(Bloomberg) — The South Korean hedge fund that made a bold bet on GameStop Corp. almost a year ago is turning less bullish on the U.S videogame retailer’s stock following a seemingly endless rally that has wrong-footed many short-sellers.
Kim Doo-yong, chief executive officer at Must Asset Management, said the stock’s high volatility and more-than-ten times surge since his last interview with Bloomberg in March 2020 are prompting his less rosy view.
The Seoul-based hedge fund, which has 602 billion won ($546 million) in assets under management, had a 4.7% stake in GameStop as of April 2020, according to Bloomberg data based on a filing. That made the Korean fund one of the biggest investors in the Grapevine, Texas-based company.
Kim declined to comment on the fund’s current holding of the U.S.-listed stock, a favorite of retail investors who have become increasingly influential in markets during the pandemic. GameStop shares spiked on a rush of short-covering and day trading after Ryan Cohen, the activist investor and online pet retailer Chewy Inc. co-founder, joined its board on Jan. 11.
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“We have become less bullish and turned more neutral on GameStop,” Kim said in an interview with Bloomberg on Monday. “This stock will continue to be very volatile and unpredictable in the short term.”
Swimming against a bearish tide of analyst views, Kim told Bloomberg in March last year that GameStop is “the only place” potential customers can try companies’ games in person. He still believes in the company.
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“We are still very positive about the new management at GameStop,” Kim said. “We believe Ryan Cohen and his team can repeat the success he realized at Chewy.com.”
Kim said he recently made a bet on another American company. The fund increased its holdings in U.S.-listed Kaleyra Inc and now has a 5.2% stake in the software firm.