Investor Michael Burry, famed for his successful bet against the U.S. housing market before the 2008 financial crisis, has disclosed a new long-term investment in GameStop (GME). In a Substack post published on Monday, Burry revealed he has been buying shares of the video game retailer, framing it as a fundamental value play rather than a speculative meme stock trade. Following his announcement, GameStop shares surged, rising more than 6% intraday and closing up 4.44%.
Burry's investment thesis centers on CEO Ryan Cohen and the company's substantial cash reserves. He stated he is buying near 1x tangible book value and 1x net asset value, expressing confidence in Cohen's ability to deploy the company's $4.7 billion net cash pile over a long-term horizon, potentially for the next 50 years. "I believe in Ryan, I like the setup, the governance, the strategy as I see it," Burry wrote, adding that he is prepared to be patient with the investment.
Burry explicitly distanced his position from the meme stock frenzy of 2021, writing, "I am not counting on a short squeeze to realize long-term value." He compared Cohen's strategy to Warren Buffett's approach at Berkshire Hathaway, transforming a legacy business. Burry noted, "Ryan is making lemonade out of lemons. He has a crappy business, and he is milking it best he can while taking advantage of the meme stock phenomenon to raise cash and wait for an opportunity to make a big buy of a real growing cash cow business."
The news coincides with recent actions by CEO Ryan Cohen. Just last week, Cohen purchased 1 million GameStop shares for approximately $21.4 million on the open market, a move he said in an SEC filing was "essential" to align with stockholders. Shareholders are also set to vote in March or April on a performance-based compensation package for Cohen that could grant him options to purchase up to 171.5 million shares if ambitious targets like a $100 billion market cap are met.
A notable element of GameStop's recent strategy is its foray into Bitcoin. The company began buying Bitcoin last year, following a playbook similar to MicroStrategy. Cohen cited macro concerns and Bitcoin's fixed supply as rationale. Burry addressed this cautiously in his post, writing, "I do not know about this Bitcoin thing, but I cannot argue with what has been done so far."
