BIG SHORT'S Michael Burry Stuns Market! Hedge Fund Deregistered – Is A Crash Coming?

Author

Aditi Singh | Whalesbook News Team

Detailed Coverage:

Michael Burry, the celebrated investor known for his prescient bet against the US housing market before the 2008 crisis, has taken a significant step by terminating the SEC registration for his investment firm, Scion Asset Management. The filing, effective November 10, marks a major transition for the hedge fund. Burry himself cryptically suggested he was moving on to 'much better things' via social media.

This deregistration implies that Scion Asset Management might be winding down its operations or closing its doors to outside investors, especially since it managed approximately $155 million in assets under management (AUM) as of March. Burry has consistently voiced concerns about current market euphoria, particularly the intense rally in artificial intelligence stocks. His firm had recently disclosed bearish wagers, including put options, on prominent AI-focused companies such as Nvidia Corp. and Palantir Technologies Inc. Earlier filings revealed Scion had liquidated most of its public equity portfolio to acquire put options on Nvidia and several US-listed Chinese tech firms.

Impact This action by a prominent investor like Michael Burry is noteworthy. It could influence investor sentiment and potentially signal caution for those heavily invested in high-growth tech sectors. While not a direct cause for immediate market decline, his moves and pronouncements are closely watched for insights into market stability and future trends, potentially leading to increased scrutiny of the companies he has targeted. Rating: 6/10

Difficult Terms: * **SEC (Securities and Exchange Commission):** A U.S. government agency that oversees securities markets, protects investors, and ensures fair trading. * **Hedge Fund:** An investment fund that pools money from accredited investors and uses a variety of strategies, often complex, to try to generate profits. * **Deregistration:** The official process of removing an entity from a regulatory registry, indicating it no longer needs to comply with specific registration requirements. * **Market Exuberance:** A period of excessive optimism and enthusiasm in financial markets, often leading to asset prices rising significantly beyond their fundamental value. * **Bearish Wagers:** Investment positions taken with the expectation that the price of an asset will decline. * **Put Options:** Financial contracts that give the holder the right, but not the obligation, to sell an asset at a specified price before a certain date. * **AUM (Assets Under Management):** The total market value of all financial assets that a financial institution manages on behalf of its clients. * **Credit-Default Swaps:** A financial derivative that allows an investor to 'swap' or offset their credit risk with that of another investor. The seller agrees to pay the buyer in the event of a loan default.