GameStop rallies as Michael Burry takes a trip down memory lane
Shares of GameStop are up more than 3% in premarket trading on Friday.
Thanksgiving is a time for catching up with family and reminiscing about the good times. To that end, early Thursday morning (just after midnight), hedge fund manager turned Substacker Michael Burry published tweets that purportedly offer a look into the lore of his time spent betting on the success of the video game and collectibles retailer ahead of its ascendance to meme stock status.
In one, he shared screenshots of Scion Asset Management’s letter to GameStop’s board of directors, as well as emails appearing to be from Keith Gill, aka Roaring Kitty, the retail trader whose GameStop thesis inspired legions to jump onboard, and Ryan Cohen, who would go on to become GameStop’s chairman, president, and CEO.
Shares have bounced back in earnest since the stock regained support of the $20 level at the start of this week.
Burry’s Scion announced a bullish GameStop position in GameStop in 2019, and held this through at least the third quarter of 2020.
At the peak of its meme stock frenzy in January 2021, however, he called the price action “unnatural, insane, and dangerous” in a since-deleted tweet, and said that he was no longer long or short the company.
Do I think this is the reason why shares of GameStop are flying on Friday morning?
Eh, in most circumstances I’d say this is pretty thin gruel. But this is a stock that has, in the past, traded off of nostalgia, its exposure to things that are cool or entertaining, and leaders with Big Main Character Energy.
Your mileage may vary, but to me Burry’s trip down memory lane hits a few of these notes. The company is inside the top 20 most mentioned tickers on SwaggyStocks over the past 12 hours as of 8:20 a.m. ET, has seen the greatest pickup in mentions on Stocktwits compared to the prior session (per a Bloomberg Automation report), and Burry’s post is being very positively received on the r/Superstonk subreddit dedicated to discussions of GameStop.
That being said, all this is not something that can reasonably been said to have changed the outlook of GameStop’s estimated future discounted cash flows.
Of course, it’s also Black Friday, and we’ve seen promotional events be a boon for the video game and collectibles retailer this year:
