Why Is Michael Burry Going In On China? An In-Depth Look At Scion Capital Holdings

Zinger Key Points
  • Scion’s latest 13F for the quarter ending Dec. 31, against the previous filing for the quarter ending Sept. 30 shows big moves.
  • The hedge fund exited four positions, liquidated shares of others, and added seven new positions, two of which are China-based.

Recall how Scion Capital founder Michael Burry — who gained widespread recognition after being portrayed by actor Christian Bale in the 2015 film "The Big Short" (based on Michael Lewis' book) — tweeted “Sell” back on Feb. 1.

Then Burry deleted his Twitter account.

Though the investor is known for deleting his account (and tweets), what exactly did he mean by "Sell?"

Read also: What Is A Death Spiral Convertible? Michael Burry Sounds The Alarm For Meme Stock Fans

The one-word tweet should’ve actually been “buy,” because according to Scion Capital’s latest 13F filing, Burry bought more stocks than he sold. And, he could’ve said “China” after.

What Happened: Looking at Scion’s latest 13F for the fiscal quarter ending Dec. 31, against the previous filing for the fiscal quarter ending Sept. 30, the hedge fund exited four positions, liquidated shares of others, and added seven new positions, two of which are Chinese companies.

That may sound a bit confusing, so here are a couple of charts.

Fiscal Quarter ending Sept. 30

Company

Ticker

Shares Owned

Value 

Aerojet Rocketdyne Holdings

AJRD

132,561    

$5,301,000

Charter Communications Inc

CHTR

10,000

$3,034,000

Corecivic Inc

CXW

724,895

$6,408,000

Geo Group Inc

GEO

2,019,150

$15,547,000

Liberty Latin America

LILAK

155,761

$958,000

Qurate Retail Inc

QRTEA

5,000,000

$10,050,000

Fiscal Quarter ending Dec. 31

Company

Ticker

Shares Owned

Value

Alibaba Group Holding

BABA

50,000

$4,404,500

Black Knight Inc

BKI

150,000

$9,262,500

Coherent Corp

COHR

150,000

$5,265,000

Geo Group Inc

GEO

1,063,127

$11,641,241

JD.Com Inc

JD

75,000

$4,209,750

MGM Resorts International

MGM

100,000

$3,353,000

Qurate Retail Inc

QRTEA

1,500,000

$2,445,000

SkyWest, Inc.

SKYW

125,000

$2,063,750    

Wolverine World Wide, Inc.

WWW

356,101    

$3,892,184

Burry exited Aerojet Rocketdyne Holdings, an American aerospace and defense company that provides missile defense, strategic, and tactical missile programs to America and our allies.

It sold its position in Charter Communications, a cable company that operates through the Spectrum brand, and axed Liberty Latin America, a cable brand that operates in Costa Rica.

And while the hedge fund manager still owns millions of dollars in shares of corrections and prison services through Geo Group, it exited its position in Corecivic.

On the buy side, it added integrated software, data and analytics company Black Knight, Coherent Corp, a global provider of lasers and laser-based technology, regional airline SkyWest Inc, and “Sperry” shoe-brand owner, Wolverine Worldwide.

Scion Capital also bought Chinese-based Alibaba Group Holdings, JD.com, and opened a position in MGM Resorts International, which owns 51% of MGM China Holdings Ltd.

Why It Matters: As China reopens its economy, record inflows into emerging market equities have been observed, according to a report by Bank of America Global Research reported earlier by Benzinga.

Against this backdrop, Burry has made a move into China, seeking to capitalize on the anticipated rise in demand.

This has led to an upswing in assets across various industries, from crude oil to European luxury goods, as investors and businesses alike seek to take advantage of the renewed activity.

Burry is not the only hedge fund manager making such moves, as Coatue Management and Farallon Capital Management have also reportedly bought shares in Chinese e-commerce giant, Alibaba.

Read next: Elon Musk And Michael Burry Criticize Plans To Ramp-Up IRS Hiring, Say Move Not Aimed At World's Richest But The Small Fishes

Posted In: Large CapMid CapNewsHedge FundsGlobalTop StoriesMarketsTrading IdeasGeneral13FChinaMichael BurryScion Capital
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