Michael Burry's Alibaba Investment Strategy and Analysis

Michael Burry, a renowned investor and founder of Scion Asset Management, made a bold investment in Alibaba Group, a Chinese e-commerce giant. He invested in Alibaba's convertible notes in 2015, which allowed him to convert his debt into equity at a later date.

Burry's investment in Alibaba was part of a larger strategy to take advantage of the company's growing dominance in the Chinese e-commerce market. He believed Alibaba's strong brand and innovative business model made it a prime candidate for growth.

Alibaba's revenue growth was impressive, with the company's revenue increasing by 32% year-over-year in 2015. This growth was driven by the company's expanding online marketplace, which allowed consumers to purchase a wide range of products from various sellers.

Burry's investment in Alibaba ultimately paid off, as the company's stock price surged in the years following his investment.

Take a look at this: Alibaba Investor Relations

Michael Burry's investment strategy is a fascinating topic. He's known for his contrarian approach to investing.

Burry's fund, Scion Asset Management, has nearly $238 million in assets under management, which requires them to file a 13F with the SEC. This 13F provides a snapshot of his buys and sells.

One surprising aspect of Burry's strategy is that he focuses on downside bets, but what's catching attention is what he's buying. Scion Asset Management purchased shares of nine stocks in the third quarter.

Burry's purchases include 125,000 shares of JD.com, China's No. 1 e-commerce company by market share. He also bought 50,000 shares of Alibaba, China's No. 2 e-commerce company.

Investing in China stocks comes with added risk. Chinese regulators have cracked down on Alibaba in the past, levying a $2.75 billion fine in 2021.

Burry's willingness to take on this risk suggests he's confident in the long-term potential of these companies.

A fresh viewpoint: Alibaba Payment Terms

Alibaba's stock has shed close to 75% of its value from its peak, making it one of the most unloved tech giants in the global market.

Its market value has been impacted by various factors, including weakness in the Chinese consumer, lackluster earnings results, anti-trust unknowns, and geopolitical risks.

Alibaba's stock looks incredibly cheap, trading at 9.3 times forward P/E and 1.5 times P/S.

Dr. Burry has taken a bet on Alibaba, suggesting that the company may be undervalued despite the headwinds it faces.

BABA stock is not a name for the faint of heart, even as China cuts rates and moves ahead with a big stimulus package.

Intriguing read: Alibaba Share Issuance Buyback

Michael Burry, a known expert in predicting market trends, has increased his bets on Chinese tech giants Alibaba and JD.com. His investment company, Scion Asset Management, boosted its stake in Alibaba by 50% and increased its position in JD.com by 75,000 shares.

The recent decline in investor confidence has significantly impacted the market value of Chinese and Hong Kong stocks, which have dropped by $6.5 trillion since their 2021 peak. This decline is largely due to China's ongoing property crisis and slowing growth.

Burry had previously bet on these companies in 2022 but closed out his positions in 2023, only to reopen them later. This shows that even experts like Burry can change their strategies based on market conditions.

The sectors that Burry's firm has made bullish moves in include healthcare, financials, and technology, in addition to Chinese tech giants.

Burry acquired 50,000 BABA shares in the third quarter of 2023, paying approximately $86.74 for each share.

He lost approximately $500,000 on the Alibaba purchase by December 31, 2023, and his loss on the $4.3 million investment is about $600,000 as of January 24.

BABA stock has shed close to 75% of its value from its peak, making it one of the most unloved tech giants in the global market.

Despite the horrid headwinds, BABA stock looks incredibly cheap at 9.3 times forward P/E and 1.5 times P/S.

Burry's big BABA bet seems to suggest real, deep value to be had in the name, but only time will tell if it's a long-term investment or just a trade.

A fresh viewpoint: Emerson Electric Stock Quote