Renowned investor Michael Burry, the man who famously foresaw the 2008 financial crisis and inspired the film The Big Short, has quietly acquired shares in the once-meme stock favourite Gamestop. The revelation, made in a Substack post published on Monday, sent the company's stock soaring sharply higher, with gains reaching as much as 8 percent during trading.
Burry's Value Investment Play
In his post, Burry explicitly stated, 'I own GME. I have been buying recently.' While the exact size of his position remains undisclosed, he emphasised that this move is a classic value-investing strategy rather than a speculative gamble. Burry believes he is purchasing shares close to Gamestop's underlying book value—the theoretical worth if the company liquidated all assets and paid off debts.
He expressed confidence in the potential for growth, which could drive the share price upward over time. 'I like the setup, the governance, the strategy as I see it,' Burry wrote, distancing himself from the meme-stock frenzy that previously engulfed the company.
Influence of Ryan Cohen
A key factor in Burry's investment thesis is the influence of billionaire entrepreneur Ryan Cohen, who now chairs Gamestop's board. Cohen, who built online pet retailer Chewy into a multibillion-dollar enterprise, has been pushing to overhaul the business. The company is sitting on a significant cash pile and actively seeking reinvestment opportunities for future growth.
Burry acknowledged that this strategic shift might take decades to fully pay off, even quipping that, despite being older than Cohen, he is 'not too old to be patient.' This long-term perspective underscores his commitment to the investment.
Market Reaction and Historical Context
News of Burry's position broke just after 11:30am ET on Monday, immediately propelling Gamestop shares higher. The stock was last trading around $25, up approximately 7 percent. This surge contrasts sharply with the company's recent challenges, including the announcement last week that it will shutter around 470 of its 2,000 stores as part of cost-cutting measures.
Gamestop, founded in 1984 as Babbage's, grew into America's largest specialty video game chain during the console boom. However, the shift to digital downloads and online marketplaces severely impacted its brick-and-mortar model, leading to declining shopper numbers.
Distancing from Meme-Stock Frenzy
Burry was careful to stress that he is not relying on another short squeeze to profit, referencing the historic 2021 meme-stock frenzy. During that period, retail traders piled into Gamestop shares, causing a massive price spike that forced several Wall Street hedge funds to exit their short positions.
'I am not counting on a short squeeze to realize long-term value,' Burry clarified, reinforcing his focus on fundamental analysis and corporate strategy.
Burry's Track Record and Recent Moves
Michael Burry's investment moves are closely monitored on Wall Street due to his prescient bet against the housing market before the 2008 crash. Recently, he shut down his hedge fund, Scion Asset Management, but remains active in the markets.
In November, he made headlines by placing substantial bets against AI giants Nvidia and Palantir, causing market turmoil and significant sell-offs. Since then, Nvidia's stock has declined by 5.5 percent, and Palantir's by 11 percent, highlighting the continued impact of his positions.
With his latest investment in Gamestop, Burry signals a return to value-oriented picks, betting on a turnaround under new leadership while the broader market watches intently.
