Why Is Michael Burry So Bearish on Alibaba (And Other Major Chinese Tech Stocks)?

• It recently became publicly available that Michael Burry (CEO of Scion Asset Management) started buying put options on numerous Chinese stocks including Alibaba Group Holding (BABA US).

• We highlight four major reasons why Burry may have turned bearish on Chinese tech names (tariffs, delisting threats, increasing hostile political pressure on China, and China's 30 year bond yield).

• Although we do not know exactly know how Burry has changed his position in 2Q25, he is likely to have reduced put options on major Chinese tech stocks in April/May.

Alibaba Group Holding (BABA US) is such an important stock for the entire Asian stock markets. Its market cap has declined to US$288 billion, down nearly 60% from its peak levels in October 2020. However, its market cap has risen 75% from the lows in April 2024.

It recently became publicly available that Michael Burry (CEO of Scion Asset Management) started buying put options on numerous Chinese stocks including Alibaba Group Holding (BABA US). Although Burry's hedge fund is relatively small in size (AUM of about US$199 million), his moves are widely followed by many investors around the world.

His biggest short position is puts on NVIDIA Corp (NVDA US). He also has puts on several Chinese stocks including Alibaba Group Holding (BABA US), PDD Holdings (PDD US), Baidu (BIDU US), and JD.com Inc (ADR) (JD US).

The focus of this insight is his short position on Alibaba Group Holding (BABA US). The puts on Alibaba Group Holding (BABA US) accounted for 13.3% of total AUM as of end of 1Q 2025. This was the highest short position among the numerous bearish bets on Chinese stocks.

These positions are as of end of 1Q 2025 (March). Burry's bearish bets on Chinese stocks through put positions became publicly available about 10 days ago. His uber bearish positions on Alibaba and other major Chinese tech stocks are especially interesting given that he only had long positions on these same Chinese stocks at end of December 2024.

In the past two years, Michael Burry has been relatively silent on X (Twitter) and he has not really given any major interviews in this period. So the F13 filings are the only major ways to track his moves (albeit with some delay).

Source: www.carbonfinance.io