Is Michael Burry Going to Supercharge GameStop Stock Again in 2026?

Michael Burry resurfaced with a candid confession that could reignite interest in GameStop (GME). The legendary investor behind The Big Short revealed on his Substack post that he sold his entire GameStop position in late 2020, missing the epic January 2021 short squeeze by mere weeks. Burry held roughly 3 million shares of GME with a cost basis of around $3.32 but exited as the stock hit the mid-teens, leaving a potential billion-dollar windfall on the table.

Now he's circling back. In his detailed post titled “GameStop, The Prequel,” Burry provided a technical breakdown of what he called the only “legal market corner” he's ever witnessed, explaining how retail traders used a gamma squeeze to force market makers into panic buying. 

Burry teased a forthcoming analysis of GameStop as an investment today, noting the company now has $8.8 billion in cash, significant free cash flow, and a revamped business model under Ryan Cohen's leadership. Valued at a market cap of $9.9 billion, GME stock is down 27% in 2025. Notably, it has a short interest of 15%, which means short sellers hold 15% of the total outstanding shares. 

Burry describes it as roughly similar to his 2018 thesis, but with all the numbers ten times bigger and Cohen running the show. The question investors face is whether Burry's renewed attention signals another significant move or simply an autopsy of what might have been.

Is GME Stock a Good Buy Right Now?

In fiscal Q3 of 2026 (ended in October), the video game retailer reported an operating income of $41 million, compared to a $33 million loss in the year-ago period. Its net income rose from $17 million to $77 million in this period. Importantly, GME ended Q1 with almost $9 billion in cash and marketable securities, up from $4.6 billion a year ago. 

The turnaround stems from aggressive cost-cutting and strategic repositioning. Selling, general, and administrative expenses fell to $221 million from $282 million year-over-year (YoY), a 21% reduction that drove margins higher. 

GameStop continues to offload underperforming international operations, exiting Canada and France after previously winding down operations in Germany and Italy. These moves reduced the store footprint but improved profitability across remaining locations.

In fiscal Q3, sales fell to $821 million from $860 million in the prior year as the product mix shifted toward higher-margin products. For instance, the collectibles segment now accounts for 31% of sales, compared to 20% in the year-ago period, while traditional software sales fell to 24% from 32%. This pivot toward higher-margin pop culture merchandise reflects Cohen's strategy to diversify beyond cyclical game releases.

Over the last nine months, GME stock has generated $410 million in free cash flow, which can be deployed across multiple growth initiatives. GameStop's balance sheet has created a war chest for potential acquisitions or investments. The company also holds $519 million in Bitcoin (BTCUSD), making it one of the largest corporate holders of the cryptocurrency. This bet adds volatility but aligns with Cohen's tech-forward vision.

The convertible debt issued during the quarter includes warrants that could dilute shareholders if the stock price rises, a detail that tempers the bullish case. Meanwhile, short interest remains elevated enough that any positive catalyst could trigger another squeeze.

Michael Burry's recent commentary describing GameStop as having optionality through its convertible debt structure and massive cash position while operating as a melting ice cube captures the investment dilemma perfectly.