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NEW YORK: Hestia Capital Partners LP managing director Kurt Wolf joined GameStop Corp’s board to make the US video game retailer more valuable. Then it became too valuable for him to stay on.

The hedge fund manager resigned his directorship this week because his investors fretted the bet on the company, which scored a paper gain of 3,500%, had become too large and risky, three people familiar with the matter said on Thursday.

Giving up the board seat allows Wolf to sell GameStop shares for his investors without restrictions to meet redemption requests, the sources said.

Hestia currently owns 318,600 GameStop shares valued at roughly $53.8 million. It oversaw $75.6 million in assets as of the end of March, with GameStop being its single largest investment.

Hestia has a mandate to invest in “deep value” assets that are unloved and undervalued. GameStop’s shares have been on a wild rally since January as amateur traders organized on social media platforms such as Reddit to snap them up, making them unsuitable for the kind of investing Hestia’s clients hired the fund for, the sources said.

Hestia returned 223.7% in the first three months of 2021 after gaining 162% last year, and Wolf now plans to unload the GameStop shares, the sources said.

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