Here’s Why Michael Burry’s Biggest Stock Bet Will Pay Off Soon

The famous “Big Short Investor Michael Burry may soon have reason to celebrate as his largest investment, Alibaba (NYSE: BABA ), is now fully profitable or profitable.

In fact, Burry had been up on most of his 155,000 BABA shares for a while, but the initial batch of 50,000 shares was a bit controversial. Indeed, since the original Alibaba shares were acquired in the third quarter of 2023, they could have been purchased for as little as $83 or for more than $100.

This price situation in the third quarter of 2023 means that until the market open on September 24 – when Chinese shares reached $95.90 –“Big Short” it was more likely that an investor would remain in the red with 50,000 BABA shares.

Finally, given that Alibaba is in a strong uptrend and is up 13.40% over the past five sessions – with the biggest jump coming during the extended trading sessions between September 23 and 24 – Burry is almost certainly fully in the black on his investment.

Alibaba shares likely to continue rising

There is also a high probability that the investment will soon become fully profitable, even if ““Big Short” The trader bought the stock at an absolute high in the third quarter of 2023, as the current uptrend has already allowed BABA stock to rise from its September low of around $81 to its price at the time of publication of $95.90.

There is a high probability that the current rally will continue for the foreseeable future due to the recent positive news regarding Alibaba.

Alibaba lifted by avalanche of positive news

For example, on September 4, it became known that Beijing’s multi-year investigation into Alibaba over alleged antitrust practices and other issues had been concluded. Not only has Jack Ma’s company emerged from its predicament, but Chinese regulators are reportedly very pleased with its restructuring.

A series of insider stock purchases by Alibaba CEO and co-founder Joseph Tsai throughout the summer could also be interpreted as a strong show of confidence in the face of recent regulatory changes. But some have also linked it to the company’s recent initial public offering in Hong Kong.

The second half of September also saw no shortage of positive news for the e-commerce and technology giant.

For example, according to a September 23 report by the South China Morning Post, Alibaba recently partnered with Nvidia to develop autonomous driving technology and offer other computing services.

Finally, in a move likely to benefit the country’s entire ailing stock market, China has decided to cut its interest rate from 1.7% to 1.5%, just weeks after the US Federal Reserve (Fed) opted for a 50 basis point cut.