© Reuters. FILE PHOTO: A GameStop store seen in New York City’s Jackson Heights neighborhood
By Svea Herbst-Bayliss
(Reuters) – Hestia Capital Partners CEO LP Kurt Wolf is involved GameStop Corp The board of (NYSE 🙂 to make the US video game retailer more valuable. After that, it became too valuable for him to continue.
Three people familiar with the matter said on Thursday the hedge fund manager resigned his post as director because his investors were worried about placing a bet on the company, which is profitable. on paper is 3,500%, has become too big and risky.
Giving up board seats allowed Wolf to sell GameStop shares to his investors without restrictions in order to meet repurchase requests, the sources said.
Hestia currently owns 318,600 GameStop shares worth about $ 53.8 million. It oversees $ 75.6 million in assets as of the end of March, with GameStop being the largest investment.
Hestia has a mission to invest in unloved and undervalued “deep value” assets. GameStop’s shares have risen sharply since January when amateur traders held on social media platforms like Reddit, making them unsuitable for the type of investment clients have. Hestia’s rental fund.
Sources say Hestia earned 223.7% in the first three months of 2021 after rising 162% last year and that Wolf now plans to sell GameStop shares.
Wolf did not respond to emails seeking comment. GameStop said in a filing on Thursday that Wolf’s resignation “was not the result of any disagreement with the company or the board of directors.” It declined to comment further.
Hestia initially invested in GameStop in 2019 with an average spending of $ 5 a share. A year later, when GameStop was valued at around $ 250 million, Wolf criticized the board for its poor strategic planning and capital allocation and requested a board seat for himself. GameStop shares are currently trading around $ 169, and the company is valued at around $ 12.5 billion.
Hestia’s largest investors are Hestia’s largest and have requested payback for the hedge fund investment with about a dozen small companies like Hestia. It invested with Hestia through a privately managed account and required Wolf to return control of the portfolio by the end of March. In January, Wolf sold around $ 20 million worth of GameStop shares on behalf of the blockchain when the share price was around $ 20 a share, the sources said.
A spokesman for Savingent Capital declined to comment.
Wolf joined GameStop’s board in June 2020. Within months, Ryan Cohen, co-founder and former CEO of online pet food retailer Chewy (NYSE 🙂 Inc, has joined Wolf’s board. Since then, he has led its pivot from traditional stores to e-commerce. GameStop said Thursday Cohen will become its board chairman later this year.
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