Michael Burry Says He'll Sell GameStop Stock After Bold eBay Bid
Business Insider • • general
Key Points:
- Michael Burry, an early investor in GameStop, expressed concerns about the company's $56 billion bid to acquire eBay, stating he may sell some or all of his shares due to the high price and risky strategy.
- Burry praised CEO Ryan Cohen's vision but criticized the eBay acquisition plan as overly conventional and potentially damaging due to the significant debt it would incur.
- The proposed deal would be funded through cash and third-party financing, with TD Securities providing a letter for up to $20 billion, but Burry warned the final price and leverage could be much higher, risking GameStop's competitiveness.
- Burry suggested alternative acquisition targets like Wayfair, ADT, and Assured Guaranty, arguing that these companies would better position GameStop to compete with giants like Amazon.
- He concluded that pursuing eBay with heavy debt and restrictive covenants would limit GameStop's innovation and growth, likening it to following a detrimental path in capitalism.
