Michael Burry has exited his GameStop Corp. (GME) position, according to a Wall Street Journal report on Monday. The move comes after CEO Ryan Cohen unveiled a plan for the videogame retailer to acquire eBay (EBAY) for $56 billion — a deal that Burry says fundamentally breaks his bullish thesis on the company.
In a Monday note to his Substack subscribers, Burry said the debt load required to swallow eBay is incompatible with the vision he had bought into — one in which Cohen would slowly compound capital and reshape GameStop into a modern-day Berkshire Hathaway through disciplined dealmaking.
“Wall Street does indeed mistake debt for creativity, and does so constantly,” Burry wrote, per the Wall Street Journal. “I of all people should have known.”
The mea culpa carries weight coming from the investor immortalized in “The Big Short” for his wager against subprime mortgages, a call built on identifying exactly this kind of leverage-fueled overreach.
Burry’s reversal marks a sharp turn from January, when he disclosed accumulating GameStop shares and explicitly compared Cohen’s capital allocation approach to Warren Buffett’s early Berkshire playbook — patient, opportunistic and powered by a growing cash pile rather than borrowed money.
A $56 billion takeout of eBay would dwarf GameStop’s own market footprint and force the meme-stock favorite to take on substantial leverage, transforming the balance-sheet-light compounder Burry envisioned into something closer to a highly indebted conglomerate bet. It’s a trade he is no longer willing to make.
GME Price Action: GameStop shares were down 10.14% during regular trading and down 1.76% in after-hours trading on Monday, last trading at $23.42, according to market data.
