Michael Burry, the hedge fund manager who famously predicted the 2008 financial crash, has taken out a short position against Cathie Wood’s ARK Innovation exchange-traded fund (NASDAQ: ARKK).
Burry, whose actions in 2008 were documented in The Big Short book and Oscar-winning film, had put/sell options over 235,500 shares in Woods’ fund at the end of June, according to its latest filings.
The position is held by Scion Asset Management, an investment firm founded by Burry, and was worth almost US$31mln.
Burry taking a short position in the ARK ETF is perhaps not surprising.
Known for contrary thinking and big bets backing his calls, Burry has been a consistent seller of shares of Tesla Inc (NASDAQ:TSLA), the electric vehicle maker that is one of the ARK fund’s major holdings.
ARK is one of the new breeds of active ETFs, where the fund manager picks stocks rather than just tracking an index and the innovative fund enjoyed a fantastic year in 2020 as early-stage tech stocks boomed.
This year has been tougher with ARK Innovation ETF down around 6% down so far on concerns about the valuation of tech stocks, something that Burry has regularly highlighted, though it has still more than doubled in value compared to the start of 2020.
Filings from Scion also revealed that Burry had further increased his bearish position in Tesla to 1.1mln shares, up from 800,100 in the first quarter.
In February, he tweeted: “My last Big Short got bigger and Bigger and BIGGER,” referring to Tesla’s surge in market capitalisation.
“Enjoy it while it lasts,” he said at the time.