- Bill Miller’s fund sold almost all of its GameStop shares before their price rocketed in January.
- Miller Value Partners’ 1.7 million shares would have been worth over $800 million.
- The veteran investor’s team dumped 97% of its stake because it hadn’t paid off for years.
- See more stories on Insider’s business page.
Miller Value Partners invested in the video-games retailer in early 2014. It initially bought 1.2 million shares, then boosted its stake to almost 1.7 million shares by the end of 2015, SEC filings show. Its position was worth as much as $68 million earlier that year, when GameStop shares were trading around $43.
If Miller’s fund had held on to its shares, they would have been worth as much as $808 million on January 28, when GameStop’s stock price briefly skyrocketed to $483. Even if they declined to cash out then, their stake would be worth about $270 million at the current stock price of around $160.
However, Miller and his team slashed their position by 97% to roughly 32,000 shares in the first quarter of 2018. “We’ve owned this investment for a number of years and it has yet to work,” Samantha McLemore, Miller’s co-portfolio manager of the Opportunity Equity strategy, explained at the time. While GameStop remained “one of the cheapest companies on the market,” she and Miller ditched it to “avoid perpetual losers.”
Notably, the fund’s Income Strategy bought GameStop shares in May 2019. However, Miller and his son swiftly dumped them after the retailer scrapped its dividend and failed to lay out a clear turnaround plan.
“We cut bait so quickly that we didn’t even own the stock for a full quarter,” Bill Miller IV said in a letter to investors, describing the move as their “biggest mistake” in the period.
The third and final strategy, Deep Value, appears to be holding on. Daniel Lysik, the portfolio’s manager, described GameStop shares as “significantly mispriced” in the first quarter of 2019, and trumpeted their “significant upside potential” last October.
Miller’s fund owned a total of 116,000 GameStop shares at the end of December, or about 7% of the amount it held back in 2015. Assuming it hasn’t already sold them, they would fetch around $20 million today.
Miller Value Partners declined a request for comment from Insider.
Here’s a chart tracking the size and value of Miller’s GameStop holdings over the past seven years: