Burry exits Alibaba for JD.com after HKD 80 billion placement

Michael Burry sold his entire Alibaba stake and moved the capital into JD.com, citing the company's HKD 80 billion share placement.

Burry, founder of Scion Asset Management, said Alibaba's share price would need to fall by half before he would regain interest, and that he could not "get comfortable" with the company's share issuance strategy. He expected the company's return on investment to continue declining, according to a regulatory filing.

Alibaba's Hong Kong-listed shares fell 8.1 percent after the company announced the placement to raise HKD 80 billion ($10.2 billion) to fund AI spending. JD.com's Hong Kong shares rose 1.7 percent. Burry had bought Alibaba in the first quarter and exited entirely in the second, having originally planned to reinvest within one to two months before reversing course.

The placement dilutes existing shareholders, pressuring earnings per share. Burry's rotation into JD.com, which he described as one of his "large" positions, reflects a bet on a company with a more transparent business model and less dilution risk.

Burry, who gained fame for betting against subprime mortgages before the 2008 financial crisis, has built a following by making contrarian calls and sticking to valuation discipline. His rapid reversal — buying Alibaba in the first quarter and selling in the second — shows a quick change in his assessment of the company's risk profile.

JD.com is often viewed as a more operationally efficient e-commerce operator with a strong logistics network and direct-sales model, in contrast to Alibaba's marketplace approach. The regulatory filing that revealed the trade is a standard disclosure for large investors, offering a rare glimpse into the thinking of a well-known fund manager.

For retail investors, Burry's actions serve as a reminder that even successful investors can change their minds quickly. The key takeaway is not to blindly follow any single investor's trades, but to understand the reasoning behind them. Alibaba's stock has been volatile, and while some analysts see it as undervalued given its cash flow and market position, others worry about governance, regulatory overhang, and the potential for further share issuance.

Burry's exit does not mean Alibaba is a bad company — it means he believes the current price lacks enough margin of safety. His willingness to wait for a 50 percent drop before re-entering shows his disciplined approach: he would rather miss a rally than overpay for an asset. Investors will watch whether the placement's proceeds generate returns that offset the dilution, and whether JD.com's logistics-led model delivers the value Burry expects.

This article is for informational purposes only and does not constitute investment advice.