“The Big Short” Michael Burry Sells Entire GameStop Stake, Blasts “Obscenely Leveraged” eBay Deal


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Michael Burry — the legendary investor who foresaw the 2008 housing crisis and was immortalized in The Big Short — has fully exited his position in GameStop.

The move comes just days after the video game retailer shocked markets with a $56 billion bid to acquire eBay. Burry confirmed the sale to his Substack subscribers on Monday, May 4, stating that CEO Ryan Cohen’s aggressive acquisition strategy has broken the original investment thesis.

From “Berkshire of Gaming” to a Bridge Too Far

Burry had been a vocal GameStop bull, disclosing a stake as recently as January and praising Cohen in February as a natural successor to Warren Buffett. His original thesis was simple: Cohen would use GameStop’s hoard of cash to make disciplined, Buffett-style capital allocations.

The eBay offer changed everything.

“I have sold my entire GameStop position, ” Burry wrote. “No matter how you slice it, the ‘Instant Berkshire’ thesis never held up. ”

The Leverage Problem

Burry’s criticism centers on two numbers: the acquisition premium and the resulting debt load.

GameStop’s offer values eBay at $125 per share — a 20% premium to eBay’s closing price last Friday. With eBay nearly five times GameStop’s size, the deal would force the gaming retailer to take on tens of billions in new debt to close the transaction.

“If GameStop wants to pay billions in interest expenses and live under restrictive debt covenants… that’s not empire-building. That’s walking the beaten, broken path into capitalist hell, ” Burry said.

He added that no amount of corporate cost-cutting could make the math work.

Market Reaction

Burry’s public exit added fuel to an already nervous market. GameStop shares fell 10.14% on Monday, closing at $23.84, with further declines in after-hours trading.

While eBay has confirmed receipt of the non-binding offer, most analysts view the deal as facing near-insurmountable regulatory and financing hurdles. For Burry, the calculus is already finished.

“I trust Ryan Cohen’s instincts,” Burry wrote in a final note. “But this time, I’m sitting on the sidelines.”
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