Not optimistic about eBay's acquisition! "Big short" Barry quickly liquidates GameStop
Legendary investor Michael Burry sold all of his GameStop shares due to concerns that the company would incur massive debt from acquiring eBay. GameStop proposed to acquire eBay for approximately $56 billion, and Burry believes this investment idea does not align with reality. He also stated that he has established new short positions and increased his holdings in Lululemon Athletica
According to the Zhitong Finance APP, Michael Burry, the legendary investor and the prototype of "The Big Short," has sold all of his shares in GameStop (GME.US) after the company proposed to acquire the e-commerce platform eBay (EBAY.US) for approximately $56 billion in cash and stock.
Burry had been optimistic about GameStop since around 2019, which drove the company's stock price up. However, the investor informed his subscribers in his Substack newsletter on Monday that he has exited, citing concerns that GameStop may incur massive debt due to the acquisition.
Burry stated, "I sold all my GameStop shares. From any angle, the investment philosophy of 'fast-track Berkshire' does not match the reality."
GameStop proposed to acquire eBay for $125 per share in cash and stock, representing a premium of about 20% over eBay's closing price last Friday. As of last Friday, GameStop's market capitalization was approximately $12 billion, while eBay's is much larger, with a market cap of about $46 billion.
Reports indicate that GameStop has received a preliminary, non-binding "highly confident letter" from TD Bank, committing to provide approximately $20 billion in debt financing and promising to achieve about $2 billion in annual cost savings within 12 months post-closing.
The sale of GameStop shares is the latest trading strategy publicly disclosed by Burry. He recently also posted that he has established new short positions by buying put options on the iShares Semiconductor ETF (SOXX).
On Monday, the investor also mentioned that he has nearly doubled his position in Lululemon Athletica (LULU.US)
