Michael Burry posted a detailed breakdown of the GameStop (GME) gamma squeeze rally of 2021, explaining the unique set of circumstances that coincided at just the right time to create a historic win for retail traders and throw a spotlight on other meme stocks.
For his part, Burry first built a meaningful GameStop (GME) stake in late 2018, exited in Q2 of 2019, then rebuilt it in mid-2019 and ultimately finished selling out by November 2020, just before the January 2021 gamma squeeze. His inside baseball accounting of the GameStop (GME) saga may be the most insightful on the Internet.
Looking to the future of GameStop (GME), Burry teased that he will post a detailed breakdown of GameStop (GME) as an investment today. For now, he offered the following points for investors to digest.
“GameStop has been run for some time now by Ryan Cohen. His tenure has not been perfect, yet the company has recently produced significant free cash flow, has a ton of cash on the balance sheet, some very asymmetric convertible debt, and a business model that has been revamped to be more online, more digital, more crypto, more collectibles, and fewer stores.”
“As a melting ice cube and a capital structure with some optionality, GameStop is roughly as I approached it in 2018, except it is only 16% shorted, all the numbers are 10 times bigger, and Ryan is running it, for better or worse.”
GameStop (GME) is down 29.4% on a year-to-date basis. Short interest on the stock is 14.9% of the total float. The company has a cash position of $8.8 billion at the end of Q3 (as of November 1). For comparison, the current market cap on GameStop (GME) is $9.9 billion