Michael Burry is bullish on a stock that could be the next big short squeeze.
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Build-a-bear is not a poster child of the bull market, but Michael Burry likes the stock.
“The Big Short” investor said the company has defied death to come back numerous times.
He sees the stock as an undervalued growth play despite its struggles over the past year.
Michael Burry is bullish on bears.
“The Big Short” investor famous for betting against the housing market before 2008 has been making the case for Build-A-Bear Workshop for a while, and he’s freshened up his thesis this week.
The stuffed animal chain, often viewed as a relic of a bygone era when people still flocked to shopping malls, has seen its stock more than halved in 2026. Yet, Burry is defiant, calling for the company to make a comeback
“This left-for-dead retailer has nine lives,” Burry wrote on his Substack this week. “The GFC tried to kill it, then smart devices tried to make you ignore it. Now AI is trying to hide it. And once again the consumer is weakening and trading down on discretionary.”
Burry first discussed his Build-A-Bear thesis in an August, revealing a long position in the toy retailer. In his updated analysis on Thursday, he noted that if the stock does have nine lives, it currently has five left.
Build-A-Bear stock has been battered this year, but it’s posted decent growth over the past five-year period. For a time in 2023, the stock was outperforming Nvidia .
Its fortunes really turned this year, though. Yet, Burry said the stock is well-positioned for a short squeeze, framing it like a classic meme-stock trade.
“It’s a perfect storm for Build-A-Bear, a one-of-one retailer now heavily shorted, 25% of the float, almost 9 days to cover,” he stated. “It does not get more discretionary, so it might seem. The stock hit $1.80 in the COVID panic. Soared over $75 last year, now languishes around $25.”
Burry was also bullish for a time on the market’s most famous meme stock, GameStop , though he’s since confirmed that he’s exited his position.
Build-A-Bear may appear similar in profile but Burry’s analysis highlights a company that he sees as having genuine growth potential. He praised the company’s “decade-long effort to refresh and refocus” its sales, noting that by many metrics, the strategy has been successful.
“Today, Build-A-Bear [has] 662 locations across 37 countries with 129 of them new in the last two years,” he stated. “The growth as increasingly come from formats such as wholesale/partner and small format/concourse that cost the company almost nothing in terms of capital.”
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