Look who shorted Apple

From Theron Mohamed’s “‘Big Short’ investor Michael Burry reveals bet against Apple stock” posted Monday on Markets Insider:

Michael Burry, the investor of “The Big Short” fame, placed a bet against Apple and loaded up on other stocks last quarter, a Securities and Exchange Commission filing revealed on Monday.

Burry’s Scion Asset Management held bearish put options against 206,000 Apple shares as of March 31. The iPhone maker’s stock price has roughly quadrupled since the start of 2019, but has slumped by 16% this quarter alone.

My take: Barry’s SEC Form 16F (below) shows he paid nearly $36 million for those 206,000 puts. No information on strike prices or when in the quarter he bought them.

Click to enlarge. 

6 Comments

  1. “strike prices or when in the quarter he bought them.” Big money has tried shorting Apple since they went public. The amount of money lost is the stuff of legends. Not saying this fella didn’t risk a boatload & make a buck but it’s always been risky to short a firm with financials like Apple.

    2
    May 16, 2022
  2. Kirk DeBernardi said:
    Intelligent man and savvy investor, but maybe too much a one-hit-wonder to continue trotting out as some reliable guru.

    1
    May 16, 2022
  3. Adam Stein said:
    You have to admit, this was good timing. No matter when he bought puts during Q1, he’s certainly made money. The tricky thing is how long he will continue to hold them, if he hasn’t gotten out of them already.

    1
    May 16, 2022
  4. Mark Visnic said:
    Burry committed long capital in two megacap names (GOOG and FB) equivalent to what he committed in short capital to AAPL. It likely is meant as a paired trade based on his view that GOOG and FB are considered in mainstream as more reasonable multiples and AAPL, to his and others eyes is trading at a multiple higher than its multiple in the past. Because of leverage he was net short megacap but wanted to bet that GOOG and FB are closer to a bottom. It is a mainstream view. He probably doesn’t get Aapl’s valuation but, I bet that is his logic. It doesn’t mean he won’t make $. It’s not a crazy trade. He expects AAPL will catch up to AMZN, NFLX, FB, and GOOG in relative decline.

    2
    May 16, 2022
  5. Fred Stein said:
    I’m betting just the opposite, selling puts.

    Some are laughable. June 2022 puts at $75 sold for $3.15, now cost $.03, soon zero.

    The longer and deeper the downturn lasts, the more buybacks work for us. Shooting fish in a barrel.

    0
    May 16, 2022
  6. Mark Visnic said:
    Barry’s SEC Form 16F (below) shows he paid nearly $36 million for those 2,060 put contracts (equiv to 206,000 shares). No information on strike prices or when in the quarter he bought them.

    $36mm/206000 = $174 would mean an expensive ITM long-dated put. In other words a relatively conservative structure that would have a delta close to 1.

    1
    May 16, 2022

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