GameStop Rises After Michael Burry Says He’s Been Buying Shares
GameStop shares moved higher after investor Michael Burry said he has been buying the stock, framing the position as a long-term value bet tied to Ryan Cohen’s strategy and the company’s cash pile.
Michael Burry, the investor best known for betting against the US housing market before the financial crisis, says he’s been buying shares of GameStop in recent weeks.
“I own GME. I have been buying recently. I expect I am buying at what may soon be 1x tangible book value / 1x net asset value,” Burry wrote in a Substack post published Monday. He pointed to Chief Executive Officer Ryan Cohen’s role in investing and deploying the company’s capital and cash flow, adding that it could be “for the next 50 years.”
GameStop shares jumped more than 6% on Monday after the post circulated.
Burry who has recently shut his hedge fund, Scion Asset Management framed the position as a long-term value investment rather than a bet on a return of meme-stock mania. GameStop was a central name in the meme-stock surge about five years ago, when retail traders organized on online forums pushed the stock sharply higher and triggered short covering among hedge funds.
“I am not counting on a short squeeze to realize long-term value,” Burry wrote. “I believe in Ryan, I like the setup, the governance, the strategy as I see it. I am willing to hold long-term.”
After giving back much of its meme-era gains as speculation faded, the stock last traded around $25. The company has also used bursts of investor interest to raise billions of dollars through equity sales, building a sizable cash position.
“Ryan is making lemonade out of lemons,” Burry wrote, describing GameStop as a challenged core business that has nonetheless been used to raise cash and wait for an acquisition opportunity.
GameStop began buying bitcoin last year in a move that echoed the strategy popularized by MicroStrategy, now known as Strategy. Cohen said the decision was driven by macro concerns, arguing that bitcoin’s fixed supply and decentralized structure could help hedge certain risks.
“I do not know about this Bitcoin thing, but I cannot argue with what has been done so far,” Burry wrote.
Burry isn’t alone in leaning bullish. Cohen bought 1 million shares of GameStop last week, according to disclosures filed with the Securities and Exchange Commission. In a Jan. 21 SEC filing, he said it’s “essential” for a public-company CEO to buy shares with personal funds to strengthen alignment with shareholders.
