Michael Burry’s Alibaba stake is now entirely in JD.com, and the ‘Big Short’ investor has said a landmark $10.2 billion share placement by the Chinese tech group has ended any near-term prospect of his return.
Writing on Substack on Sunday, Burry said he had recently moved his entire Alibaba position into rival Chinese e-commerce company JD.com. He had planned the switch to be temporary. ‘I planned to move most of it back after a month or two. No longer,’ he wrote.
Alibaba would, Burry added, ‘have to fall by half’ to interest him again.
The Deal That Changed His Calculus
The placement that triggered Burry’s verdict is Alibaba Group‘s sale of 710 million new shares at HK$112.70 apiece, raising roughly 80 billion Hong Kong dollars (about $10.2 billion) to fund AI infrastructure. The price represented a 3.6% discount to Alibaba’s most recent Hong Kong closing price and an 8.4% discount on the US-listed ADR’s Friday close, according to the company’s own announcement and a StockTitan summary of Alibaba’s Form 6-K filing.
The transaction is expected to have closed on 26 August 2026, with shares placed among at least six investors under a general mandate, representing roughly 3.6–3.7% of Alibaba’s share capital. It is the company’s first share issuance since its Hong Kong listing in 2019, according to the official announcement. The Globe and Mail reports that Alibaba’s total issued shares rose to 19.88 billion ordinary shares following the deal’s completion.
Reuters reports the transaction would rank as the largest-ever primary follow-on offering by a Hong Kong-listed company, and the world’s third-largest primary follow-on share sale of 2026, behind only offerings from Alphabet and Intel.
‘I cannot bless share issuances,’ Burry wrote, predicting Alibaba’s return on invested capital would keep falling. He described the move as another ‘new paradigm’ for the company.
Why Michael Burry’s Alibaba Stake No Longer Appeals
The placement landed against a backdrop of deteriorating quarterly profits. Revenue rose 9% in the June quarter, but net profit plunged 75% as capital expenditure jumped 75% to nearly $10 billion. Burry was not alone in his discomfort: Alibaba’s US-listed shares slid 9% on Friday to $119.34 after those results, and fell as much as 10% in Hong Kong on Monday when the share sale was announced.
The capex surge is part of a longer spending commitment. Reuters reports that Alibaba plans to invest 380 billion yuan ($56.4 billion) in AI over the 2026–29 period, and has already spent roughly half that amount in the current year alone. Chief executive Eddie Wu told an earnings call the company expects to break even on AI-related capital expenditure within three years, based on current average gross margins.
Burry was not entirely dismissive of Alibaba’s technology. He said the company was ‘making serious inroads’ in the low-cost large language model race in the United States and called it an ‘impressive’ disruptive force. His objection is structural, not technological: shareholder dilution, not competitive position.
That shareholder-dilution concern sits awkwardly alongside one aspect of the placement: despite Alibaba’s share price falling on the news, the deal was oversubscribed approximately three times, according to people familiar with the situation cited by the South China Morning Post. Quartz, citing Bloomberg, reported institutional demand running at roughly three times the available shares.
Company insiders moved in the same direction as those institutional buyers. The South China Morning Post reports that chairman Joe Tsai purchased approximately HK$80 million worth (720,000 shares) of Alibaba ordinary shares on Monday, while chief executive Eddie Wu bought approximately HK$40 million worth (350,000 shares), for a combined outlay of roughly HK$120 million (approximately US$15.3 million), according to Hong Kong stock exchange filings.
Alibaba’s stock remains under prolonged pressure from multiple directions. Its US-listed shares are more than 60% below their 2020 peak, weighed down by Beijing’s tech crackdown, a slowing Chinese economy, fierce domestic competition, and geopolitical tension. The question now is whether a heavily oversubscribed $10.2 billion placement, backed by management’s own capital, shifts the trajectory on AI returns before Burry’s threshold comes into view.