‘Big Short’ Investor Bets on Alibaba and JD. Wall Street Agrees.

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Michael Burry, the investor whose bearish wager on the U.S. mortgage market before the 2008-09 financial crisis made him famous in the book and movie “The Big Short,” is betting on beaten-down Chinese tech giants

Alibaba Group Holding

and

JD.com
.

While his view on real estate ahead of the housing bubble was distinctly contrarian, Wall Street agrees with Burry’s bets this time.

Scion Asset Management, Burry’s investment firm, took a new position of 50,000 shares in

Alibaba

(ticker: BABA) via the company’s U.S.-listed American depositary receipts in the final three months of 2022, quarterly filings made on Tuesday showed. Scion also took a new position in

JD.com

(JD), buying 75,000 ADRs of the group. 

Burry didn’t immediately respond to a request for comment on the investments.

Burry’s stake in Alibaba is worth some $5.2 million as of Tuesday’s closing price, with the JD.com stake valued at more than $3.9 million.

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The high-profile investor isn’t alone in being bullish in these stocks, both of which have an average rating of Buy among analysts surveyed by FactSet.

Alibaba and JD.com have been beaten down over the past two years by regulatory crackdowns in both Beijing and Washington, D.C., as well as a slowdown in China’s economy amid last year’s Covid-19 restrictions.

Now, with Alibaba and JD.com trading well below their late 2020 and early 2021 highs, respectively, there’s an argument that the shares look cheap. And traders are turning bullish on Alibaba, at least, with the stock climbing more than 18% in 2023—beating the

S&P 500
—even as JD.com has lost 7% over the same period.

Given the Tuesday filing reflects the period ending Dec. 31, 2022, investors will have to wait until the current quarter’s disclosure to find out if Burry is holding on.

Write to Jack Denton at [email protected]