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Here’s how much Michael Burry is down on his Alibaba bet

Here’s how much Michael Burry is down on his Alibaba bet

Michael Burry made a name for himself by making a bet of a lifetime after successfully foreseeing the 2008 financial crisis and became a household name after the release of ‘The Big Short’ film depicting the events.

After successfully shorting the housing market a decade and a half ago, Burry has been an intermittently active investor, and to this day, his portfolio holds several well-performing gems with the potential to skyrocket even higher.

One investment has, however, been mostly contentious – the Chinese technology giant Alibaba (NYSE: BABA, HKG: 9988) – and so far, Burry has mostly been losing money on the $4.3 million purchase.

Burry down $650,000 on Alibaba investment

Since Michael Burry bought 50,000 BABA shares in the third quarter of 2023 for approximately $86.74 a piece, the stock has generally been on a decisive downtrend. 

In fact, the Chinese firm has declined as much as 21.84% in the last 6 months. The stock’s performance has also been underwhelming in 2024 as, despite several rallies – particularly on news of government aid packages for the ailing market – it is 1.50% in the red year-to-date (YTD).

Alibaba also took a stock market beating on the latest full trading day, February 7, after its most recent earnings report failed to impress and, after briefly surging at open, ended the day having fallen 5.87%.

BABA 1-day price chart. Source: Finbold

Given that Burry bought his 50,000 Alibaba shares for $86.74 each, his loss on the investment so far amounts to approximately $650,000. On February 7 alone, he is down about $220,000.

A bullish outlook for BABA?

While Alibaba hasn’t been performing well since Burry bought its stock, the future might still hold a chance for the investment to turn into a winning bet. The tech giant’s decline has been largely in line with the broader crisis the Chinese stock market has been experiencing – a decline that the country’s government has pledged to tackle.

Indeed, while the East Asian country’s stocks are not yet out of the woods, investors reacted positively to the government’s approach, and all major indices – and CSI 1,000 – had a major 1-day rally. Furthermore, the uptrend appears to have been sustained since giving the impression that the crisis that already wiped more than $6 trillion in just three years might be entering its final act.

Additionally, amidst the turmoil, Alibaba entered into an extensive restructuring process late in 2023 with the goal of focusing more on providing extensive cloud services with a mind to support and benefit from the ongoing artificial intelligence (AI) boom.

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