After Burry ditched Alibaba for JD, Alibaba proved his point

Investors have a habit of forgiving conviction calls that come too early. Michael Burry has spent the past two years testing how far that patience extends with Chinese tech stocks, buying and dumping the same names in cycles most traders would find dizzying.

This time, the timing worked in his favor almost immediately.

Scion Asset Management built Alibaba (BABA) into its largest holding in mid-2024, then liquidated the entire position in the first quarter of 2025 and bought bearish put options against, along with JD.com, Baidu, and PDD, according to Benzinga's review of SEC filings .

By April, he had reversed again, disclosing on Substack that he had opened a new Alibaba stake and added meaningfully to JD.com.

That reversal did not last long. Burry now says he moved his entire Alibaba position into JD.com months ago, initially planning to shift capital back within a month or two.

That plan is off. In a post on X (the former Twitter), Burry said he will not flip any of it back to Alibaba, calling share issuance " a new paradigm again for BABA " and warning that the company's return on invested capital will keep falling as a result.

Alibaba priced its offering hours after Burry spoke

Alibaba said on Sunday, Aug. 23, that it planned to sell HK$80 billion, or roughly $10.2 billion, in a Hong Kong share placement to fund its artificial intelligence buildout, according to Reuters .

The deal marks the largest primary follow-on offering ever by a Hong Kong-listed company, ranking third-largest globally this year, behind only Alphabet and Intel.

The company issued 710 million new shares priced at HK$112.70 each, an 8.4% discount to the prior close, Reuters noted. That discount matters because steep pricing signals a company prioritizing speed of capital over shareholder-friendly terms, exactly the dynamic Burry flagged.

Demand was not the problem. The offering was nearly three times oversubscribed, with total demand reaching roughly $28 billion, including close to $6 billion from sovereign wealth funds and long-only investors.

Strong demand and a falling stock price can coexist when existing holders are the ones absorbing the dilution.

Alibaba shares opened down roughly 8% in Hong Kong trading Monday, Aug. 24, falling as much as 10% intraday.

For a stock that had been one of the better-performing large caps in Chinese tech this year, an 8% single-day drop on a widely anticipated fundraise says something about how the market is now pricing dilution risk against AI ambition.