In a recent interview with Barron’s this week, investor and hedge fund operator Michael Burry said that he would be “going long” on GameStop shares. Michael Burry is best known for his depiction in The Big Short, which details his wild successes betting against subprime mortgages. The book was adapted to film in 2015 and stars Christian Bale as Burry. GameStop saw shares jump more than 18% following Burry’s comments.

GameStop suffered this year, losing approximately 72% of its value and failing to find a buyer. This week also saw GameStop implement a wave of layoffs, including a large number of their editorial staff at Game Informer.

During their interview, Burry told Barron’s Tae Kim that GameStop’s “balance sheet is actually in very good shape.” He added, “I believe they will have the cash flow to justify a much higher share price.”

Burry’s firm Scion Asset Management, which now owns 3% of “shares outstanding” in GameStop, sent a letter to GameStop’s Board that encouraged the the company to “fully execute the $237.6 million remaining on its current $300 million share-buyback authorization,” meaning the company should use its cash on hand to buy back that stock. “Technical factors driving the stock to lows has created an opportunity for substantial buybacks at below private market prices,” Burry explained to Barron’s.

The streaming narrative dovetailing with the cycle is creating a perfect storm where things look terrible. It looks worse than it really is.

Although the common wisdom seems to be that digital sales are negatively affecting GameStop and the retail environment, Burry sees something others aren’t. With both Sony and Microsoft preparing to debut next-generation consoles to the retail market around the holiday 2020 season, Burry believes GameStop will bounce back from their current slump. Both the PlayStation 5 and Microsoft’s “Project Scarlett” consoles will be outfitted with drives and support physical media.

Burry added that 90% of GameStop’s approximately 5,700 retail stores are “free-cash-flow positive,” explaining that in earlier video game console cycles, its free-cash flow downturned in the last year before “rebounding smartly the following years.” Burry told Barron’s that he thinks 2019 will be “the bottom for this cycle.”

In July of this year, GameStop CEO George Sherman stated that he was “looking forward to putting the company through a large transformation” and GameStop has partnered with “global innovation design firm” R/GA to refine GameStop retail stores and give them a “unique layout and purpose.” These new concept stores would target specific interests like competitive gaming or retro gaming.