In a surprising move, Renaissance Technologies LLC, the quantitative fund founded by the late Jim Simons, revealed its participation in the meme-stock craze by purchasing shares of popular companies AMC Entertainment Holdings Inc. and GameStop Corp. ahead of the latest rally.

According to regulatory filings, Renaissance Technologies acquired 3.82 million shares of AMC in the first quarter of 2024, further bolstering its position in the movie theater chain. Additionally, the hedge fund also disclosed a new position by purchasing 1 million shares of GameStop during the three months ending March 31.

This investment comes as shares of AMC and GameStop experienced a significant surge at the start of the week, reminiscent of the 2021 meme-stock trading craze. The rally was sparked by a Reddit post from Keith Gill, known as "Roaring Kitty," whose online presence garnered attention last year for discussing GameStop. However, the fervor has since cooled off, with AMC shares slipping by as much as 16% on Thursday, and GameStop shares falling by as much as 28%.

Despite the recent declines, both stocks continue to trade below their pandemic peaks. During the first quarter of 2024, AMC shares fell by 39%, while GameStop shares dropped by 29%.

Although Renaissance Technologies did not immediately respond to a request for comment from Bloomberg News, it is noteworthy that they were not the only hedge fund to trade meme stocks during the early months of the year. Balyasny Asset Management LP also added both AMC and GameStop to its portfolio, while DE Shaw & Co Inc sold off their positions. Citadel Advisors LLC decided to unload its shares of AMC, and hedge funds like Schonfeld Strategic Advisors LLC and ExodusPoint Capital Management LP exited their positions in GameStop.

The participation of well-known hedge funds in the meme-stock frenzy indicates that these unconventional investments are gaining attention among traditional financial institutions. It remains to be seen how these positions will develop and if other hedge funds will follow Renaissance Technologies' lead in recognizing the potential of these meme stocks.

Disclaimer: The information provided in this article is based on the available data at the time of writing and should not be considered as financial advice. Investors are urged to conduct their own research and consult with a financial professional before making any investment decisions.