SUMMARY:
Michael Burry, the famed investor known for The Big Short, has made a surprising move by taking a significant position in GameStop, a stock long associated with the meme-stock phenomenon.
Burry, who previously closed his hedge fund to focus on select investments, has also bought puts on Palantir and Nvidia, showing a mix of cautious and opportunistic bets. As for his endorsement of GameStop, Burry praised CEO Ryan Cohen’s leadership and expressed confidence that the company has a path forward despite the rise of online gaming and declining foot traffic in physical stores.
While the move highlights Burry’s willingness to go against conventional expectations, it also underscores the speculative nature of the investment. The stock responded quickly to the news, reflecting its ongoing volatility and the influence of its meme-stock reputation. Some market watchers, including the discussion participants, view caution as the wiser approach, noting that GameStop’s fundamentals remain uncertain. Ultimately, Burry’s investment serves as a reminder that even high-profile investors can take contrarian positions that defy popular predictions.
TRANSCRIPT:
Doug: One of the guys considered among the greatest investors of the last couple decades made a very strange investment. Can you explain that to us?
Lee: If you’re talking about Michael Burry, yes, I can. You may remember him – he was the guy involved in The Big Short movie, buying credit default swaps on mortgage debt. He absolutely killed it. At first, nobody believed him, and then nobody would sell him the swaps or write them. Michael Burry is a doctor, Dr. Michael Burry, and recently, Doug, he’s been buying puts on Palantir (NYSE: PLTR) | PLTR Price Prediction and Nvidia (NASDAQ: NVDA).
Doug: Yep.
Lee: To the point where he closed down his hedge fund and sent the money back to investors to focus on this. He writes his Substack with his investment ideas. The one thing that really stunned me is that he recently bought a lot of GameStop (NYSE: GME). We did a segment recently on how GameStop was the poster child for meme stocks. He believes Ryan Cohen is running it the right way and that there’s a way out of the tunnel down the road. Video games aren’t going out of style, and a lot of what people buy is online rather than in-store.
I don’t know much about gaming myself – I don’t play, I don’t care – but my son does, and a lot of GameStop’s business comes from online sales. I don’t know if the retail side will ever fully work, but of all people, Michael Burry, Mr. Negative, Mr. Go Short, is long on the stock. He was very laudatory toward Ryan Cohen, the CEO. And maybe he’s right, and we’ll all look like suckers, but I have to admit, I was stunned.
Doug: I don’t think we are. I think we’re going to look smart by not doing it.
Lee: Yeah, I think I’m a seller. Of course, the stock, which still has some meme-stock tentacles, took off the minute this hit the tape. I don’t know what it’s doing today, probably down. But of all the companies you could ask me to name that Burry would buy, this wouldn’t have been on the list.
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