Michael Burry Sells All His GameStop Shares After Years of Support: ‘When Billions Are at Stake, Trust in Greed’

GameStop’s status as a meme stock has given it multiple chances to transform from a traditional retailer of physical games into something more innovative. Its latest ambitious move is a $56 billion leveraged buyout of eBay, a plan that CEO Ryan Cohen struggled to articulate during a live broadcast earlier this week. This bold strategy has negatively impacted GameStop’s stock price, causing concern even among its staunchest supporters. Notably, Michael Burry, known for his role in “The Big Short,” has completely exited his position in the company.

“I sold my entire GME position,” Burry stated in a recent Substack post. He expressed that the proposal to acquire eBay with up to $20 billion in debt financing was “never compatible” with his optimistic view of the struggling video game retailer. “Instant Berkshire did not contemplate anywhere near 5x+ leverage,” he added. “Never confuse debt for creativity.”

This marks Burry’s first sale since launching his “Cassandra Unchained” newsletter to share his investment insights.

Burry’s decision is significant not only due to his notoriety from shorting the mortgage-backed securities that contributed to the 2008 financial crisis but also because he was one of GameStop’s early advocates. He initially believed that the stock was undervalued in early 2020, especially with the upcoming launches of the PlayStation 5 and Xbox Series X/S. His argument was straightforward: while physical games were on the decline, the new console generation would provide a boost to GameStop, which investors were not adequately recognizing.

However, he did not anticipate the meme stock phenomenon that would erupt the following spring, driven by a Reddit-backed movement aimed at punishing short sellers. Although Burry had already exited his investment by that time, he returned earlier this year, expressing faith in Ryan Cohen’s leadership to guide the company into a new phase.

“I am not counting on a short squeeze to realize long-term value,” Burry remarked then. He believed Cohen would be a transformative leader and highlighted the potential from investments in collectibles and Bitcoin, as well as the closure of underperforming stores. Burry also noted that GameStop’s ongoing sales of games and merchandise provided a reliable revenue stream.

That confidence appears to be waning. “When hundreds of billions are on the table, bet on craven greed,” he wrote recently. eBay has stated it is currently evaluating GameStop’s offer, but the company is still $14 billion short of the proposed acquisition price.