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• Burry buys put options for 206,000 Apple shares
• Long positions in Meta, Alphabet and Discovery
• Warren Buffet still relies on Apple
Michael Burry is best known for his subprime short positions and anticipating the 2008 stock market crash. The events of his profit on secured debt obligations (CDO), the bursting real estate bubble and the mortgage crisis found a wide audience in The Big Short. Now, the hedge fund manager is getting attention again with Apple’s shorts.
After Tesla and the ARK Innovation ETF, the major investor and founder of Scion Asset Management also bought 2,060 Apple stock sale contracts in the first quarter. Each of these contracts has 100 shares associated with it. Meanwhile, Warren Buffett, Apple’s largest shareholder by market cap, bought $ 600 million in Apple stock last quarter for Berkshire Hathaway.
The latest SEC 13F filing shows hedge fund Scion Asset Management’s stake in 12 stocks, including parent Google Alphabet ($ 18,079,000), Meta ($ 17,789,000) and Discovery ($ 18,728).
Last quarter purchases boosted Scion’s total value by 122 percent to $ 165 million. At $ 35,970,000, Apple’s short is the largest in the portfolio and also the only put option. Scion previously sold almost all of its shares in December, owning only the shares of biopharmaceutical company Bristol-Myers Squibb.
“Big Short Burry” for the S&P 500?
Michael Burry has an impressive hit rate at predicting major crashes. The market is in “the biggest speculative bubble of all time,” he said last summer. The mother of all failures is inevitable for investors investing in meme stocks and Bitcoin & Co.
In a May 3 tweet that has since been removed but which The Street released as a screenshot, hedge fund manager Cassandra BC points out that the S&P 500 recovered too early from the 2020 crash during the corona crisis. Burry believes the US major index could fall 54 percent in the coming years.
Challenges for Apple
Apple recently lost its position as the world’s most valuable company to the Saudi oil company Aramco, but with a 7% share it is an important component of the S&P 500, and the NASDAQ 100 technology-based 100% with a 13% share. If there was a crash, it would be difficult to imagine Apple avoiding a market crash. The tech giant’s stock was also 20 percent more volatile than the S&P 500 and fell consistently below the index.
However, Apple’s final quarter has managed to deliver solid growth and beat all expectations despite the challenges, making Burry’s bet dangerous. A bearish in the tech sector doesn’t necessarily lead to a meltdown, as Wedbush’s Dan Ives told The Street, but the market is divided between winners and losers – and it clearly sees Apple on the better side.
An exciting bet by the Wall Street giants
As Meedia writes in the headline, it boils down to an exciting duel on Wall Street: Buffett vs. Burry – The Oracle of Omaha versus the legendary hedge fund manager.
The 13F SEC filing is as of March 31, 2022, so it cannot be said whether Burry still owns or has already sold the items reported there. In the case of Apple shares, a price loss of 18.04 percent. from March 31 (closing rate May 23, 2022) would already mean a profit.
Editors of finanzen.net
The leverage must be between 2 and 20
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