor and co-founder of online pet retail Chewy Inc., he joined his council on 11 January.
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“We’ve become less bullish and we’ve become more neutral on GameStop,” Kim said in an interview with Bloomberg on Monday. “This stock will remain very volatile and unpredictable in the short term.”
In March last year, Kim told Bloomberg that, against a bearish tide of analytics, GameStop is “the only place” where potential customers can try out corporate games in person. He still believes in business.
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“We’re still very positive about GameStop’s new direction,” Kim said. “We believe Ryan Cohen and his team can repeat the success he achieved at Chewy.com.”
Kim said he recently opted for another American company. The fund increased its holdings in U.S. stocks Kaleyra Inc. now has a 5.2% stake in the software firm.