Calpers Invests More into AMC and GME

The largest public pension, California Public Employees’ Retirement System, also known as “Calpers” has recently quadrupled its investments in AMC Entertainment and GameStop. In the fourth quarter, California Public Employees Retirement systems disclosed the surprising transactions in a form filed with the Securities and Exchange Commission (SEC). Calpers currently manages 480 billion in assets and has not made any public commentary on their recent investment’s changes. While Calpers piled into meme stocks like AMC and GME, they additionally increased their investments in Warren Buffetts, Berkshire Hathaway firm. On the contrary, they have simultaneously offloaded 11% of their stake in Planatir Technologies, a data- analytics software company.  This is all during investigations into alleged short sellers engaging in illegal activities that have been said to affect the share price of AMC stock and other stocks within the same genre where prosecutors are looking into these short sellers.

Source: Deadline

Optimism for AMC & GME

To some extent these investment changes come to a surprise, the two meme stocks AMC and GME are polar opposite to a company like Berkshire Hathaway. However, AMC entertainment has made a drastic improvement from where it was in 2020 and has increasingly drawn in investors over the last two years. In a filing to the SEC, Calpers has bought $503,000 more shares of AMC, increasing their holdings to a total of $619,400 shares. The movie-theatre chain has 

While we’ve watched meme stock AMC be continually hyped up by investors on social media, we haven’t seen the exact same for meme stock GameStop. Thus far in 2022, GME has dropped 18%. However, in the fourth quarter Calpers did scoop 70,600 additional shares, propping them up to a total of 85,400 GME shares. 

The pension company has made dramatic investment changes in the past. In 2000, the company depleted its holdings of tobacco stocks and introduced a ban on investing in tobacco related companies. While they dropped the tobacco stocks, they simultaneously continued investing in marijuana production companies. It was estimated that by 2014, due to the sold tobacco positions, Calpers had missed nearly $3 billion in profits. 

Source: Reuters

Calpers to sell Fossil Fuel Holdings Next?

Recently a state Senate Bill was introduced to require the pension fund to withdraw their current investments in fossil fuel companies, in an effort to help California’s vision to fight climate change. The Bill was created by Senator Lena A. Gonzalez and co-sponsored by Senator Scott Wiener.  The pending legislation would mean public funds CalPERS, as well as as counterpart CalSTRs would have to slowly sell off their combined 9.9 billion in holdings of companies from the Carbon Underground 200 – a list of companies that are deemed to have the largest potential for future emissions. 

Currently the State of California has a large-scale effort to slow global warming and climate change. Gonzalez says, 

“While California has taken a leading role on the world stage in advancing landmark and far-reaching policy and budget solutions to fight climate change, we are also unfortunately faced with the contradictory and incongruent fact that our state’s two largest employee pension funds use their enormous investment power to finance the very companies that are driving climate change”

The newly introduced Bill could mean more upcoming investment changes for Calpers if it passes. 

Source: Yahoo Finance

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