This article first appeared on GuruFocus.
Michael Burry (Trades, Portfolio) has moved out of Alibaba Group Holding (NYSE:BABA) and into rival JD.com (NASDAQ:JD), pointing to Alibaba's planned stock sale as a reason for the shift, according to an Aug. 23 post on X.
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Burry said he changed his position several months ago and does not expect to return to Alibaba under its current approach to issuing shares. His comments add to investor attention around the company's capital-raising plans and their potential effect on existing shareholders.
Alibaba plans to raise about HK$80 billion, or roughly $10.2 billion, through a share offering to support efforts to expand its artificial intelligence capabilities. The move could increase the number of shares outstanding and potentially dilute existing ownership.
Burry, who became widely known for anticipating the U.S. housing-market collapse before the financial crisis, said Alibaba would need to decline by about 50% from current levels before he would reconsider the stock.
What it means for the stock: Burry's shift may weigh on Alibaba sentiment, while the planned equity raise could keep investor focus on dilution and capital needs.