In filings with securities authorities released on Monday, renowned hedge fund manager Michael Burry, whose exploits were famously captured in the film “The Big Short,” took a bearish stance on the market. Burry’s Scion Asset Management shorted the S&P 500 and Nasdaq 100 for the close of the second quarter, wagering approximately $1.6 billion on an impending stock market collapse.
A New ‘Big Short’? Michael Burry Wagers $1.6 Billion Against QQQ and SPY
Michael Burry appears to be taking a bearish stance on Wall Street once more, with Scion Asset Management’s latest Securities and Exchange Commission (SEC) 13F filing revealing a substantial acquisition of put options against Invesco QQQ ETF (NASDAQ: QQQ) and SPDR S&P 500 ETF Trust (NYSEARCA: SPY). These options have a notional value of $1.62 billion, comprising a staggering 93% of Scion’s disclosed assets.
Of this substantial wager, $738.8 million has been placed against QQQ, while $886.6 million targets SPY. Despite the S&P 500 and Nasdaq 100 performing robustly thus far in 2023, the specifics of Burry’s filings, such as purchase prices and expiration dates, remain concealed. Given Burry’s successful bets during the 2008 financial crisis, his market moves are closely watched. Yet in a surprising turn, Burry shifted from a selling stance in January 2023 to admitting he was mistaken by April.
He openly acknowledged his error in advising sales, even extending congratulations to the “BTFD generation.” Alongside these bold moves, Scion’s latest filing reveals long positions in companies such as Stellantis, Discovery, Expedia, CVS, MGM Resorts, Iheartmedia, and Cigna. It was around this same time last year, in August 2022, when Burry began to predict a multi-year recession in the United States, adopting a more bearish outlook.
In March, Burry likened three major bank collapses to the Panic of 1907, and the latest SEC filings indicate that Scion eliminated exposure to Western Alliance Bancorp and Pacwest. As August 2023 progresses, both the S&P 500 and Nasdaq 100 have retreated against the U.S. dollar, shedding 2% to 3% respectively this month. The 13F filing additionally reveals that Scion has divested its holdings in Alibaba Group and JD.com.
What do you think about Michael Burry’s short bets? Share your thoughts and opinions about this subject in the comments section below.
