Michael Burry, the investor made famous by “The Big Short,” has added one of retail’s most dismissed names to his portfolio.
In a Thursday morning post on his Substack, Cassandra Unchained, Burry said he rates Build-A-Bear Workshop Inc. (NYSE:BBW) a full 6% position in the low-to-mid $20s. He called the stock a “fat pitch” on valuation at $25.
Burry argued a buyout at 10x EBITDA would put the stock around $60 to $65 per share. Shares trade near $25, down from a closing high of $75.85 in September 2025.
- BBW stock is climbing. See the chart and price action here.
Cheap by Almost Any Measure
Build-A-Bear trades at roughly 7x estimated 2026 earnings of about $3.50 per share, according to Burry. The company carries no financial debt, trades below 4x EBITDA and sits at less than 2x tangible book value. Its market cap is under $300 million, against EBITDA of roughly $80 million.
Burry compared the stock with toy wholesalers, which trade at up to 15x earnings despite weaker margins and returns on capital.
He also pointed to Pop Mart International Group Ltd. (HKEX:9992), which sells plush collectibles to adults and trades above 30x earnings. Build-A-Bear says teens and adults now make up 40% of its buyers.
A Different Company
Burry described a business rebuilt over more than a decade. In 2012, about 20% of stores lost money and 85% sat in traditional malls.
Management shortened leases, moved into tourist sites and small “concourse” stores, and signed partners such as Carnival Corp. (NYSE:CCL) and Landry’s, which pay for their own buildouts.
By 2021, at least 97% of North American stores were profitable, according to Burry. Maintenance capital spending now runs under $10 million a year.
Capital returns have been heavy. Buybacks and dividends from 2022 through 2025 total more than half the current market cap, and the share count has fallen 25% from its 2021 peak. Another $40.5 million remains authorized, or roughly 13% of the company at current prices.
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The Bear Case Is Real
Burry acknowledged the near-term pain. Second-quarter revenue fell 7.2% to $115 million, comparable store sales dropped 9.5% and gross margin slipped 335 basis points.
Management cut full-year guidance for the second time this year, and the loss of a Walmart Inc. (NYSE:WMT) program erased growth in the commercial segment.
Tariffs on a supply chain concentrated in China and Vietnam have also weighed on results. New CEO Chris Hurt, who took over in June, has not bought shares in the open market, and Burry warned a “kitchen sink” quarter could still be ahead.
Sizing the Bet
Burry said investors already heavy in consumer names should keep the position smaller. His own portfolio holds Deckers Outdoor Corp. (NYSE:DECK), Lululemon athletica inc. (NASDAQ:LULU), Sprouts Farmers Market Inc. (NASDAQ:SFM) and Birkenstock Holding plc (NYSE:BIRK).
He expects a couple more rough quarters from Build-A-Bear. Still, Burry sees parallels to 2000 through 2005, when bombed-out retail stocks turned into some of the market’s best performers.
Short sellers hold 26.68% of the BBW float, according to Benzinga Pro. Good news could move the stock fast.
BBW Stock Price Activity: Build-A-Bear stock was up 8.68% at $27.35 on Thursday, according to Benzinga Pro market data.
Photo: Shutterstock
