Benzinga | Aug 25, 2021 06:45AM EDT

This Famed Value Investor Axed GameStop, AMC Stakes Just Ahead Of Stonk-Mania, Missing Out On $400M Opportunity

Value investor Joel Greenblatt's Gotham Asset Management LLC missed out on a potential $400 million in gains after having sold almost its entire holdings in GameStop Corp. (NYSE:GME) and AMC Entertainment Holdings Inc. (NYSE:AMC) before the retail trading mania earlier this year.

What Happened Gotham Asset Management had owned 1.2 million shares in GameStop worth $41 million at the end of 2014, but later trimmed its stake and exited its entire position in the videogame retailer in this year's first quarter, regulatory filings show as first noted by Business Insider.

See Also: How To Buy AMC (AMC) Stock

The hedge fund would have earned $370 million if the entire stake of about 1.2 million shares was sold when GameStop's stock price touched $300 in January this year.

Similarly, Greenblatt's fund owned around 550,000 shares in AMC Entertainment worth about $9 million in mid-2018 but trimmed the stake to about 7,000 shares at the end of the second quarter this year.

The entire stake would have been worth up to $34 million when the movie theatre chain's stock peaked in June, the report added.

See Also: AMC Entertainment Is Getting Hot Again: Here's What To Look For

Why It Matters: Gotham Asset Management is not the only investment management firm to miss out on the windfall from the retail trading boom this year.

It was reported in April that legendary investor Bill Miller's investment management firm Miller Value Partners LLC missed out on a potential $800 million windfall after having sold almost its entire stake in GameStop before the retail trading mania earlier this year.

Meanwhile, hedge funds such as Melvin Capital are struggling to rebound from the losses incurred earlier this year from betting against these so-called stonks, which are stocks popular with retail investors.

Price Action AMC Entertainment shares closed 20.3% higher in Tuesday's regular trading session at $44.26 and further gained almost 4.4% in the after-hours session to $46.20.

GameStop shares closed 27.5% higher in the regular trading session at $210.29 and further gained 0.5% in the after-hours session to $211.40.

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