Michael Burry Exits Alibaba Stake, Citing Overvaluation Before Huge Share Sale
The 'Big Short' investor sold his Alibaba position before a $10.2 billion share sale, calling the stock too expensive.
Michael Burry, the contrarian investor made famous by his prescient bet against the U.S. housing market ahead of the 2008 financial crisis, disclosed that he has exited his position in Chinese e-commerce giant Alibaba, describing the stock as overpriced. The move came ahead of a massive $10.2 billion share sale by the company — a timing that underscores Burry's long-standing reputation for identifying inflection points before they become apparent to the broader market.
Burry's decision to label Alibaba pricey is notable given that the stock has faced persistent headwinds, including regulatory pressure from Beijing, slowing domestic consumption in China, and intensifying competition across its core businesses. By stepping away ahead of the large-scale share offering, Burry appears to have anticipated the dilutive pressure such a capital raise typically places on existing shareholders.
Read more AI Hardware Surges as Adobe and Palantir Slide: What It Means →
The $10.2 billion share sale represents one of the more significant equity transactions in the tech sector in recent memory, and its scale alone would likely weigh on Alibaba's valuation in the near term. Investors often interpret large secondary offerings as a signal that insiders or stakeholders see limited near-term upside, making Burry's exit all the more pointed in retrospect.
Burry, who runs Scion Asset Management, has periodically taken positions in beaten-down or misunderstood assets — and his willingness to reverse course when valuations shift reflects the disciplined, thesis-driven approach that defines his investment style. His departure from Alibaba suggests he no longer sees an adequate margin of safety at current price levels, a core principle drawn from the value-investing tradition.
Continue reading at Yahoo Finance
