He’s back.
Michael Burry (“The Big Short”) has disclosed a new position in GameStop (GME) via his Substack, Cassandra Unchained. But for those expecting a 2021 replay, Burry is pouring cold water on the “Short Squeeze” thesis. Instead, he sees a fundamental transformation play driven by CEO Ryan Cohen.
KEY TAKEAWAYS:
- 🚫 No Short Squeeze: Burry explicitly dismisses the retail theory of another “MOASS” (Mother of All Short Squeezes), stating the mechanics for such an event “do not amount to much for me.”
- 🦁 The Buffett Comparison: The thesis relies entirely on capital allocation. Burry likens Cohen to a young Warren Buffett, who used a dying textile mill (Berkshire Hathaway) as a funding vehicle to buy better businesses. Burry sees Cohen doing the same: “He has a crappy business… milking it… to raise cash and wait for an opportunity to make a big buy.”
- 💰 The Cash Pile: The bet is on GameStop’s ability to deploy its massive cash reserves into a “transformative acquisition,” a theory supported by Cohen’s new compensation plan which requires a 10x market cap increase to vest.
- ⚠️ Collectibles are Noise: Burry brushed off the company’s recent push into trading cards (“Power Packs”) as a “minor incremental driver” at best.
💡 ANALYST TAKEAWAY: This is a classic “Sum-of-the-Parts” vs. “Managerial Optionality” trade. Burry admits the stock is “pricy” relative to hard assets today, but calls the risk/reward “asymmetric.” He is betting that the market is valuing GME as a failing retailer, while he values it as a Special Purpose Acquisition Company (SPAC) with a loyal shareholder base and a CEO incentives-aligned to hunt for a mega-deal.
👇 Value Investors: Is the “Berkshire Model” replicable in 2026, or is the regulatory and competitive landscape too difficult for a retailer to pivot into a conglomerate?