Burry’s Scion sold all Gamestop shares in Q4 before GME went stratospheric, 13F filing shows.

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NEW YORK, NY - NOVEMBER

Back on April 10, 2020, Michael Burry, who gained fame as a major character in the book and movie The Big Short, filed a 13D on Gamestop Inc. (GME) disclosing that his fund Scion Asset Management, LLC owned 5.3% of GME’s outstanding shares. With GME then traded around $4, Burry disclosed he’d previously sent GME’s board several letters recommending an aggressive share buyback. No one, including Burry, could have foreseen that GME shares would surge as high as $483 in late January of 2021 due to an epic short squeeze, sparked by RC Ventures 13D/A filings then fully ignited by retail Reddit traders. Unfortunately for Burry, it appears Scion sold all Gamestop shares before GME went stratospheric.

Scion Asset Management first reported a position in Gamestop for Q4 of 2018. At that time, Burry bought 536,862 shares at a cost estimated by WhaleWisdom to be $12.62. He added to the position in Q1 of 2019. But the the fund reported selling its entire 650,000 share position during the second quarter of 2019, losing possibly at much as 50% on the trade.

Source: WhaleWisdom.com

Scion sold all Gamestop shares in Q4. Did Burry leave $1B on the table?

However, in an abrupt turnaround, Burry bought 3,000,000 GME shares during Q3 of last year, making Gamestop Scion’s #1 holding. Then, in a 13D filing — a first for the publicity shy money manager — Burry sent a letter to the the board of directors of Gamestop, urging the Board to direct a $300M repurchase authorization. At the time, GME had a market cap of around $310M.

On Jan. 27, 2021, the closing market cap of GME was about $24.2 Billion. If Burry’s Scion sold all Gamestop shares on that day, the fund’s profit could have been in the neighborhood of $343 per share — possibly a $1B profit for a fund with recent AUM of about $390M.

But, according to today’s 13F filing, Burry sold all GME shares during Q4 of 2020 that ended on December 31. GME closed at $18.34 on that date.

When an astute value investor like Burry sells Gamestop below $19, what does that imply about the true private/business value of GME?

Of course, no one — including the guy who foresaw the implosion of subprime mortgages prior to the great financial crisis — could have predicted the insane surge of Gamestop in January of this year. Foreseeing such an event would be the equivalent of forecasting the winning numbers for Powerball.

Scion sold all Gamestop shares in Q4 at prices that likely represented a three or four bagger for GME. Burry did what value managers are paid to do — buy cheap and sell dear.

Speculators should take note: When an astute value investor like Burry sells GME at prices below $19, what does that imply about the true private/business value of Gamestop Inc?

Scion Asset Management Q4 2020 13F Portfolio

Company SymbolShares HeldMkt Value% of PortfolioPrev % of PortfolioRankChg Shares% ChangeQtr 1st OwnedEst Avg Price PaidRecent PriceSourceSource DateDate Reported
Citigroup  C(CALL)539,600$33,272,00014.811539,600NewQ4 202063.6313F12/31/202/16/21
Pfizer  inc.PFE(CALL)844,300$31,079,00013.834.632405,20392%Q3 202034.7213F12/31/202/16/21
Kraft heinz KHC(CALL)589,700$20,439,0009.13589,700NewQ4 202035.3913F12/31/202/16/21
Centurylink incLUMN1,150,000$11,213,0004.992.444350,00043%Q3 20209.9911.7813F12/31/202/16/21
Now incDNOW1,500,000$10,770,0004.7951,500,000NewQ4 20207.1810.3313F12/31/202/16/21
Rpt realtyRPT1,000,000$8,650,0003.852.226350,000-25%Q3 20205.4410.5913F12/31/202/16/21
Uniti group incUNIT725,000$8,504,0003.783.197275,000-27%Q2 20209.7812.9913F12/31/202/16/21
Western digital corpWDC150,000$8,309,0003.72.778100,000-40%Q3 202036.5565.5713F12/31/202/16/21
Allstate corp ALL75,000$8,245,0003.672.57915,000-16%Q3 202094.14104.4313F12/31/202/16/21
Qurate retail group QRTEA700,000$7,679,0003.422.3910400,000-36%Q3 20207.1813.1313F12/31/202/16/21

Scion’s Top New Buys in Q4 2020.

SymbolSharesMarket Value% of PortfolioRank  ChangeEst Avg PriceRecent Price
C(CALL)539,600$33,272,00014.811New63.63
KHC(CALL)589,700$20,439,0009.13New35.39
DNOW1,500,000$10,770,0004.795New7.1810.33
WFC250,000$7,545,0003.3611New30.1833.53
GEO845,152$7,488,0003.3313New8.868.84
TAP150,000$6,779,0003.0215New45.1944.01
CXW1,000,000$6,550,0002.9216New6.557.73
HFC250,000$6,463,0002.8817New25.8531.75

Scion’s Top Sales in Q4 2020

StockSymbolTypeShares HeldPrevious % of PortfolioRankingChange in sharesChange TypeQtr first ownedsource_datesource_typeAvg PriceRecent Price
Gamestop corp.  class aGME 05.2609% -1,703,400soldallQ4 201813F12/31/20205.0852.4
Alphabet inc. class cGOOGCALL017.7989% -40,000soldallQ2 202013F12/31/2020 2104.11
Cvs health corp. (melville shoe)CVSCALL08.1712% -462,100soldallQ3 202013F12/31/2020 74.21
Goldman sachs group incGSCALL04.4785% -73,600soldallQ2 202013F12/31/2020 306.32
Facebook incFB 03.965% -50,000soldallQ1 202013F12/31/2020261.9270.5

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