Michael Burry’s Bearish Bets: Scion Asset Management Quarterly Filing Reveals New Positions

In a recent quarterly 13-F filing, Michael Burry’s Scion Asset Management unveiled new bearish bets. The filing indicates that Burry’s firm is betting against a semiconductor stocks index and the company formerly known as Priceline.com.

Previously, Scion had put option positions tied to ETFs tracking the Nasdaq-100 QQQ and S&P 500 SPY. However, the filing shows that these positions have been closed out. These positions received significant attention from the financial press, particularly during a three-month period when U.S. stocks were on a decline.

While the latest bearish bets are not as large in scale as the previous ones, it is still noteworthy that Burry is betting against the iShares Semiconductor ETF. The filing reveals that Burry purchased 2,500 puts against Booking Holdings Inc. and 100,000 puts against the iShares Semiconductor ETF XSD.

Compared to Scion’s earlier purchase of 2 million put options against index-tracking ETFs during the second quarter, these new positions are relatively smaller.

This year, semiconductors have experienced significant growth due to the artificial intelligence boom, led by prominent player Nvidia Corp., often regarded as one of the most important U.S.-traded stocks currently.

The Potential Repercussions of a Stock Fall

Sub-heading: Examining the consequences of a potential 10% drop in a significant stock

Michael Burry, renowned investor and founder of Scion Asset Management, has recently made some notable adjustments to his portfolio, attracting attention from market watchers. One significant move was his decision to sell off shares of Geo Group Inc., a privately-held prison company, as well as Warner Bros. Discovery Inc., Vital Energy Inc., the Cigna Group, Signet Jewelers Ltd., MGM Resorts International, New York Community Bancorp, and several others.

Burry’s actions have raised curiosity, particularly about his holdings of put options. These options grant an investor the right, but not the obligation, to sell an underlying asset at a predetermined price within a specified timeframe (known as the strike price). They are commonly used for speculative purposes to wager on market downturns. However, they can also serve as hedging tools or be incorporated into broader investment strategies.

While news of Burry’s short bets has gained attention, he has remained silent on the matter. It remains uncertain whether he profited from his previous round of put options. Attempts to reach him for comment through the contact number listed in the filing have been unsuccessful.

It must be noted that the 13-F filing, which mandates hedge funds to disclose their long positions quarterly, may not provide a complete view of Burry’s overall portfolio. Nonetheless, his reputation skyrocketed following his astute bet against the U.S. housing market, which was brilliantly featured in Michael Lewis’s book “The Big Short” and later brought to life on the big screen with Christian Bale portraying Burry.