"I sold my entire GME position. The company's pitch to acquire eBay using up to $20 billion in debt financing was never compatible with my bullish outlook for the ailing video game chain."
"Instant Berkshire did not contemplate anywhere near 5x+ leverage. Never confuse debt for creativity."
"Burry's original case for the company was that its stock price in early 2020 was undervalued relative to the PlayStation 5 and Xbox Series X/S console launches happening later that year."
"While physical games were dying, a new console generation would be a boon to GameStop and investors were not pricing in that value appropriately."
GameStop is attempting a $56 billion leveraged buyout of eBay, which has raised concerns among investors. CEO Ryan Cohen struggled to explain the plan, leading to a decline in stock price. Michael Burry, a notable investor, has liquidated his entire position, stating that the debt financing involved is incompatible with his bullish outlook. Burry initially supported GameStop due to its undervalued stock amid new console launches but did not anticipate the subsequent meme stock phenomenon that affected the company.
Read at Kotaku
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