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Shares of GameStop have experienced a significant surge following an announcement from Michael Burry, a notable investor known for his role in “The Big Short.” Burry revealed that he has been acquiring shares of the popular video game and collectibles retailer.
Burry’s Investment Announcement
This revelation was made in Burry’s recent Substack post, where he stated, “I own GME. I have been buying recently.” He expressed confidence in his investment, suggesting that he is entering the market at a favorable valuation, potentially at 1x tangible book value and net asset value.
Impact on Trading Volume
Following Burry’s announcement, trading volumes for GameStop skyrocketed. As of noon ET, approximately 11.9 million shares had been traded, which is over six times the average for that time of day.
Surge in Short-Term Options
- Call options trading has more than doubled compared to the 20-day moving average.
- The most active call contracts have strike prices of $25, $24, $20, and $23, all expiring this Friday.
Nostalgia and Market Dynamics
GameStop’s stock price movements are often influenced by nostalgia and the popularity of gaming culture. Burry’s recent involvement adds a new dimension to its investor base, reminiscent of past figures like Keith Gill, also known as Roaring Kitty.
Comparisons Between Investors
Both Burry and Gill share a common interest in GameStop due to its perceived undervaluation and strong management under Ryan Cohen. Their investments reflect a broader trend where retail investors rally around stocks associated with pop culture and community engagement.
As the market reacts to Burry’s engagement, it remains to be seen how long this momentum will last and what impact it will have on GameStop’s future performance.
