Michael Burry Posts Unseen 2019 Email From Keith Gill On GameStop — Reveals How The Company Responded To His Demands

• Burry had then pointed out that GameStop's trading volume exceeded its total shares outstanding for the third consecutive month.
• He had noted that because of these high trading volumes, GameStop could pull off a buyback with “elegance and stealth.”
• Between Burry’s initial email to GameStop in August 2019 and his response to Scion’s investors in March 2020, GME stock rose nearly 26%.

Michael Burry on Thursday posted an unseen email from Keith Gill, also known as “Roaring Kitty,” received in response to an open letter sent by the “The Big Short” legend to GameStop Corp.’s (GME) board of directors.

In an August 2019 email, Burry urged the company to announce a share buyback program, given his estimate of the cash the company had, according to his post on X.

He also noted that trading volumes for GameStop shares exceeded the company’s total shares outstanding for the third consecutive month, as of August 2019. Burry said that because of these high trading volumes, GameStop could pull off a buyback with “elegance and stealth.”

GameStop shares were up nearly 4% in Friday’s opening trade. Retail sentiment on Stocktwits around the company trended in the ‘extremely bullish’ territory at the time of writing.

Between Burry’s initial email to GameStop in August 2019 and his response to Scion’s investors in March 2020, GME stock rose nearly 26%.

Keith Gill’s Response

Gill, who was the driving factor behind the GameStop short squeeze in 2021, responded to Burry’s email, calling out the board’s inaction to the “absurdly low share price.”

“I’m a CFA charterholder with roughly 10 years of experience as an independent investor and I haven’t seen anything like this before,” he said.

Gill added that this kind of price action usually characterizes companies on their way to bankruptcy.

Burry’s Suggestions

In addition to asking the GameStop board to announce a share buyback program, Burry also gave the following suggestions:

• Reduce the size of the board.
• Halve the compensation to GameStop’s non-executive directors.
• Fill positions with people who have relevant experience.

“GameStop does not need ghosts of the past protecting a legacy of poor capital allocation and thin oversight at this point in time,” Burry said in a follow-up letter.

GME Board’s Response

While acknowledging that dealing with GameStop was complicated, Burry said the company heard him and reoriented its board largely along the lines of his suggestions.

“They wanted to make sure I knew I was heard. Pretty crazy vs what it took to get any changes during Scion Capital days,” Burry said.

He added that of the four board member resignations he suggested, three were followed through on, with their replacements having relevant experience. 

GME stock is down 28% year-to-date and 27% over the past 12 months.

Also See: Two Moves Trump’s ‘Cronies’ Made That Have Krugman Worried About 2008-Style Meltdown

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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