Though best known for his role in ‘The Big Short,’ the Michael Burry bet that has been drawing the bulk of attention – at least after he abandoned his 2023 wager against the semiconductor industry – has actually been a long position.
Two of the famous investor’s biggest positions, according to the latest available portfolio data, are two Chinese companies – JD.Com (NASDAQ: JD) and Alibaba (NASDAQ: BABA) – with the latter so far proving to be of significantly more interest.
In fact, shortly after Burry acquired the stock in the third quarter of 2023, BABA experienced a major price decline, leading to ‘The Big Short’ investors being hundreds of thousands of dollars in the red on the bet.
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Still, recent months brought multiple tailwinds to Alibaba, meaning that, should the upcoming 13-f filing prove Burry’s has been playing the long game with the Chinese e-commerce and technology giant – a likely scenario given he acquired an additional 25,000 shares in the final trimester of 2023 – he may yet make it big with the investment.
Has the big BABA long paid off?
The first news carrying the potential to help BABA skyrocket in the stock market came late in 2023 with the news that the company’s cloud team is getting reshuffled to better take advantage of the artificial intelligence (AI) boom.
Its potential was, however, severely dampened when the multi-year Chinese stock market slump rose to a fever pitch in January 2024, and, indeed, the government intervention to stabilize the stocks gave Alibaba shares a second find.
Finally, given how investors and traders tend to react to such news, an announcement of a massive stock buyback plan early in April appeared like it will give BABA a major boost – and it did, albeit only briefly.
Ultimately, however, though the technology giant’s stock has been climbing in the last 2 weeks, its Q4, 2023 drop proved significant enough that Burry’s bet is still in the red given that the lowest price he could have acquired his original 50,000 BABA shares was near $83 while Alibaba price today stands at $80.33.
This meant that, at best, Michael Burry remains approximately $130,000 down on his original purchase rather than being up on his BABA bet.
The current state of 25,000 BABA shares acquired in the last quarter of 2023 is more difficult to gauge given that it is equally possible he bought them early in the trimester – in which case he’d be substantially in the red – and that he made the investment toward the end of the year – in which case he’d be significantly in the green.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
