Michael Burry of 'Big Short' fame is betting against high-flying semiconductor stocks

By Joseph Adinolfi

He's also bought puts against shares of the company formerly known as Priceline

Michael Burry unveiled a couple of new bearish bets in a quarterly filing from his Scion Asset Management released Tuesday.

Burry's firm is betting against an index of semiconductor stocks, as well as the company formerly known as Priceline.com, according to its latest quarterly 13-F filing, released Tuesday.

The filing also revealed that Scion had apparently closed out its put option positions tied to ETFs tracking the Nasdaq-100 QQQ and S&P 500 SPY, which the firm had announced during the prior quarterly filing released on Aug. 14. Those positions had garnered a lot of attention from the financial press, especially as U.S. stocks sank for three straight months from August through October.

See: 'Big Short' trader Michael Burry loaded up on bearish options in second quarter, filing shows

Although Burry's latest round of bearish bets aren't as large as the previous batch, the notion that he's betting against the iShares Semiconductor ETF is still notable.

Tuesday's filing showed Burry had bought 2,500 puts against shares of travel platform Booking Holdings Inc. (BKNG), and 100,000 puts against shares of the iShares Semiconductor ETF XSD.

In terms of the number of contracts, these positions are much smaller than the 2 million put options Scion had purchased against index-tracking ETFs during the second quarter.

Semiconductors have been among the biggest beneficiaries of the artificial-intelligence boom this year, led by "Magnificent Seven" member Nvidia Corp. (NVDA) , which some have described as the most important U.S.-traded stock right now.

See: This one stock could potentially undo the 2023 rebound if it falls another 10% as one analyst expects

Burry made other changes to Scion's portfolio as well, notably dumping shares of Geo Group Inc. (GEO), a private-prison company, according to the filing. He also sold shares of Warner Bros. Discovery Inc. (WBD), Vital Energy Inc. (VTLE), the Cigna Group. (CI), Signet Jewelers Ltd. (SIG), MGM Resorts International (MGM), New York Community Bancorp (NYCB) and others.

Holding put options gives an investor the right, but not the obligation, to sell the underlying asset by a set time for a set price, known as the strike price. As such, they are popular instruments for betting on downturns. But they can also be used to hedge positions, or as part of a broader strategy.

Burry hasn't commented publicly about his short bets, and it's unclear whether he made money on his previous round of puts. A call from MarketWatch to a contact number listed in the 13-F filing wasn't returned.

Hedge funds are required to disclose their long positions quarterly, but the filing may not offer a complete view of Burry's portfolio. Burry rose to fame after his prescient bet against the U.S. housing market was profiled in Michael Lewis's "The Big Short," which was later adapted into a movie where Burry was played by actor Christian Bale.

-Joseph Adinolfi

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11-14-23 1544ET

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