Michael Burry made $800 million in 2008 betting against the housing market.

$100 million for himself. $700 million for his investors.

He spotted the impending crash years before mainstream investors caught on.

His call was so legendary, Hollywood made a movie about him called The Big Short.

Now, years after that landmark trade, Burry just made another big bet.

This time he’s buying defunct video game retailer GameStop (GME).

Burry just released a 55-page report explaining his rationale.

What’s interesting is that the first 49 pages are reasons why you shouldn’t buy GameStop.

• GameStop is practically in liquidation mode.

• GameStop’s store count has fallen from roughly 6,000 locations a decade ago to about 2,500 today.

• The collectibles business offers limited upside.

• The company provides minimal communication through investor calls or shareholder letters.

• There’s no short-squeeze dynamic like there was in 2021.

• And the company’s Bitcoin exposure raises legitimate questions.

For nearly the entire report, Burry explains why GameStop doesn’t work.

Then, in the final pages, he reveals his surprising reason for buying.

GameStop: The Next Berkshire Hathaway?

He’s buying for two reasons:

1. A relatively young CEO in Ryan Cohen

2. A massive cash position – roughly $8.8 billion and growing

Despite aggressively shrinking its retail footprint, GameStop is still generating cash.

Over the last twelve months, traditional free cash flow (operating cash flow minus capital expenditures) came in around $569 million.

That’s not trivial for a company the market largely treats as terminal.

A large cash pile, modest ongoing cash generation, and a shrinking capital-intensive business give management something incredibly valuable: flexibility.

This is where Burry’s real thesis emerges.

He explicitly compares GameStop’s setup to early Berkshire Hathaway.

Warren Buffett didn’t buy Berkshire because he believed in textiles.

He bought it, wound down the mills, and used the remaining cash flows and corporate structure to acquire better businesses.

Burry is suggesting Ryan Cohen could follow a similar path.

In the report, he outlines what that evolution might look like, including acquiring an insurance company with the right characteristics and investable float, similar to Buffett’s purchase of GEICO.

He also points to Molina Healthcare (MOH) as a smaller, undervalued opportunity that could fit that mold.

With a cash position of this size, Burry argues Cohen could also structure favorable financing deals during periods of market stress – again borrowing directly from Buffett’s playbook.

In other words, this isn’t a bet on gaming or a retail turnaround.

It’s a bet that GameStop can become a capital allocation vehicle and that Ryan Cohen can evolve from a successful tech entrepreneur into a disciplined, long-term capital allocator.

That’s a thesis very few investors expected.

The Big Question: Is Ryan Cohen the Next Warren Buffett?

This is where investors need to slow down.

Ryan Cohen is not Warren Buffett.

Cohen is a tech entrepreneur best known for founding Chewy, an e-commerce company that competed aggressively with Amazon and was eventually sold at a premium valuation.

That background matters.

Cohen’s expertise is in brand building, e-commerce, customer obsession, and technology-driven retail.

Buffett’s expertise is in insurance, capital allocation, long-term compounding, and financial analysis.

These are not the same skill sets.

Could Cohen learn them? Possibly.

Am I willing to bet my hard-earned money to find out? No.

Burry talks about Cohen’s patience and investing skill set in his report.

But comparing the 40-something tech entrepreneur to Warren Buffett is quite the leap.

Why the Stock Jumped – And What People Are Missing

After Burry’s report went public, GameStop stock jumped.

That was inevitable.

A legendary investor. A meme-stock ticker. A contrarian thesis.

But most buyers didn’t read 55 pages.

They reacted to the headline, not the argument.

And the argument matters.

Burry isn’t buying a turnaround.

He’s buying the possibility that Ryan Cohen can wind down a shrinking retail business and redeploy a massive cash pile into smarter opportunities over time.

That’s an intriguing framework.

It’s also a very different bet than most investors realize.

At this point, you’re no longer investing in a business.

You’re betting on a single person’s ability to allocate capital correctly for years to come.

Could that work? Possibly.

But GameStop is already a high-risk stock.

Turning it into a capital-allocation experiment adds another layer of uncertainty that I’m not willing to take.

So while I respect Burry’s thinking, I’m staying away from GME.

If the stock’s pop caught your attention, just be sure you understand what you’re buying.

This isn’t the investment most people think it is.