Michael Burry has exited his position in Alibaba Group Holding Ltd. and is building what he calls a 'large' stake in rival online retailer JD.com Inc., according to a post the Scion Capital Management founder published on Substack on August 23, 2026.
'I planned to move most of it back after a month or two. No longer,' Burry wrote, adding that Alibaba's share price would have to 'fall by half for me to get interested again.' He had first disclosed the Alibaba position in April of the same year.
The trigger: a $10.2 billion share sale
Burry's exit came as Alibaba announced plans to raise approximately HK$80 billion — roughly $10.2 billion — through a follow-on share offering in Hong Kong, which would rank as the largest such offering by a company on record in that market. The proceeds are earmarked for AI investments.
'I cannot bless share issuances,' Burry said, warning that he expects return on invested capital at the company to continue declining.
The numbers back his concern. Alibaba reported a 75% profit decline for the quarter ended in June as AI-related capital spending accelerated. The company's American Depositary Receipts were down 18.6% for the year and fell an additional 8.6% on Friday. Hong Kong-listed shares were off 13.9% year-to-date. Alibaba separately priced the new offering at HK$112.70 per share, a discount to the Hong Kong market's Friday closing price of HK$123.
Capital speaks plainly
Burry is best known for his bets against the U.S. housing market ahead of the 2008 global financial crisis, a trade immortalized in The Big Short. His read on Alibaba follows a pattern familiar to free-market investors: when a company dilutes shareholders to fund speculative capital expenditure while margins compress, the rational move is the exit door.
The pivot to JD.com signals that Burry still sees value in Chinese e-commerce — just not at Alibaba's current price or capital structure. Whether that distinction holds as Beijing's regulatory environment and U.S.-China tensions continue to evolve is a question every investor in the sector must price for themselves.
For now, the market has already voted. An 18.6% annual decline and an 8.6% single-session drop on the day of the share-sale announcement are not ambiguous signals. When a company's answer to falling returns is to issue more equity, disciplined capital tends to find the exit — and Burry found his.
