Michael Burry, the investor best known for betting against the U.S. housing market before the financial crisis, said that he has recently been buying shares of video-game retailer GameStop (GME). In a Substack post published on Monday, Burry explained that he believes the stock is approaching a valuation that is close to its tangible book value. This means that the market price may soon equal the company’s underlying physical assets, including its cash and investments.
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He also praised CEO Ryan Cohen by saying that he is young and focused on investing GameStop’s capital wisely. As a result, Burry sees the potential for long-term value creation, which suggests that this could be an investment that plays out over decades rather than years. Unsurprisingly, investors seemed to like Burry’s comments, as shares are surging at the time of writing.
Is GameStop a Good Stock to Buy Now?
According to TipRanks A.I. Analyst, GameStop has a Neutral rating of 62 and a price target of $22, implying 11.2% downside risk over the next twelve months.
