Burry, famous for 'Big Short,' bought bearish options against S&P, Nasdaq 100 (updated)

iHeartMedia

14/08/2023 19:38

(Adds details on First Republic shares, market prices,
explanation of 13-fs, paragraphs 5, 8, 10 and 12)
    By David Randall and Saqib Iqbal Ahmed
       NEW YORK, Aug 14 (Reuters) - Michael Burry, the money
manager made famous in the book and film "The Big Short," held
bearish options against the broad S&P 500 and Nasdaq 100 Index
at the end of the second quarter, according to securities
fillings released on Monday.
    Burry's Scion Asset Management bought put options with a
notional value of $739 million against the popular Invesco QQQ
Trust ETF  QQQ.O  during the quarter, and separate put options 
with a notional value of $886 million against the SPDR S&P 500
ETF  SPY.P . 
    Put options convey the right to sell shares at a fixed price
in the future and are typically bought to express a bearish or
defensive view.
    Burry rose to fame with his bets against the U.S. housing
market before the 2008 financial crisis. Michael Lewis'
nonfiction book "The Big Short" was released in 2010 and the
movie version came out in 2015. 
    It was not clear how Burry's recent options bets had fared,
given that regulatory filings do not require the disclosure of
options strikes, purchase prices and expiration dates. Since the
filings disclose only long positions it was also not clear
whether the puts were held outright or as part of a larger trade
involving other contracts that might have been sold short.
    The S&P 500  .SPX  is up roughly 17% for the year to date
while the Nasdaq 100  .IXIC  is up nearly 39% over the same
period. Outsized gains in a handful of megacap companies such as
Nvidia  NVDA.O  and Meta Platforms  META.O  have fueled much of
the year's rally. 
    The filing also showed that the fund liquidated its stakes
in Chinese e-commerce company JD.com  9618.HK  and Alibaba Group
Holdings  9988.HK , as well as regional banks including PacWest
 PACW.O  and Western Alliance Bancorp  WAL.N  that it had bet on
in the first quarter.  
    The firm noted it had sold its 150,000 shares of First
Republic Bank  FRCB.PK  as well, but did not indicate whether
that came before the company's May 1 collapse.
    Among its long positions, the fund more than doubled its
stake in online luxury goods market RealReal Inc  REAL.O , which
is up nearly 100% for the year to date, and added new stakes in
iHeartMedia  IHRT.O , HanesBrands  HBI.N , and Warner Bros.
Discovery  WBD.O , among others, the filing showed.
    Shares of iHeartMedia and HanesBrands are each down 16% or
more for the year to date, while shares of Warner Brothers
Discovery are up nearly 43%. 
    Scion Asset Management did not respond to a request for
comment. Its positions were reported in quarterly filings known
as 13-fs, which show its holdings at the end of the most recent
quarter and may not reflect current positions. While backward-
looking, these filings are one of the few ways that investors
can see the positions of institutional investors such as hedge
funds. 
    Burry, who frequently turns over his portfolio, drew wide
attention last August when he dumped all of his long positions
and bought a stake in prison company Geo Group Inc  GEO.N . He
no longer owns shares of the company. 

 (Reporting by David Randall and Saqib Iqbal Ahmed in New York
Editing by Ira Iosebashvili and Matthew Lewis)
 ((David.Randall@thomsonreuters.com; 646-223-6607; Reuters
Messaging: david.randall.thomsonreuters.com@reuters.net))