‘Big Short’ Investor Michael Burry Sells All Alibaba Shares, Says He'll Reconsider If Stock Halves

Investor Michael Burry, famous for his prescient bet against the U.S. housing market before the 2008 financial crisis, has divested his entire stake in Chinese e-commerce giant Alibaba. Burry, who had only recently invested in Alibaba in April, announced his decision via his Substack newsletter.

Burry stated he would only regain interest in Alibaba if its stock price were to drop by half. His decision comes as Alibaba plans to issue new shares valued at over $10 billion (approximately 80 billion Hong Kong dollars) to fund its expansion in artificial intelligence (AI).

"I can't support the new share issuance," Burry wrote, also predicting a continued decline in Alibaba's return on invested capital (ROIC). He noted that Alibaba's net profit decreased by 75% in the quarter ending June, despite increased capital expenditure on AI, raising investor concerns about future returns.

Instead of Alibaba, Burry has shifted his focus and made a "substantial" investment in Alibaba's competitor, JD.com. Alibaba's stock has seen a downturn, with its U.S. listed American Depositary Receipts (ADRs) falling 18.6% year-to-date, and its Hong Kong-listed shares down 13.9%.