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Michael Burry replayed his Gamestop bet on Monday’s Substack post.
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A “big short” investor wrote that 2021 was a “captive business” with a “bell of the ball”.
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Burry sold before the meme-stock boom because he was “blindsided” by the risk and saw little payoff.
When it comes to regrets, Michael Burry has a few.
The investor of “The Big Short” fame, who bet on GameStop years before it became a meme, explained why he sold the stock before it soared in a substack post Monday night.
Bury, a recent hedge fund manager-turned-online writer, first invested in GameStop in the summer of 2018. The video-game retailer’s stock seemed undervalued to him, and he saw an array of catalysts that could send it higher, he wrote.
They include a console refresh in 2020, the possibility of a buyout, a potential sale of the Spring Mobile business, and the opportunity to offer strong cash flow and a large cash pile for “very large and consequential buybacks,” Bury wrote.
He stepped down in the second quarter of 2019 after the stock failed to decline. But he reinvested in July 2019, buying the stock “with both hands” and making it one of his larger holdings, as higher short interest offered a new catalyst, he wrote.
Do you have any investment regrets like Michael Burry’s GameStop miss? Share them with this reporter at tmohamed@businessinsider.com
“I went to a GameStop store to make sure I wasn’t crazy,” Burry wrote. “It didn’t work. It looked like stuff that wasn’t on sale should be on sale.”
Bury wrote to GameStop’s board to push for changes at the company. He shared that his public activism has garnered emails from Keith “Roaring Kitty” Gill, a retail investor who would become the face of GameStop Meme Mania, and Chewy cofounder Ryan Cohen, who would become GameStop’s CEO.
Burry said he bought GameStop a second time at a split-adjusted average price of 83 cents, or less than 1/26 of the current $22 stock price.
He bought about 5% of the shares and held it for more than 16 months. “Most of the time, I traded my shares at very good rates — in the high double digits — that were attractive and a huge part of the business,” he wrote.
Burry cashed out by the end of November 2020, selling his shares for an average of $3.38 each, or more than four times what he paid.
Weeks later, retail investors on forums like r/WallStreetBets executed a historic squeeze on GameStop short sellers, sending the stock to an intraday high of more than $120 on January 28, 2021.
