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(Bloomberg) – Investor Michael Burry made famous by the movie “The Big Short” has taken aim at one of Wall Street’s hottest stars.
Burry’s Scion Asset Management held down sell contracts against 235,500 shares of the ARK Innovation ETF (ticker ARKK) at the end of the second quarter, according to a regulatory brief released on Monday. The new post was valued at nearly $ 31 million, according to the filing.
Cathie Wood and her company Ark Investment Management’s flagship exchange-traded fund has pulled in billions in the past year after its tech-focused thematic bets beat the market in 2020. But Wood and Ark had struggling to maintain momentum amid concerns about high prices and acceleration. inflation.
Burry has been warning for months against unsustainable market valuations. In June, he warned that retail investors could be drawn into “the mother of all crashes” by investing in cryptocurrencies and memes stocks.
A sales contract gives Scion the right to sell ETF shares before a certain date and at a previously agreed price. Its value increases if the stocks fall below the threshold. The exact terms of the put options and their purchase date are not being disclosed.
Burry has been betting indirectly against Wood for quite some time via an important position against Tesla Inc. – one of Ark’s top picks and ARKK’s biggest stake.
Monday’s filing, a quarterly requirement for hedge funds above a certain size, also shows Burry increased his bearish bets against the electric vehicle maker, with put options on 1,075,500 Tesla shares. That’s up from the 800,100 shares in the first quarter.
Read more: Burry of ‘Big Short’ Fame places big bet against Musk, Tesla
ARKK fell 2.6% as of 12:25 p.m. in New York amid a general decline in tech stocks. Tesla fell 4.7% as the United States launched a formal investigation into the company’s autopilot system.
Burry rose to fame when his successful bets against mortgage securities during the financial crisis were featured in “The Big Short”, the movie version of Michael Lewis’ bestselling book. Christian Bale portrayed the founder and CEO of Scion.
(Updates with details and context.)
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