Two Investing Giants Are Quietly Facing Off
Getty Images & Barron’s
Michael Burry (left), who rose to fame after his massive bet against the U.S. housing bubble in the mid-2000s was immortalized in The Big Short, has increased his bet against Tesla and star “innovation stocks” investor Cathie Wood’s (right) Ark Innovation ETF.
Wood made a name for herself last year after her Ark ETF returned almost 150%, largely thanks to its holdings in companies including Zoom and Teladoc, both of which have thrived during the pandemic.
Burry vs. Wood:
According to its latest filings, in the last quarter, Burry’s Scion Asset Management bought put options on 235,500 shares of Wood’s Ark ETF. It also currently holds puts on nearly 1.1 million shares of Tesla worth $731 million at the end of June, an increase of over 300,000 puts in the last three months, according to Markets Insider.
Why are the puts so important? Investors profit from put options when the underlying share falls in price. So, essentially, Burry is betting against Wood’s Ark ETF and Tesla, which, it just so happens, is Ark’s No. 1 holding, accounting for over 10% of the entire ETF.
In a series of Tweets on Tuesday, Wood responded to Burry’s bets by defending her investment thesis and saying she doesn’t think he “understands the fundamentals” driving the “explosive growth” in the innovation investment space.
Someone check Christian Bale’s schedule and get Kathryn Hahn on the phone, something is brewing here.