Michael Burry Stock Pick Down 20% - I'm buying more

I doubled down on this Michael Burry stock pick today as the valuation has fallen 20% on an earnings report. I think the market is too short-sighted and results in 2023 and beyond will continue to improve. The stock is priced like it is going to go bankrupt, and I think that is further from the truth.

• The stock is down 20% today on earnings

• Cash from operations was the highest it has been in all of 2022

• Free cash flow was generated and cash added to the balance sheet

• Management is forecasting a dramatic return to free cash flow in 2023 as the turnaround plan is well underway

• Additional asset sale of $184 million in Q1 2023

• $300-500 million of working capital tailwinds in 2023 will benefit the balance sheet substantially

• Corporate headcount has been slashed by 400 and we will see a $60 million run-rate benefit with $50 million starting in 2023

• Lower shipping costs will be a major tailwind for margins and revenues in 2023

• Capex will be lower in 2023 from 2022, which will further drive free cash flows

• With revenues flat to 2022, a dramatic decrease in inventory promotions, continued working capital monetization, corporate cost cutting and a major asset sale in Q1 2023, 2023 is setting up to be a cash generative year

• There is enough cash on the balance sheet to take out all near-term maturities. If my forecasts for 2023 are directionally correct, there is minimal risk of bankruptcy, despite the market implying differently

• The company continues to hold substantial real estate and could continue to execute sale leasebacks to de-lever further

• Michael Burry continues to hold the name, making it one of his largest publicly owned positions.