GameStop shares move higher after Michael Burry says he’s been buying the stock

Michael Burry, the investor made famous by his bet against the U.S. housing market ahead of the financial crisis, disclosed that he has been buying shares of one-time meme darling GameStop.

“I own GME. I have been buying recently. I expect I am buying at what may soon be 1x tangible book value / 1x net asset value,” Burry said in a Substack post published Monday. “And getting a young [GameStop CEO] Ryan Cohen investing and deploying the company’s capital and cash flows. Perhaps for the next 50 years.”

Shares of GameStop surged more than 6% on Monday following the news.

Burry, who recently closed his hedge fund Scion Asset Management, said his investment is a long-term value play rather than a wager on renewed meme stock speculation. GameStop was at the center of a meme stock frenzy that erupted roughly five years ago, when retail traders coordinating on online forums drove the shares to extraordinary heights and forced massive short-covering by hedge funds.

“I am not counting on a short squeeze to realize long-term value,” he wrote. “I believe in Ryan, I like the setup, the governance, the strategy as I see it. I am willing to hold long-term, and I am excited to see where this goes. I am fifteen years his senior, but not too old to be patient.”

The stock has since given back most of those gains as trading activity normalized and speculative interest waned. It last traded around $25 apiece.

Still, GameStop has taken advantage of periods of elevated investor interest to raise billions of dollars through equity offerings, leaving it with a substantial cash pile.

“Ryan is making lemonade out of lemons,” Burry wrote. “He has a crappy business, and he is milking it best he can while taking advantage of the meme stock phenomenon to raise cash and wait for an opportunity to make a big buy of a real growing cash cow business.”

The video game retailer began buying bitcoin last year in a similar move made famous by MicroStrategy, now known as Strategy. Cohen said at the time that the decision to buy bitcoin is driven by macro concerns as the digital coin, with its fixed supply and decentralized nature, could serve as protection against certain risks.

“I do not know about this Bitcoin thing, but I cannot argue with what has been done so far,” Burry said.

Burry isn’t the only notable investor betting on the company as of late. Just last week, Cohen snapped up 1 million shares of GameStop, according to disclosures filed with the Securities and Exchange Commission. In a Jan. 21 SEC filing, he noted that it’s “essential” for the CEO of a public company to buy shares with his or her own personal funds “in order to further strengthen alignment with stockholders.”