Tracking 13Fs: Michael Burry's Scion Asset Management Q3 Update

Quarterly Overview:

In today's article, we dive into the latest developments in our ongoing series that sheds light on 13F filings, analyzing recent strategic maneuvers of globally acclaimed funds and asset managers.

Last quarter, Dr. Michael Burry's notable short positions in the S&P 500 and Nasdaq's QQQ were closed at a loss, as highlighted in Scion Asset Management's 13F filing. With both indices declining less than 5%, these moves resulted in losses rather than gains. The portfolio witnessed significant churn; by September's end, only 8 of the previous quarter's 42 holdings remained. Adjustments included downsizing stakes in Crescent Energy Company (CRGY) and The RealReal, Inc. (REAL), while increasing investments in Euronav NV (EURN), Nexstar Media Group, Inc. (NXST), and others.

Scion's portfolio underwent a complete overhaul, with all remaining positions closed, reducing the AUM to around $44 million. Precise valuation is obscured by SEC guidelines that limit disclosure to underlying asset prices, not option contract values. This quarter, Burry opened four new positions, continuing his pattern of actively trading select stocks each quarter.

Expanded Positions:

Stellantis NV: Burry increased his stake in Stellantis NV, the 8th largest automaker, adding 75,000 shares to the existing 325,000. Despite a major UAW strike, the company's stock rose 16% since Q2, suggesting Burry's optimism in its further growth. This position is now Scion's largest, valued at about $8.1 million.

Nexstar Media Group, Inc: Scion's investment in Nexstar, a TV media group with brands like News Nation and The CW Network, grew over 200%, with Burry purchasing 33,651 shares this quarter. Despite a year-to-date decline of 15%, Burry's increased stake indicates confidence in its potential recovery.

Star Bulk Carriers Corp: Burry's 35% increase in Star Bulk Carriers reflects a strong conviction in this Greek shipping company, now the third-largest holding in his fund. Shares would have been bought between around $3 to $3.50 versus between $3.25 and $3.80, so another opportunity to average down in a stock the investor seemingly has some strong conviction in.

Euronav NV: While Euronav's market is entirely crude oil this is ultimately still a bet on the shipping and transportation industry. Focusing on the shipping and transportation sector, Burry expanded his stake in Euronav NV, a crude oil transporter, making it the 8th largest holding in his portfolio. They have returned about 11-12% YTD. Burry first opened this position in Q2 when shares traded between $14 and $18 and they've continued to trade in the same range since. His fund now owns 250,000 shares of the oil transporter making it the 8th largest holding.

New Positions:

iShares Semiconductor ETF (SOXX): Burry opened a significant but undisclosed short position against SOXX, a BlackRock ETF with major chip-makers, amidst industry growth and geopolitical tensions. The sector's 50% YTD increase and strong Q3 earnings highlight the high-risk nature of this position. SOXX traded as high as $535 and as low as $460 in Q3 when Burry was purchasing put contracts, today it trades around $510. Similarly to the QQQ and SPY puts, this new short position Burry opened against the BlackRock (BLK) ETF with holdings like (AMD), (NVDA), (AVGO), and (INTC).

JD.Com, Inc (JD) & Alibaba Group Holding (BABA): Burry's relationship with JD and BABA which is also a new position this quarter is volatile. I chose to combine these two into one section considering how correlated Burry's trading of the two stocks has been.

Re-entering Chinese tech, Burry bought 125,000 shares of JD and 50,000 of BABA, despite JD's 50% YTD loss. Their volatile trading patterns and recent stock price movements show a strategic play on market fluctuations. Today the stock trades at $28-29 per share. The two stocks again moved to the top of the fund's holdings with JD and BABA now the 7th and 5th spots in terms of percent of AUM. JD released earnings on November 15th just a day after Burry's filing and shares jumped close to 10% in opening trading. In line with its peer, BABA also gapped up around 5% at open. 

Booking Holdings Inc (BKNG): This was the only other new position this quarter and it's unique. The fund purchased 1,500 shares of A unique move, Burry bought 1,500 shares of Booking Holdings while also shorting it, possibly indicating a covered put strategy. This complex position underscores a nuanced approach to the travel services firm."

Reduced Positions: 

Almost all positions that were reduced were ultimately closed out but two were shrank and still remain in the funds portfolio today.

The RealReal Inc (REAL) and Crescent Energy Company (CRGY). REAL, an online luxury goods marketplace, has been a part of Burry's selection since the first quarter of this year. CRGY, engaged in natural gas, crude oil, and NGLs, reflects Scion's continued interest in the energy sector.

Closed Positions:

In a major portfolio overhaul, Scion Asset Management closed out several positions, diverging from our typical focus on individual stocks. The most significant closure involved the short positions against SPY and QQQ through put contracts, which, as noted earlier, were likely closed with little to no gain. This strategic move appears timely, as both indices have risen over 5% post-Q3.

Noteworthy exits also included Expedia Group Inc (EXPE) and Charter Communications Inc (CHTR), previously the 3rd and 4th largest holdings. Burry's CHTR shares, acquired between $320 and $368, were sold in a range up to $455, likely securing a profit. The EXPE position, initiated in Q2 between $89 and $112, faced a downturn post-Q2 earnings, with a potential sale price peaking at $122 before dropping.

The hack at MGM Resorts International (MGM) prompted the closure of this once 8th largest holding. The long-held GEO Group Inc (GEO) was also completely divested, marking the end of its significant presence in the portfolio. The brief holding in CVS Health Corporation (CVS) ended with a probable gain of about 15%. A notable mention is Generac Holdings Inc (GNRC), held from Q2 to Q3; shares acquired as low as $93 soared to around $153 before falling, suggesting a profitable but volatile trading period. Overall, the quarter concluded with 20 positions from the previous period being liquidated.

Final Overview:

Dr. Burry's portfolio is known for its high quarter-over-quarter turnover, yet this period exceeded typical levels. As observed in the 'Closed Positions' section, his strategic acumen was evident in numerous timely stock picks, aside from the less successful SPY and QQQ shorts.

This quarter, his portfolio showcases a diverse array of investments spanning 5 to 6 different sectors. A key focal point is his short position in the semiconductor industry, a move not just financially motivated but also intertwined with complex geopolitical dynamics, especially between the U.S. and China.

This strategy becomes particularly intriguing as most SOXX holdings have surged by at least 50% year-to-date. Moreover, his active trading of Chinese tech stocks JD and BABA underscores a keen interest in leveraging global economic and political developments.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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