‘Big Short’ Michael Burry's Latest Contrarian Call: Buy GameStop

Burry, a major character in Michael Lewis’ best-selling The Big Short, was depicted by actor Christian Bale in the movie based on the book.

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I interviewed Michael Burry today of "Big Short" fame on why he’s bullish on GameStop (GME).

Burry, a major character in Michael Lewis’ best-selling “Big Short” was among the first to bet against subprime mortgages using credit default swaps going into the financial crisis. It led to triple-digit returns for his fund’s investors. Yes, he’s the barefoot doctor depicted by actor Christian Bale in the movie based on the book.

The investor RARELY speaks to the press. I believe the last time was four years ago, so this is a treat.

GameStop’s “balance sheet is actually in very good shape,” Burry said in a phone interview on Wednesday. “I believe they will have the cash flow to justify a much higher share price.”

The videogame retailer’s shares have fallen 72% this year after a series of disappointing earnings reports and worries over its future in an increasingly digital-download dominated landscape.

Burry believes the market is overly pessimistic over the company’s prospects, noting next-generation consoles, which are widely expected next year, are likely to have physical optical disk drives. He also had some interesting comments, saying a big driver of GameStop’s drop this year was due to “technical factors” - including an accounting guideline change and selling by “machines.” It was fascinating.

Read my full Michael Burry interview story HERE.

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Tae Kim
Tech Reporter, Barron’s

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I write about technology, the stock market and video games. You can also check out my bio and archive of stories on taekim.com. Follow me on Twitter and Instagram.