Beijing: Michael Burry, the money manager made famous in the Big Short, has added to wagers on Chinese tech giants Alibaba Group Holding Ltd and JD.com Inc in recent months even as a rout in Chinese shares deepened.
Alibaba is now Scion Asset Management’s top holding after Burry’s investment company boosted its stake in the eCommerce giant by 50% in the period ended Dec 31, according to the firm’s most recent 13F filing.
While the stake was only US$5.81mil, it’s a starkly contrarian bet on China’s largest online retailer.
Smaller rival JD.com Inc was Scion’s second-biggest holding at US$5.79mil after the firm increased its position by 75,000 shares.
So far the wagers are struggling to pan out. Alibaba is down 5% year-to-date and JD.com has tumbled almost 20% as global money managers unwind positions in Chinese stocks amid an ongoing property crisis and slowing growth.
It’s not the first time Burry, who rose to fame predicting the 2008 US housing crash, has bet on the companies.
At the end of 2022 he snapped up shares of New York-listed Alibaba and JD.com as China was emerging from the pandemic.
He ended up closing out his positions in the second quarter of 2023, only to reopen it months later.
As of Tuesday, some US$6.5 trillion of market value had been wiped out of Chinese and Hong Kong stocks from a 2021 peak, underscoring the challenge that Beijing faces as it seeks to arrest a decline in investor confidence.
Foreign investors have been relentlessly selling China’s onshore equities in the new year. Global funds offloaded 14.5bil yuan worth of shares on a net basis in January via trading links with Hong Kong, extending their selling to a record sixth month, according to data compiled by Bloomberg. — Bloomberg