By Peter Rudegeair
Videogame retailer GameStop should run the Berkshire Hathaway playbook and use its giant cash holdings to make a transformative acquisition or acquisitions.
That is among the takeaways of an 8,000-word post that Michael Burry, the investor played by Christian Bale in "The Big Short," wrote to paying subscribers of his Substack newsletter on Monday. Burry analyzed the business prospects of GameStop and offered up potential catalysts that could boost the stock.
A GameStop shareholder who said he had bought more stock recently, Burry wrote that GameStop's videogame business is in decline. Nevertheless, he sees upside in the company should Chairman and Chief Executive Ryan Cohen spend $10 billion or more to acquire a quality business, such as an insurer with plenty of customer premiums to invest. A new compensation package that GameStop's board awarded Cohen earlier this month that fully vests only if he meets ambitious market-value and earnings targets provides a good set-up for dealmaking, Burry wrote.
Cohen "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," Burry wrote.
"Then, I would proceed to live my life doing my best Warren Buffett impression. Patiently buying all or in part great businesses and doing sweetheart financing deals in tough times."
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(END) Dow Jones Newswires
January 26, 2026 16:14 ET (21:14 GMT)
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