Ryan Cohen spent Sunday evening (May 3) announcing a $55.5 billion bid for eBay. By Monday night (May 4), a credible investor in the corner of GameStop had sold all the shares he owned.
Michael Burry did not go quietly. He explained exactly why. And his words should be read carefully.
What Burry has to say about GameStop on Substack
“I sold my entire GME position,” Burry wrote in a Substack post Monday evening, according to CNBC. “Any way I cut it, the thesis at Instant Berkshire has never been consistent with more than 5x debt/EBITDA, it’s never been okay with less than 4.0x leverage.”
He closed with a line that will follow this agreement for a long time. “Never confuse credit with creativity,” Burry wrote, CNBC confirmed.
A fund manager buys and sells
He also challenged strategic logic directly.
“Ryan will not go after the fat he will cut, as long as there is no fat cut to make this deal work,” he said, according to the Sherwood News.
The post represents the first time Burry has fully sold a position since launching his Substack.
What was the “Instant Berkshire” thesis.
To understand why Burry’s exit is important, you have to understand what he was buying in the first place. In January, Burry revealed that he was stockpiling GameStop shares and openly compared Ryan Cohen’s money allocation approach to Warren Buffett’s early Berkshire Hathaway playbook, according to MarketDash.
Patient, opportunistic, and powered by a growing pool of money rather than a loan.
Burry called that thesis “Instant Berkshire.” The idea was that Cohen would raise money gradually, make strategic acquisitions, and build a strong business without stretching the balance sheet.
That was the version of GameStop Burry believed in. That’s not the version Cohen announced Sunday night.
eBay’s $55.5 billion offering from a company with a market cap of about $12 billion is not a share of patient money. A strong bet. And Burry’s calculations of what that bet is actually worth are wrong: at $125 per share, the deal would squeeze an estimated 7.7 percent debt-to-EBITDA ratio, a level Burry described as “borderline depressed,” according to CNBC.
Why the available statistics bother Burry
Burry’s point is not just that he doesn’t like debt. It’s because you believe that top companies are missing out on something that makes them competitive. “The potential effect of a high price sees leverage rising to 7.7x, a debt level that borders on distressed people and tends to rob competition and innovation from distressed companies,” he wrote, according to Stocktwits.
He cited Wayfair, Carvana, and Bath and Body Works as cautionary examples of companies that have survived extreme profitability.
“These are the survivors. There are few,” he wrote, the Sherwood News noted. Burry also said he would have preferred GameStop to go after Wayfair, which he described as an ideal target with the infrastructure for last-mile delivery and cash flow.
He also expects Cohen’s $125 bid to be just the opening number. Burry believes eBay’s board will reject the original offer and that the revised deal will touch $65 billion, according to Stocktwits. That would strain GameStop’s finances even more than the current proposal.
How GameStop stock is reacting
Shares of GameStop fell nearly 10% on May 4 following eBay’s announcement, according to CNBC. That’s GameStop’s biggest intraday drop in 10 months, according to Stocktwits. The market was not celebrating Cohen’s wish. It was a price for the risk that came with a company about one-fifth the size of eBay trying to take it on.
Cohen addressed financial skepticism in a CNBC interview Monday, saying GameStop has flexibility in issuing equity. Burry’s response to that draft, embedded in his Substack post, is referenced. He described the way housing markets operate behind bids as “pedestrian,” not intelligence, the Sherwood News confirmed.
Key statistics from Burry’s exit and the GameStop-eBay situation:
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Burry’s definitive exit statement: “I sold my entire GME position,” the first complete sale since the launch of Substack, according to CNBC.
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Burry’s leverage threshold: never corresponds to more than 5x debt/EBITDA or less than 4.0x interest, CNBC confirmed
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The estimated valuation is $125 per share: about 7.7x debt to EBITDA, which is borderline depressed, according to Stocktwits.
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The revised estimate for Burry’s deal: $65 billion if eBay’s board rejects the opening bid, Stocktwits said.
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GameStop’s market cap at the time of filing: about $12 billion, according to Yahoo Finance
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GameStop stock down Monday: nearly 10%, biggest one-day drop in 10 months, Stocktwits confirmed
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Another of Burry’s preferred targets: Wayfair, which he said offers the infrastructure for last-mile delivery and cash flow without the same risk, according to the Sherwood News.
What does this mean for Ryan Cohen’s credibility
Burry was not just a shareholder. He was the most reliable institutional voice in the bullish camp. His January thesis gave GameStop the legitimacy that set it apart from the meme-stock story. A prominent short-seller-turned-value-investor running GameStop as a Berkshire-style conglomerate was a story the market could tell with a straight face.
That story ended Monday night. Burry’s exit doesn’t kill the eBay deal. But it removes the intellectual scaffolding that made GameStop look like a value proposition instead of a speculative vehicle. Cohen must now make a case for his bid without the backing of an investor whose vision clearly endorsed his leadership.
The more difficult issue is what Burry’s outline reveals about the bid itself. If the most modestly priced investor who believed in Cohen’s theory concluded that this particular contract crossed a line that could not be crossed in upside, the question for the remaining shareholders was whether they shared that line or were willing to follow Cohen over it. The answer to that question will shape how this story ends.
Related: Michael Burry buys beaten-down mega tech stock
This story was originally published by TheStreet on May 5, 2026, where it appeared first in the investing category. Add TheStreet as a favorite source by clicking here.
