Michael Burry has exited his position in GameStop Corp., saying the retailer’s reported bid for eBay Inc. changed the investment case, according toBloomberg.
Burry wrote:“Wall Street does indeed mistake debt for creativity, and does so constantly. I of all people should have known.”
GameStop reportedly offered $125 per eBay share — a deal far larger than GameStop itself.
Burry's decision comes after a bizarre interview betweenGamestop CEO Ryan Cohen and CNBC yesterday morningthat deepened doubts around GameStop Corp.’s proposed $56 billion bid for eBay.
Andrew Ross Sorkin presses Ryan Cohen live on how GameStop$GMEcould realistically fund a potential acquisition of eBay$EBAYpic.twitter.com/vfOZutqiuh
In the 16-minuteSquawk Boxappearance, Cohen struggled to clearly explain how GameStop would fund a deal worth nearly five times its own market value.
Pressed by Andrew Ross Sorkin over a reported $16 billion financing gap,Cohen leaned on vague responses, pointing to the company’s website and repeating that the offer was “half cash, half stock.”
He noted GameStop had roughly $9.4 billion in cash and cited a financing letter from TD Securities for up to $20 billion, but failed to fully address how the numbers added up.
The interview grew more tense as CNBC hosts Becky Quick and Michael Santoli pressed Cohen on dilution concerns and the strategic logic behind the acquisition. Cohen argued the deal would help GameStop better compete with Amazon and said his incentives are tied to shareholder performance.
Clips of Cohen's pauses, evasive answers, and uneasy body language quickly spread online as shares fell and investors questioned whether the takeover bid was realistic.
Source: ZeroHedge News
