Michael Burry liquidated his entire GameStop position after the company’s unsolicited $55.5 billion bid for eBay pushed projected leverage to 7.7× debt/EBITDA, well above his 5× limit. He warned that excessive debt undermines the ‘Instant Berkshire’ thesis he had publicly championed, citing survivors like Wayfair, Carvana and Bath & Body Works.

GameStop’s market capitalization of about $12 billion contrasts sharply with the $55.5 billion purchase price. A $20 billion financing commitment from TD Bank leaves a substantial funding shortfall and has prompted management to highlight potential equity issuance as a way to bridge the gap.

Shares declined roughly 10% on the news, reflecting investor skepticism over the deal’s viability given the acquirer’s smaller size and high leverage. The sell-off underscores pressure on leadership to clarify funding plans and reconsider strategic alternatives if debt levels prove unsustainable.