Michael Burry Sells Alibaba Stock and Buys JD.com - What the Numbers Show
TLDR
- Michael Burry sold his entire Alibaba stake and moved into a larger JD.com position
- Burry says Alibaba would need to fall 50% before he would buy it again
- Alibaba is raising HK$80 billion to fund AI infrastructure, diluting shareholders by 3.7%
- JD.com trades at 8.3x forward earnings with a 10.7% free cash flow yield versus Alibabaโs negative 4.2%
- Morgan Stanley has downgraded JD.com to Underweight with a $28 price target
Michael Burry, the investor famous for betting against the U.S. housing market before the 2008 financial crisis, has dumped his Alibaba shares and put that money into JD.com.
Burry confirmed the move on X, writing that he flipped his Alibaba stock into a large JD.com position a few months ago. He says he has no plans to go back.
His reason is direct. Alibaba announced a share sale worth HK$80 billion, roughly $10.2 billion, to fund AI infrastructure. Burry sees this as a sign that share issuance is now part of how Alibaba operates.
โIssuing shares is now its new paradigm,โ Burry wrote. He added that Alibaba would need to drop around 50% from current levels before he would consider buying it again.
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