Stanley Druckenmiller.

Stanley Druckenmiller’s fund bet on GameStop’s stock to fall last quarter, SEC filings show.
Duquesne Family Office bought put options against 556,000 shares of the video-game retailer.
Druckenmiller has described GameStop stock as “radioactive” and warned meme stocks are overvalued.

Stanley Druckenmiller disclosed a bearish bet against GameStop on Monday, after blasting the meme stock as “radioactive” last year.

The billionaire investor’s Duquesne Family Office bought put options against 556,000 GameStop shares with a nominal value of $14 million, a Securities and Exchange Commission filing revealed on Monday. Put options grant their holders the right to sell a stock at a certain price by a specific date, meaning they typically rise in value as the stock falls.

GameStop shares skyrocketed in January 2021, as amateur investors rallied behind the video-game retailer and took aim at the hedge funds shorting its stock. The company’s stock price touched a split-adjusted, intraday peak of $121, boosting its market capitalization to north of $30 billion.

However, GameStop shares have plummeted since then to about $26 as of Monday’s close, slashing the retailer’s market cap to below $8 billion.

Druckenmiller predicted in May 2021 that retail investors trading stock tips on Reddit forums would become a permanent fixture in markets. However, he suggested enthusiasm would wane around particularly risky bets such as GameStop.

“Wall Street Bets is here to stay, and they’ll probably migrate away from some of the more radioactive names like GameStop,” he said.

The veteran investor, who previously worked as the lead portfolio manager of George Soros’ Quantum Fund, also rang the alarm on meme stocks, cryptocurrencies, and other investments last November. “This bubble is in everything. Every asset on the planet,” he said.

Moreover, Druckenmiller bemoaned the immense hype and rampant speculation in markets a few months earlier.

“I have no doubt that we are in a raging mania in all assets,” he said. “A monkey could make money in this market.”

It’s worth noting that Duquesne may have exited its GameStop position since the end of September. Moreover, quarterly portfolio updates don’t always provide a full picture of a fund’s holdings, as they only include US-listed equities. They don’t include other investments such as derivatives, shares sold short, or stocks listed overseas.

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Source:: Business Insider

      

Billionaire investor Stanley Druckenmiller reveals bet against GameStop – after calling the meme stock ‘radioactive’

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