GAMESTOP AND THE RETURN OF MICHEAL BURRY. From “The BigShort” to “Short Squeeze”, the speculations of a brilliant man
A brilliant man does not stop to analyze current values and ignores the so-called technical analysis, but pushes himself to consider the actual potential of a market, or an action. Consider the numbers, but also the technology and commercial offers.
Michael Burry is known for being one of the few to have predicted the 2007 subprime mortgage crisis, so much so that he entered the movie “The big short”, where he was played by Christian Bale. Today he bet, winning, on a company that everyone gave for decoction: Gamestop.
Gamestop is a worldwide chain that deals with the sale and exchange of videogames. In the age of the Internet, a business that appears outdated: who most buys a game in store when they can download it? Michael Burry, on the other hand, in August 2019 bought 3 million shares of this company through his own Scion Investment fund. As always, a move that seemed extremely risky in a shaky business.
But Burry, as always, did his homework and analyzed the business and the situation of the company:
a) Microsoft and Sony platforms are still based on the sale of games, on disc, giving new life to stores like Gamestop;
b) the company was in much better shape than previously thought;
c) if the shares had dropped further in 2020, the company itself would have had an interest in repurchasing its own shares at the liquidation price, and the direct funds based on algorithms would have sold without problems;
As of September 2020, Scion still owned 1.7 million Gamestop shares which was one of the most short-selling shares in the market. however, the "Squeeze" of the "Short" positions has arrived, that is, the share, instead of falling, has seen its value grow by putting bearish speculators offside and by clipping them extensively:
So Dr. Michael Burry (with a degree in medicine) was right for the umpteenth time and will be able to write to his associates about this victory too.
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The article GAMESTOP AND THE RETURN OF MICHEAL BURRY. From “The BigShort” to “Short Squeeze”, the speculations of a brilliant man comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/gamestop-ed-il-ritorno-di-micheal-burry-dal-the-bigshort-al-short-squeeze-le-speculazioni-di-un-uomo-geniale/ on Sat, 23 Jan 2021 10:40:31 +0000.