Why Did Michael Burry Sell His GameStop Stake

Investor Michael Burry has exited his entire stake in GameStop following the company’s aggressive bid to acquire eBay, citing concerns over rising debt and financial risk.

In a Substack post, Burry said the proposed $55.5 billion deal relies heavily on leverage, which undermines his earlier “Instant Berkshire” investment thesis. He warned that the company’s debt levels could exceed 7 times earnings, a level he described as risky and potentially distressed.

Famed investor Michael Burry sold his entire position in GameStop after the gaming retailer made an offer to buy e-commerce company eBay for about $56 billion in cash and stock. https://t.co/9AoxWctNzr

📷️: Jim Spellman/WireImage pic.twitter.com/114pUvgN3u

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GameStop’s unsolicited offer includes a mix of cash and stock, with partial financing support from TD Bank. However, analysts have raised concerns about a funding gap and execution risks.

Shares of GameStop fell about 10% after the announcement, reflecting market skepticism. CEO Ryan Cohen defended the strategy but provided limited details.

According to reports, eBay confirmed it is reviewing the proposal.

Also Read:

GameStop Bids $55.5 Billion To Acquire eBay

GameStop has made a $55.5 billion bid to acquire eBay, in a move aimed at building a serious rival to Amazon, according to a report by CNN. GameStop offered $125 per share, combining cash and stock, representing a 46 percent premium, the report said. CEO Ryan Cohen stated the

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