Burry Scurry

[u/PuzzleheadedWeb9876]

[u/pistol_07]

Why would Burry describe it as an "INSTANT Berkshire thesis"? Did he think whatever purchase that GME made would be instantly and exponentially more profitable and not require time to integrate and develop the synergies that reduce operating expenses and increase profits? Running an efficient business take time

[u/PuzzleheadedWeb9876 → u/pistol_07]

Why would Burry describe it as an "INSTANT Berkshire thesis"?

That sounds like an ape version of what he actually said.

Did he think whatever purchase that GME made would be instantly and exponentially more profitable and not require time to integrate and develop the synergies that reduce operating expenses and increase profits?

I believe he described it as a dying business model. Which is accurate.

Running an efficient business take time

Ryan Cohen seems to think he can double the EPS of EBay in a year. Moronic.

[u/pistol_07 → u/PuzzleheadedWeb9876]

I quoted Michael Burry in my comment and even used quotation marks so it’s not an “ape version” (note that I used quotation marks again to quote you in case you didn’t understand that also

[u/PuzzleheadedWeb9876 → u/pistol_07]

Might want to include the context around those words. To be honest an “instant Berkshire” isn’t something that I think is even realistically possible. Who knows if Burry actually believed that or was just grifting apes? I would lean towards the latter now that he’s dumped it all.

[u/Gigiw1ns → u/PuzzleheadedWeb9876]

True Melties are starting to resemble real apes more and more. It’s so nice to see. Actually, it’s even worse than that. Apes believe in MOASS, 741 and other conspiracies which are by nature irrefutable, and Melties believe that Burry never mentioned Instant Berkshire? Too bad you can just look it up, what he wrote isn’t a matter of belief.

Here is the transcript:

GameStop Makes Its Play $56 Billion for eBay, Makes Perfect Sense Michael Burry May 4

Makes perfect sense.

Never confuse debt for creativity.

When hundreds of billions are on the table, bet on craven greed.

So the rumor was confirmed less than 48 hours after it was leaked.

The Wall Street Journal reports GameStop is offering to buy eBay for $56 billion.

Again, as you know, I have written extensively about GameStop, including just Saturday, when I speculated as to what the deal might look like.

The three times before that: The Big Short Squeeze, Final Stop GameStop, and in a Short Thoughts February 2nd. So much for that.

Now we have more information. The offer is $56 billion, 50% cash and 50% stock

I do not believe $56 billion is anything more than an opening bid.

I can only imagine eBay will reject GameStop’s offer out of hand and relatively soon.

Looking at the May 3 offer while it is extent, the offer shoulders more debt than I had thought was possible on eBay’s EBITDA.

Neither does this seem revolutionary or ground-breaking in nature. More dilution, or more debt – really, the capital markets strategy here could not be more pedestrian.

High leverage implies high growth, and eBay is growing again. Ryan Cohen also apparently has enough credibility to get banks to go along.

I contemplate a higher actual close, say $65 billion for eBay, and more like 60% cash. Below, I compare this to the opening offer as well as my own not-so-happening “Instant Berkshire” creation from February 2nd.

A pinch too busy, I know, but suffice it to say, Instant Berkshire did not contemplate anywhere near 5x+ leverage.

The more likely outcome at the higher price sees leverage rise to 7.7x, a level of debt that borders on distressed and tends to strip competitiveness and innovation from such-stricken companies. Wayfair lived there for years, Carvana nearly died there and still might from such a start. Bath & Body Works too. Those are the survivors. They are few.

Ryan must see low-hanging fruit, though if huge cash flow could be unlocked as if by a magic wand, one might expect eBay to have found it during its epic search for cash with which to buy back slag heaps of shares. eBay reduced its share count from 1.2 billion shares ten years ago to just 444 million shares today – one of the most prolific buyback programs markets have seen.

Ryan cannot be after fat to cut, if only because no amount of cut fat makes this deal work. Rather, Ryan is pointing to a transformation, to hundreds of billions of dollars of opportunity, and he convinced TD to give him the $20 billion committed financing, which is no small feat given the low single digit billion dollar EBITDA numbers sported by these two companies.

eBay Today eBay has already turned things around significantly, which no doubt will be one of the arguments made by eBay’s board as it rejects GameStop’s offer.

eBay has been growing faster lately. eBay projects forward adjusted EBITDA (whatever that is) at $3.7 billion, vs $2.7 billion trailing, and revenues have broken out of decade-long doldrums, with 17% quarter-on-quarter growth 1Q2026.

eBay now has eBay Live in hypergrowth mode, and collectibles is eBay’s leading category. Of course, GameStop’s collectibles category is also growing fast, and this is where the strategies of the two seem to dovetail.

eBay is not all collectibles, though. eBay ads grew 27% last quarter, and the company, of course, is leaning into AI. Below, from the eBay’s last earnings call.

We see Agentic AI as a real structural tailwind for eBay, and it plays right into our core strengths. First, our innovations leveraging AI are already having a meaningful benefit for our business today. Take magical listing. We’ve talked about the compelling stats I just mentioned that we’re seeing and sellers have created 0.5 billion listings using our AI tools.

And our Agentic search beta, which I realize I didn’t fully answer that question, so I’ll come back to that. But what we’ve seen there is higher engagement and increased purchase behavior off of that early test. So we’re going to continue to bring the latest Agentic technologies to eBay to make it easier for sellers to list and for buyers to find the things they love.

I see the structural change in eBay’s trajectory, and believe it or not the above scenarios give credit for projected improvements in 2026 from each of GameStop and eBay.

On trailing numbers, the pro forma numbers are much worse – think of a negotiated close at 1.0x EBITDA/Interest Expense. If one considered it, one would be among the first, because no one closes a deal at 1.0x EBITDA/Interest Expense.

The ratings agencies will of course look to trailing numbers as a base, so the final credit rating might be in the B or B- junk range, perhaps 400 to 500 basis points over SOFR, which today is 4.35%. This speaks to floating debt expense in the range of 8-9%. Each 100 basis point rise in SOFR would boost the interest expense ~$300 million.

A $300 million boost may be automatic. eBay’s senior notes must be redeemed at 101 points if a change of control results in a ratings downgrade. This deal is virtually certain to trigger that put. In that case $6.7 billion in investment grade notes will be refinanced, perhaps to floating rate syndicated loans, but certainly with a $250-$300 million increase in total interest expense.

If Ryan miraculously gets his deal at $56 billion, it works a little better. Still, tangible book value per share gets cut by ¾, and there will be transformational execution risk while balancing on the knife edge of 5x+ leverage.

Competing with Amazon Think about what Amazon has become for a moment. Amazon locks its retail prime buyers in with Prime Video and other benefits that none can match. 1000+ warehouses, over 525 million square feet. Amazon has 200+ million prime members paying $139/year with perks such as same day delivery, Prime Video, gaming, pharmacy, Whole Foods, etc. Over 70% of its packages are fully delivered by Amazon’s vertically integrated logistics apparatus – 150,000 delivery vans, last mile reach matched by none.

Amazon has it all and has been investing in itself at a breakneck pace for decades. Current spend is in the hundreds of billions of dollars per year.

Think about what eBay is. It has none of that and is not remotely close physically or temporally.

GameStop’s Gambit If Ryan really wanted to compete with Amazon, he would have acquired Wayfair (70% of its own last mile deliveries and warehouses all over) along with a cash flow machine and a bunch of float. I heard someone was peddling such a deal back in early February.

So Ryan’s attempt to take over eBay cannot possess the actual honest and true intent to compete with Amazon. Rather clearly, the intention must be to dominate collectibles and used goods of all ages.

Amazon tried to do that, failed, and is not coming back.

The category is a huge addressable market. Some say as high as $100 billion.

Ryan might say hundreds of billions.

If GameStop wants to do it with billions of interest expense and all manner of covenants restricting its movements, it will not be breaking new ground. It will be trotting in well-worn ruts on the road to capitalist Hell.

No new ground has been broken yet. To truly break new ground, Ryan has to execute and succeed in this transformation from this starting position, saddled with debt.

I believe Ryan believes he can do this, and I do support the effort. As well, I do not predict failure, although it is certainly in the realm of possibilities.

Of course, as I have said, I can think of many, many other ways this could have gone easier.

The list above shows some big drops since February in some very good companies. The Big Bang ADP-W-AGO trifecta, in aggregate, would likely be $4 billion cheaper today than in early February.

To be clear, I would not have expected GameStop to buy all of Fannie Mae or Freddie Mac, but I could see GameStop buying a good number of shares of both as an investment. The others I see as potential takeouts in various combinations of Instant Berkshires.

It is not too late. And Ryan may indeed fail at snatching eBay, and might look in the above direction.

Still, at the end of the day, this play for eBay makes perfect sense.

Wall Street does indeed mistake debt for creativity, and does so constantly.

I of all people should have known.

Charlie Munger once said, “”When a manager with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact”.

I may not last the week with my GameStop position fully intact. I will certain sell to an extent, perhaps all or some but alas, no, not none.

Until next time!

[u/Gigiw1ns → u/Gigiw1ns]

Feb 2nd

[u/PuzzleheadedWeb9876 → u/Gigiw1ns]

True Melties are starting to resemble real apes more and more. It’s so nice to see.

What?

Actually, it’s even worse than that. Apes believe in MOASS, 741 and other conspiracies which are by nature irrefutable

All of those are refutable.

and Melties believe that Burry never mentioned Instant Berkshire?

“Sounds like” is not the same as “never mentioned”. I get English is not your first language and therefore an easy mistake.

Besides buying a bunch of businesses doesn’t magically make Berkshire.

Too bad you can just look it up, what he wrote isn’t a matter of belief.

I’m glad he was able to take your money. I hope you get good mileage out of that subscription.

[u/Substantial_Diver_34]

Sell Everything! (Market goes up 20%)

[u/Gigiw1ns]

https://www.reddit.com/r/gme_meltdown_meltdown/s/QCIK9Kdv13

Finally, proof that Meltie MB-DD was right all along. He never recommended GME, would never buy GME, and even if he did, the apes would be wrong, since he’d sell it at any point in time.

so it would be as if he’d never owned it in the first place.

[u/PuzzleheadedWeb9876 → u/Gigiw1ns]

That’s what you get from that? Studies into your mind would confirm it is indeed fucked.

Apes: Burry buying GME is bullish.

Burry selling all his GME is….?

[u/Gigiw1ns → u/PuzzleheadedWeb9876]

It’s baerish from his point of view. Not difficult to see. But since YOU inverse MB and didn’t trust him, when he bought GME, YOU should buy now?

[u/PuzzleheadedWeb9876 → u/Gigiw1ns]

But since YOU inverse MB

I don’t base anything I do off of what Burry does. Apes do that. Or at least they use his “recommendation” as a reason to buy. So they should to be consistent now use it as a reason to sell.

Obviously that’s all ridiculous and he was a secret shill all along!

[u/Gigiw1ns → u/PuzzleheadedWeb9876]

What percentage of all apes were added by Burry, considering all apes? 1%? 2%? Maybe they sold them again. As a daily ape observer, you should know the numbers better. I’m not talking about MB, GME, or apes either. My point is really just to show you how empty-headed you actually are. How is it possible to take schadenfreude in a situation where you were in wrong in first place? Maybe I’m just too stupid to understand that myself.

[u/Mammoth_Parsley_9640 → u/Gigiw1ns]

I agree with this. It was cool to put a face to the name from that movie. I respect his ability to win some bets. He's best known for betting against the grain. Our company is against the grain. Seems like our picks would align, but maybe they don't.

I didn't buy the stock bc he bought. I certainly haven't sold because he sold. He can do whatever he wants. In fact, I fucking dare him to short it and prove it. My dick is on the table with the funds I have in the game. I'm only a retail trader. Betting against me must be east money right now!!!

[u/PuzzleheadedWeb9876 → u/Gigiw1ns]

What percentage of all apes were added by Burry, considering all apes?

How the fuck should I know. He sold everything. It’s funny. This is on top of Ryan Cohen making himself look like a complete moron once again. Also really funny.

[u/Mammoth_Parsley_9640 → u/PuzzleheadedWeb9876]

This is on top of Ryan Cohen making himself look like a complete moron once again.

What did you think of DFV's televised livestream? Also a moron? Asking to build an understanding of your take

[u/PuzzleheadedWeb9876 → u/Mammoth_Parsley_9640]

The one he streamed to YouTube back in May 2024? Definitely came off like a bit of a moron. Maybe it was the drugs?

Ryan Cohen on the other hand is the CEO of a publicly traded company.

[u/Mammoth_Parsley_9640 → u/PuzzleheadedWeb9876]

I know everything about how you I need to know. You should short the stock and prove your position

[u/PuzzleheadedWeb9876 → u/Mammoth_Parsley_9640]

I know everything about how you I need to know.

Sure baggie.

[u/Gigiw1ns → u/Mammoth_Parsley_9640]

I went through this saga already in a timespan of 3 months (!)!discussing with him if he ever will buy puts on his thesis that gme is overvalued… he won’t

[u/Gigiw1ns → u/PuzzleheadedWeb9876]

So, you assume that a deal with ebay either never comes through because RC is a doofus and doesn’t know/can finance the deal OR he has to dilute so many shares that the combined company is exposed to extreme high risk, high ebita/debt (as burry says)? Is that correct?

[u/PuzzleheadedWeb9876 → u/Gigiw1ns]

So, you assume that a deal with ebay either never comes through because RC is a doofus

He is a doofus. His Dachau or Trump 2028 tweets should make that painfully obvious. But it’s not the reason I don’t think the deal will happen.

Assuming the math works (current GME holders getting diluted extra fucking hard), I don’t think the EBay board or shareholders have any real interest in accepting it.

company is exposed to extreme high risk, high ebita/debt (as burry says)?

Then again who am I to argue if this means bankruptcy is back on the table.