In a surprising move, Michael Burry, the investor best known for anticipating the 2008 housing crisis, has decided to stop managing funds for external clients. This decision was confirmed as Scion Asset Management, his hedge fund, was deregistered with the SEC earlier this week. According to the latest regulatory filing, the fund had around $155 million under management as of late March.
Burry shared an image of Scion’s deregistration status on X, formerly known as Twitter. This action, hinted at in a previous post on October 30, marks Burry’s first social media activity since April 2023.
He further explained, “Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play.” Burry has been vocal about his concerns regarding the current artificial intelligence boom, drawing parallels to the dot-com bubble of the late ’90s. The S&P 500 and Nasdaq 100 have recently peaked, raising fears of overinflated stock valuations.
The investor, who gained fame from his successful bet against the housing market as depicted in “The Big Short,” shook markets last week. Scion’s third-quarter portfolio disclosure revealed bearish put options on Nvidia and Palantir, indicating a skeptical stance on AI stocks.
The disclosure led to a public spat with Palantir CEO Alex Karp, who critiqued Scion’s bets as “batshit crazy.” Burry responded on X, dismissing Karp’s comments about his financial strategies.
Burry also clarified misreported figures regarding his investment in Palantir options. Contrary to reports of a $912 million bet, he stated it was a $9.2 million investment for 50,000 put options, each covering 100 shares at $1.84 per share.
As Burry continues to hint at new ventures, his X bio teases an upcoming launch on November 25, stating, “Now unchained -??? launches Nov 25th, Stay Tuned!”
This isn’t goodbye
Burry’s decision echoes his past actions in 2008 when he closed Scion Capital after the housing bubble burst. He revived it as Scion Asset Management in 2013 with limited external clients. This trend of converting hedge funds to family offices is not new among prominent investors. John Paulson, David Tepper, Stanley Druckenmiller, and Leon Cooperman have all transitioned, freeing themselves from client pressures while maintaining influence in the financial world.
Even as Burry returns his clients’ funds, his social media activity suggests he remains a keen observer and participant in market dynamics, with potentially more freedom to express his views.
