Alibaba, JD's Hong Kong shares rally as Michael Burry takes stakes
By Ambar Warrick
Investing.com -- Hong Kong-listed shares of Chinese technology giants Alibaba (HK:9988) and JD.com (HK:9618) rallied on Thursday after Michael Burry’s Scion Asset Management fund revealed it had taken positions in the two firms.
Alibaba jumped nearly 4%, while JD.com surged more than 7% in Asian trade, with the latter also ranking as the best performer on Hong Kong’s Hang Seng index. The index jumped over 2% for the day, as gains also spilled over into other major technology stocks.
Scion Asset Management’s latest 13F filing, released this week, showed that the fund had bought 50,000 shares of Alibaba (NYSE:BABA) worth $4.4 million, and had also opened a $4.2 million position in JD.com (NASDAQ:JD) in the fourth quarter of 2022.
Burry had famously shorted the 2008 subprime mortgage crisis, and was portrayed by actor Christian Bale in the 2015 film The Big Short, which depicted the events leading up to the crisis.
The positions in the two Chinese technology giants likely reflect optimism over a Chinese economic reopening, after the country began scaling back its strict zero-COVID policy in December.
The country had also softened its harsh rhetoric against its internet giants by recently scrapping investigations into alleged antitrust activities. A government crackdown on China’s tech giants had triggered steep drops in valuations over the past three years.
This saw Chinese tech stocks trading at multi-year lows, which analysts had pointed out made them ripe for bargain buying. China’s reopening likely acted as a trigger for such an event, with the Hang Seng index up about 45% from lows hit in October.
Alibaba is up 30% in the past two months, while JD is trading down 0.7%.
Still, recent economic data has painted a somewhat middling picture of a Chinese recovery. While the services sector saw a sharp rebound in activity, China's manufacturing sector is still struggling from COVID-related headwinds.
Inflation also failed to pick up in January, with consumer spending remaining dull despite the week-long Lunar New Year holiday.
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