Michael Burry has disclosed a position in videogame retailer GameStop GME.N, playing down the odds of another major short squeeze and likening its CEO, Ryan Cohen, to legendary investor Warren Buffett.

For Burry, whose prescient bet against the U.S. housing market before the 2008 financial crisis was chronicled in Michael Lewis's book "The Big Short" and its film adaptation, the bet signals renewed interest in the stock.

Burry had bought the stock in 2018 but sold his position weeks before the short squeeze of 2021 that made it the ultimate "meme stock" darling.

Here are five takeaways from Burry's analysis published on his Substack, "Cassandra Unchained", on Monday:

LIKELIHOOD OF MASSIVE SHORT SQUEEZE SLIM

Burry said the shares were unlikely to see a repeat of the explosive 2021 short squeeze, dismissing a core belief of GameStop's meme-stock loyalists.

"The value is not in another big short squeeze... which is not likely to happen. At least, the most commonly cited theories oriented to such an outcome do not amount to much for me," he said.

GameStop's shares surged more than 1,600% in January 2021 as retail traders banded together and forced bearish investors to unwind their bets.

STOCK IS A BET ON COHEN

GameStop's stock is largely a wager on Cohen's ability to turn the company's cash pile into growth opportunities, Burry said.

"Ryan is making lemonade out of lemons. He has a crappy business, and he is milking it best he can while taking advantage of the meme stock phenomenon to raise cash and wait for an opportunity to make a big buy of a real growing cash cow business."

He compared Cohen to Warren Buffett, who turned Berkshire Hathaway BRKa.N from a struggling textile business into an investment conglomerate.

"I think he (Ryan) is doing what Warren Buffett did and what I am doing. Essentially, waiting patiently. Unlike me, he is doing it with a public company, which, by all prior evidence, is very hard," Burry said.

COHEN'S COMPENSATION PLAN HINTS AT PLANNED ACQUISITIONS

Earlier this month, GameStop unveiled a compensation package worth about $35 billion for Cohen.

The plan, however, lays out lofty targets for the CEO, who would need to steer a significant shift and boost the company's market value more than tenfold.

"This is the deal I would want if I wanted more ownership, was sitting on a growing, giant pile of cash and planned a transformative acquisition or acquisitions," Burry said.

COLLECTIBLES MAY NOT BE ENOUGH

GameStop has struck partnerships with videogame publishers to sell exclusive versions of games, collectibles and merchandise to lure consumers to its digital and physical stores.

Last year, the company launched Power Packs, which are a collectible trading-card product and platform, and said demand was high.

Burry, however, said the real value of the business is elsewhere.

"I do not see Power Packs as more than a minor incremental driver of shareholder value, at best," he said.

STOCK IS PRICEY BUT ATTRACTIVE

Burry said he was paying a bit more for GameStop than the company's hard assets were worth, but he still saw an attractive risk-reward tradeoff.

"Being long GameStop is almost as asymmetric as it gets these days in U.S. common stocks," he said.

-Niket Nishant/Reuters