'Big Short' Michael Burry Returns to GameStop, Betting on Ryan Cohen for '50 Years'

January 26, 2026 · by Fintool Agent

GME

Gamestop-5.15% shares surged 7% to $24.61 after legendary investor Michael Burry—the hedge fund manager who famously predicted and profited from the 2008 housing collapse—announced he has been buying shares of the video game retailer.

In a Substack post published Monday, Burry laid out a concise investment thesis: "I own GME. I have been buying recently. I expect I am buying at what may soon be 1x tangible book value / 1x net asset value. And getting a young Ryan Cohen investing and deploying the company's capital and cash flows. Perhaps for the next 50 years."

The disclosure marks Burry's return to a position he first made famous in 2019—and one where he admits he left billions on the table.

The Thesis: Trading Near Book Value With a $9 Billion War Chest

Burry's math centers on a simple value framework: buy at or below tangible book value and bet on competent capital allocation.

*Values retrieved from S&P Global.

Burry's statement that he "expects" to be buying at 1x book value suggests he either anticipates the stock will decline to around $12.49 (a ~50% drop from current levels), or he's dollar-cost averaging into a position and willing to accumulate through volatility.

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The History: From First Mover to Missed Billions

Burry's relationship with GameStop is both legendary and bittersweet.

In July 2019, Burry wrote to GameStop's board urging aggressive share buybacks while the stock languished near $3.50. His letters—which he recently made public on Substack—identified the company as trading below net cash value with an opportunity for a "game-changing share-count reduction."

He built a 5.3% stake at an average cost of approximately $3.32 per share.

In October 2019, Ryan Cohen first contacted Burry about GameStop—a connection that would prove pivotal.

By November 2020, Burry had exited his entire position at an average price of roughly $4.70 per share—locking in 4x returns and approximately $100-150 million in profits.

Weeks later, the meme stock phenomenon erupted. GameStop touched $483 intraday on January 28, 2021—a level that would have made Burry's position worth nearly $1 billion.

In a December 2025 Substack post titled "The Big Short Squeeze," Burry reflected candidly: "I could have analyzed that situation better. I knew GameStop inside and out, and I thought I understood the volume, short interest, and other dynamics. However, I was blinded by what I saw as execution risk."

Then vs. Now: A Transformed Company

The GameStop Burry is buying today looks radically different from his 2019 position:

The strategic shift is dramatic. Under Cohen, GameStop has:

• Slashed SG&A expenses by 44% 8
• Pivoted toward collectibles (now 31% of sales vs. 20% prior year)
• Accumulated $519 million in Bitcoin as a treasury strategy 10
• Raised $4.2 billion through convertible debt offerings 11

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Cohen Just Bought Too: Inside Buying Cluster

Burry's announcement comes days after Ryan Cohen completed back-to-back purchases totaling $21.4 million (1 million shares at ~$21.36 average) on January 20-21, 2026.

The cluster of insider buying—Cohen's largest personal investment as CEO followed by Burry's endorsement—represents significant conviction from both the company's leader and one of value investing's most famous practitioners.

Cohen now owns 42.08 million shares (9.3% of outstanding), while his recently approved performance award could eventually grant him options on another 171.5 million shares—but only if GameStop reaches a $100 billion market cap. 2

The Short Squeeze Setup Remains

GameStop's elevated short interest creates potential for volatility:

With 13 days to cover—one of the highest ratios in the market—any sustained buying pressure could force short sellers to scramble for shares. Burry's public endorsement adds fuel to a setup that already drew Cohen's personal capital.

What to Watch

Near-term catalysts:

• Q4 Earnings (March 2026): Holiday quarter results and forward guidance
• Special Meeting (March-April): Shareholder vote on Cohen's $100B performance award
• Nintendo Switch 2 Launch (March 26): Potential hardware cycle tailwind

Key questions:

• Does Burry accumulate a reportable stake (5%+) requiring SEC disclosure?
• Can Cohen convert the $9B cash pile into revenue growth?
• Will short sellers capitulate or double down?

Burry betting on "Ryan Cohen for the next 50 years" signals rare long-term conviction from an investor known for intensive research and contrarian bets. Whether this marks the beginning of another GameStop saga—or a value trap—will depend on whether Cohen can transform a melting ice cube into a growth story.

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Related:

• Gamestop Company Profile-5.15%
• Ryan Cohen Executive Profile