GameStop (GME - Get Report) shares jumped more than 11% Thursday after Barron's published a report in which famed investor Michael Burry said that he is long the video game retailer despite the stock's 75% decline over the past 12 months.
Burry said he believes that GameStop's "balance sheet is actually in very good shape," and that "they will have the cash flow to justify a much higher share price," according to Barron's.
"Technical factors driving the stock to lows has created an opportunity for substantial buybacks at below private market prices," Burry said. The money manager said he holds about 3 million shares of the company through his investment firm, Scion Asset Management.
One of the things that Burry expects to help drive up the stock price is the remaining $237 million left on the company's stock buyback program.
"Given the market capitalization of GameStop at $290 million at the close on August 15th, completing the authorization would retire over 80% of GameStop's outstanding shares. Depending on the timing and quality of execution, such a repurchase would increase earnings per share dramatically - far more than any other possible action on a per share basis," Burry told Barron's.
Burry was one of the first investors to short subprime mortgages ahead of the financial crisis and was depicted by Christian Bale in the movie "The Big Short."
GameStop shares rose 11.6% to $3.95 on Thursday.
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