The "big short" prototype expands its bets on Chinese concept stocks, increasing holdings in Alibaba and JD.com in Q3

According to information from Zhitong Finance, based on disclosures from the U.S. Securities and Exchange Commission (SEC), Michael Burry, the prototype for the Hollywood movie "The Big Short" and a globally renowned hedge fund manager, has submitted the third-quarter U.S. stock holdings report (13F) for his Scion Asset Management, covering the period ending September 30, 2024.

Statistics show that "The Big Short" Michael Burry's Scion had a total market value of approximately $130 million in holdings for the third quarter, up from about $52.5 million in the previous quarter, reflecting a quarter-on-quarter increase. The asset management company added three new stocks to its portfolio in the third quarter of this year, increased its holdings in six stocks, reduced its holdings in two stocks, and completely exited two stocks. The top ten holdings accounted for 99.13% of Scion's total market value.

Burry, known for shorting the U.S. housing market in 2008, further increased his exposure to Chinese stocks, including Alibaba Group (BABA.US), in the third quarter, while also adding new put options for downside protection. Burry increased his Alibaba shares by nearly 30% this quarter, reaching 200,000 shares valued at approximately $21 million. According to the 13F filing submitted to regulators on Thursday, Scion also purchased put options with a notional value equivalent to 84% of its Alibaba shares, totaling nearly 169,000 put options with a notional value of about $18 million.

This adjustment in positions comes as China intensifies efforts to boost economic growth, with the government promising to support fiscal spending and the real estate market in September. The unexpected stimulus plan triggered a wild rebound in the Chinese stock market. Burry's firm employed the same strategy for two other Chinese investments—Baidu (BIDU.US) and JD.com (JD.US).

Burry holds 500,000 shares of JD.com, valued at $20 million. Similarly, he increased his Baidu position by two-thirds to 125,000 shares, valued slightly above $13 million as of September 30. Burry also hedged his risks for these two companies.

The filings show that in the three months ending in September, Scion doubled its holdings in JD.com while increasing its bearish bets on the stock position. The company also increased its Baidu position by two-thirds and hedged its risk exposure. Data indicates that as of the end of September, the holdings of the three Chinese stocks, including Alibaba, were valued at $54 million, accounting for about 65% of Burry's total holdings.

![d1efc7f76c38893a7caa417698ca0e0.png](https://img.zhitongcaijing.com/image/20241115/1731631186869502.png? Long before the significant policy shift by the Chinese government in September, Barry and David Tepper of Appaloosa Management were among the few well-known hedge fund investors optimistic about the Chinese stock market. In the first quarter, he significantly increased his holdings in Chinese stocks, more than doubling his stake in Alibaba, and then further increased his holdings in the second quarter, making Alibaba his largest position as of June 30.

Since the introduction of stimulus measures at the end of September, China's benchmark stock index, the CSI 300, surged 32% in two weeks, while the Nasdaq Golden Dragon Index rose about 37%. Although this rebound has since cooled; it is unclear when Burry's Scion entered the aforementioned Chinese concept stocks, but based on the stock performance in October, Barry seems to have made a profit.

In the last quarter, Barry also increased his bets on Molina Healthcare (MOH.US), Shift4 Payments (FOUR.US), and Olaplex (OLPX.US). He also completely exited BioAlta (BCAB.US) and Hudson Pacific Properties (HPP.US), reduced his stake in The Realreal (REAL.US) by more than half, and cut his holdings in American Coastal Insurance Company (ACIC.US) by 60%.

Also disclosed in the 13F filings released on Thursday, the emerging hedge fund Keystone Investors Pte, based in Singapore, has also made significant investments in U.S.-listed Chinese concept stocks and ETFs in the third quarter. Among the new positions established by Keystone in the third quarter were three major Chinese concept stock ETFs, including 1,570 shares of iShares China Large-Cap ETF (FXI.US), 6,090 shares of KraneShares CSI China Internet ETF (KWEB.US), and 225,000 shares of Deutsche Bank X-trackers Harvest CSI 300 China A-Shares Fund ETF (ASHR.US). Additionally, Keystone built long positions in Alibaba, Up Fintech Holding (TIGR.US), Li Auto (LI.US), Huazhu (HTHT.US), Yum China (YUMC.US), and increased holdings in Pinduoduo (PDD.US), Trip.com (TCOM.US), and TSMC (TSM.US)