In Brief:
- Micheal Burry made the Biggest Fortune of Wall street in a single Bet
- His $1 billion bet against Housing market is Popularly Known as “The Big Short”
- He was the First to Vision the Inevitable Crash.
- In an SEC Filing Burry revealed his big bets against ARK Innovation ETF and Tesla Inc.
The Big Short fame, Michael Burry has placed his next bet against the Cathie Wood’s Ark Innovation ETF, according to his latest SEC filings. The WallStreet hotshot also raised his bet against Tesla.
According to the filling, Scion Asset Management reported bearish put options against 235,500 shares of the ARK Innovation ETF. The 13-F filing revealed that Burry’s Scion Management purchased 2,355 put contracts on ARKK.
A put option gives investors the right to sell a stock at a specified strike price before a certain expiration date. If the price of the underlying equity falls, investors can benefit by exercising their right to sell the underlying at the predetermined strike price.
Why Micheal Burry is Shorting Ark and Tesla
Ark Innovation Fund has struggled to maintain its momentum even though Cathie managed to lure billions through tech-focused bets. “The Big Short” fame Burry has been warning about unsustainable valuations in the market for months. He also cautioned that retail investors could be getting drawn into a major crash if they invest in cryptocurrencies and meme stocks.
Scion Management has been indirectly investing against Ark via betting positions against Tesla. Tesla happens to be Cathie Woods’ top pick and ARKK’s biggest holding.
Monday’s filing also shows that Scion has increased his bearish wager against Tesla. The put went up from 800,100 shares to 1,075,500 shares.
Burry was one of the biggest investors who created a fortune out of a market crash. He was among the first investors to call and profit from the subprime mortgage crisis. This “short” move probably could be his yet another “short”. He has already signalled that retail FOMO will probably burst the crypto bubble. We may soon see a massive drop in the price of Bitcoin and other Cryptocurrencies may follow.
Cathie Wood called out Michael Burry on social media after he placed a bet against the ARK Innovation exchange-traded fund.
Also Read: Cathie Wood’s Ark Invest Adds Another $54M In Square
“To his credit, Michael Burry made a great call based on fundamentals and recognized the calamity brewing in the housing/mortgage market. I do not believe that he understands the fundamentals that are creating explosive growth and investment opportunities in the innovation space,” Wood tweeted on Tuesday morning.
Burry rose to widespread fame when his successful bets against mortgage securities during the financial crisis were featured in “The Big Short”. In the movie, Cristiane Bale portrayed his character. ARKK dropped 2.6 percent in New York amid broad tech-stock declines. Tesla Collapsed by 4.3 percent.
