Bloomberg Risk Takers
- Michael Burry bet against Cathie Wood's Ark and Elon Musk's Tesla last quarter.
- "The Big Short" investor surprisingly added a technology SPAC to his stock portfolio.
- Burry bought Discovery stock and Walmart call options, and sold his stake in Occidental Petroleum.
- See more stories on Insider's business page.
Michael Burry bet against Cathie Wood, increased his wager against Elon Musk, and unexpectedly invested in a technology SPAC in the second quarter, a portfolio update revealed this week. He also switched out most of his holdings, dumping the likes of Occidental Petroleum and Meredith for Discovery and Walmart.
Burry's Scion Asset Management purchased bearish put options on 235,500 shares of Ark Innovation ETF, Wood's flagship exchange-traded fund. The position signals that Burry is deeply skeptical of the ETF's holdings, which include Tesla, Coinbase, and Zoom.
Scion disclosed puts on about 1.1 million Tesla shares – up 34% from around 800,000 shares at the end of March. The increase suggests Burry is more convinced than ever that Musk's electric-vehicle company is hugely overvalued, and its stock is bound to crash.
Notably, Burry's hedge fund revealed a stake in Vy Global Growth, a blank-check company that went public last year with the goal of acquiring a technology business. Scion held $1.4 million of Vy shares and $1 million of warrants at the end of June, despite Burry's repeated warnings about excessive tech valuations and his past criticism of SPACs.
Burry is best known for his billion-dollar bet against the US housing bubble in the mid-2000s, which was chronicled in Michael Lewis' book "The Big Short." The investor also laid the groundwork for the GameStop short squeeze earlier this year, as he invested in the video-games retailer and urged its bosses to make changes back in 2019.
Scion made sweeping changes to its portfolio last quarter, exiting 18 of its 31 positions and adding nine new holdings.
The fund sold its stakes in Aerpio Pharmaceuticals, Genco Shipping & Trading, Helmerich & Payne, Ingles Markets, Lumen Technologies, Meredith, Now, Occidental Petroleum, Precision Drilling, ProShares UltraShort 20+ Year Treasury, RPT Realty, Urstadt Biddle, Vector Acquisition, and Zymeworks.
It also removed its bullish call options on Direxion Daily 20+ Year Treasury Bear 3X Shares, Netapp, and ProShares UltraPro Short 20+ Year Treasury, along with its puts on the iShares Russell 2000 Growth ETF.
On the other hand, Scion bought Discovery, Ovintiv, Geo Group, and Vy shares. It also purchased calls on Walmart, McKesson, and Cardinal Health stock, along with puts on Tesla and Ark.
Only three of Burry's holdings survived the first six months of 2021, and the investor added to all of them last quarter. Those favorites were his direct stakes in Corecivic and Suncoke Energy, and his calls on Kraft Heinz - which counts Warren Buffett, who Burry studied closely as a young investor, as its biggest shareholder.
Excluding options, Burry's biggest holding on June 30 was a $25 million stake in Discovery, followed by a $19 million position in Ovintiv, and a $17 million stake in Geo Group.