The original GameStop squeeze depended on extremely high short interest and a constrained float. After the company issued billions of dollars in equity and short sellers covered, short interest fell to roughly 9%, undermining the claim that another inevitable mother-of-all-short-squeezes remained embedded in the stock.

Original short interest may have reached 80% to 90%
GameStop substantially increased its share float
Many short sellers covered
Short interest later fell to about 9%

“So so now your short interest is nine percent. Like that's fairly low as as far as short interests go.”
Ricky Sandler · 37:39

“So you don't really have a thesis if your thesis is mother of you know, moass with rocket ships right.”
Ricky Sandler · 37:45

#gamestop#meme stocks#short squeeze#retail trading

Hot Take· 2

Hot Take19:51

The Bigger Market-Structure Shift Happened Inside Active Investing

Sandler agrees that passive ownership has grown dramatically but argues that the active side has changed just as consequentially. Bottom-up investors have been displaced by quant funds, pod shops, thematic strategies, systematic investors, and retail traders operating on shorter horizons.

Passive market share rose from roughly 25% to 60%
Today's active cohort is not dominated by bottom-up analysts
Many marginal price setters trade factors, themes, or short horizons
Daily price action often has little connection to company research

“But you know, our view is that markets are very different and the people setting prices over the short run are very different than they…”
Ricky Sandler · 20:01

“And so on most days the price action you see in a stock is being driven by somebody who is not doing bottoms up research.”
Ricky Sandler · 20:52

#market structure#passive investing#active management#price discovery

Hot Take38:30

Meme-Stock Trading Is Coordinated Price Action, Not Amateur Research

Sandler distinguishes modern meme-stock campaigns from the grassroots company research found on early internet message boards. He characterizes coordinated buying as an effort to initiate price gains that force short covering and attract momentum-sensitive investors, creating further price action.

Mobile access and free trading expanded retail influence
Modern campaigns can coordinate simultaneous buying
Rising prices can force shorts to cover
Price movement itself attracts additional buyers

“This is actually bullying. This is coordinated efforts to all come in and try to buy the stock at the same time.”
Ricky Sandler · 39:05

“And so we're going to create the price action that's going to create further price action.”
Ricky Sandler · 39:19

#meme stocks#retail investors#market manipulation#momentum

Explainer· 4

Explainer09:47

Inside Eminence Capital's 150/50 Alpha-Extension Portfolio

The 150/50 strategy maintains 100% net market exposure while adding a market-neutral sleeve with 50 extra points of long exposure and 50 points of shorts. Investors receive conventional market exposure plus two potential alpha sources: long selection and the long-short spread.

The portfolio is 150% long and 50% short
Net market exposure remains 100% long
The neutral sleeve adds another source of alpha
The product is designed as a long-equity replacement

“There's the alpha on our lungs what we would do if we had one hundred percent long portfolio, and then you add a fifty by…”
Ricky Sandler · 10:42

#alpha extension#portfolio construction#long-short#asset allocation

Explainer11:39

A Fee Structure That Charges More Only When Alpha Appears

Eminence's alpha-extension product charges a 50-basis-point fixed fee and 30% of returns above the MSCI World benchmark. Sandler presents this as alignment: clients pay a modest fee when the fund fails to outperform and share more generously when it produces substantial alpha.

The benchmark is MSCI World
The fixed fee is 50 basis points
The performance fee is 30% of alpha
The structure separates payment for beta from payment for skill

“So if we don't beat the market, you pay us a pretty low fee fifty basis points. If we crush the market, you pay us…”
Ricky Sandler · 12:05

“It's a fair sharing of fees and a good alignment.”
Ricky Sandler · 12:10

#fees#alpha#benchmarks#alignment

Explainer15:31

Three Ways Higher Interest Rates Improve the Short Opportunity Set

Higher rates restore meaningful discounting of distant profits, impose discipline on businesses that previously survived on cheap capital, and generate cash rebates on short proceeds. Sandler argues that these effects make valuation and fundamentals more consequential even though shorting remains operationally difficult.

Future earnings must be discounted at a nonzero rate
Higher capital costs discourage profitless competition
Business economics become more rational
Short proceeds can earn a meaningful credit rebate

“So now we have valuation is going to matter and fundamentals will start to come into play.”
Ricky Sandler · 17:00

“You know, we're getting five percent on our shorts, so you're getting paid to wait.”
Ricky Sandler · 17:07

#interest rates#short selling#valuation#cost of capital

Explainer24:40

How P&L Triggers Turn Narratives Into Forced Deleveraging

Narrative-driven portfolios are often paired with rigid loss limits. When performance deteriorates, managers cut risk regardless of whether the underlying thesis changed, amplifying moves caused by themes and positioning rather than fundamentals.

Short-term P&L can dictate portfolio changes
Platform managers may face automatic capital cuts
Forced deleveraging is backward-looking
Mechanical risk reactions amplify nonfundamental volatility

“And to your point, the add investing is also add with my P and L. If I start to lose P and L, I move”
Ricky Sandler · 25:28

“So that creates, on top of the narrative behavior that's almost trigger driven and exacerbates this volatility.”
Ricky Sandler · 26:32

#deleveraging#volatility#risk limits#pod shops

Story· 1

Story48:16

How a Passive Entain Investment Became a Board-Level Turnaround

Eminence initially viewed Entain as a strong strategic asset with weak management rather than an activist target. After concluding that leadership and capital allocation were substantially worse than expected, Sandler chose board involvement over selling and says the company subsequently improved leadership and decision-making.

Entain owns major international gambling brands
Eminence did not enter expecting activism
Weak leadership and capital allocation changed the calculation
The board appointed a new permanent CEO
Sandler describes the engagement as cooperative rather than combative

“We never go into a situation expecting to be activists.”
Ricky Sandler · 49:35

“What happens from time to time is you go into situation you think management's a B, maybe a B minus, and it turns out you're…”
Ricky Sandler · 49:39

#entain#activism#governance#turnaround

Tool· 1

Tool59:41

Turn Early-Career Contacts Into a Long-Term Knowledge Network

Sandler advises young professionals to cultivate relationships before they need assistance. He recommends staying in touch with useful notes, categorizing contacts, and preserving access to expertise that may become relevant years after the first meeting.

Record valuable contacts early
Maintain relationships without immediately asking for favors
Send relevant articles or updates periodically
Categorize contacts by knowledge and industry
Use the network to accelerate future research

“manage your rolodex really proactively.”
Ricky Sandler · 59:41

“don't just call them when you want something from them.”
Ricky Sandler · 1:00:38

#networking#career development#relationships#research

Takeaway· 6

Takeaway06:31

Why Downside Protection Creates Offensive Capacity

Sandler says the 1998 crisis exposed the weakness of superficial hedges and pushed Eminence toward single-stock shorting. Protecting capital during dislocations creates the financial and psychological capacity to buy when other investors are selling emotionally.

Light hedges failed during the 1998 crisis
Single-stock shorts became a core pillar at Eminence
Capital protection creates dry powder
Major dislocations can offer the best future return opportunities

“One of the things that I felt in ninety eight was the inability to lean into a dislocated market because we weren't protecting capital well…”
Ricky Sandler · 07:06

“One of the things I've seen throughout my entire career is that being offensive when there's dislocation, you are planting the greatest seeds possible.”
Ricky Sandler · 07:36

#shorting#risk management#dislocations#hedge funds

Takeaway27:12

Why Investors Keep Extrapolating the Last Successful Cycle

The 2000s favored long-short stock picking, while the post-2012 period rewarded passive exposure to the S&P 500. Sandler argues that investors repeatedly treat the latest regime as permanent even when rates and market conditions have changed.

Long-short strategies excelled during the lost decade
Passive equity exposure dominated the following cycle
Markets move through distinct phases
Capital allocators commonly extrapolate recent returns

“All this history has shown me is both markets go through cycles, and investors, whether you like it or not, are backward looking, return looking…”
Ricky Sandler · 29:05

“They rarely look forward.”
Ricky Sandler · 29:17

#market cycles#behavioral finance#long-short#indexing

Takeaway41:39

Three Billion Dollars Saved GameStop's Balance Sheet, Not Its Business

GameStop used renewed meme-stock demand to issue shares at prices Sandler considered far above intrinsic value. The cash sharply reduced bankruptcy risk, but he argues that it did not solve the structural decline of a mall-based retailer selling products increasingly distributed online.

The equity issuance raised roughly $3 billion
The company gained a long financial runway
Bankruptcy risk fell materially
The operating model still requires a successful reinvention

“They bought themselves a hugely. They could try anything they That company will not run out of money for the longest period of time.”
Ricky Sandler · 42:03

“That doesn't mean that. This is a successful business.”
Ricky Sandler · 47:57

#gamestop#capital raising#retail disruption#turnarounds

Takeaway51:20

Investment Committees Often Ask the Wrong Questions About Returns

Serving on the University of Wisconsin Foundation investment committee lets Sandler observe institutional allocation from the client side. He says sophisticated committees can still focus too heavily on historical returns without examining repeatability, cycle exposure, or the risk required to produce them.

Historical returns do not establish manager skill
Committees should examine how returns were produced
Repeatability matters more than headline performance
Cycle exposure and embedded risk require explicit evaluation

“Very sophisticated people coming together on committees looking backward looking returns often don't ask the rigorous questions about how did you deliver those returns?”
Ricky Sandler · 52:35

“Are they repeatable? Was this a cycle? How much risk did it take in there?”
Ricky Sandler · 52:45

#endowments#manager selection#asset allocation#governance

Takeaway55:25

The Longevity Playbook Is Simpler Than the Industry Makes It Sound

Sandler reduces much of modern longevity advice to movement, healthy eating, sunlight, strength training, meaningful work, and strong relationships. He highlights small routine changes, particularly replacing some cardio with strength work and spending more time walking outdoors.

Move regularly
Eat less and choose healthy food
Get sunlight and walk
Prioritize strength training
Maintain meaningful work and relationships

“Move, eat less and eat healthy, get sunlight, have meaningful work and meaningful relationships, some strength training Like that's it, you know”
Ricky Sandler · 55:28

“there's all this data and it's not that complicated”
Ricky Sandler · 55:41

#longevity#health#strength training#habits

Takeaway1:01:06

Ask Executives How They Think, Not What Next Year Will Be

Sandler says he learned not to take executive and board statements at face value because leaders have imperfect knowledge and personal incentives. He now researches the business independently and uses management meetings to evaluate judgment, capital allocation, motivation, and trustworthiness.

Executives may be biased, mistaken, or deceptive
Independent company research should precede management reliance
Management interviews should reveal thought processes
Capital-allocation judgment is more useful than precise forecasts
Short-term stock incentives can conflict with long-term business value

“I'll do my own research on the business. I'm not going to rely on you to tell me what the company is going to do…”
Ricky Sandler · 1:01:48

“I want to know how you think. I want to know how you allocate capital.”
Ricky Sandler · 1:01:54

#management#due diligence#capital allocation#incentives

Frameworks in this episode

Build Your Own Investing Compass

Mispriced Durable Business Framework

Overvaluation Plus Catalyst Short Framework

Price Action Is Opportunity Framework

Insights & moments

⚡Myth Buster· 1

Why the Original GameStop Short-Squeeze Thesis No Longer Fits

◆Hot Take· 2