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Unlock BMInsider PRO →Michael Burry — the Scion Asset Management founder immortalized in "The Big Short" — has quietly been accumulating one of his largest disclosed positions in recent years. SEC filings and our analysis of 13F data through Q4 2025 suggest Burry has materially increased his Alibaba Group Holdings (BABA) exposure — a bet increasingly drawing attention from institutional investors who follow his work.
The Position: What the 13F Data Shows
Scion Asset Management's Form 13F (Q4 2025) discloses BABA as one of the fund's top-five holdings by market value. This follows accumulation beginning in Q2 2025, when BABA first appeared in Scion's disclosed portfolio. By Q3 2025, the position had grown by an estimated 340%. The Q4 2025 filing shows it now representing approximately 18% of disclosed long equity assets.
For context: Burry is known for extreme concentration. When he builds a position to 18% of a portfolio, it is not a speculative trade — it is a thesis with a hard fundamental foundation.
Three Pillars of the Thesis
1. Valuation Compression at Generational Extremes
Alibaba currently trades at approximately 8–10x forward earnings — a discount of 55–65% to its Western peers (Amazon: ~32x, Microsoft: ~28x). On price-to-free-cash-flow, the discount is even more pronounced: Alibaba generates approximately $20–22 billion in annual FCF, implying a yield of over 10% at current prices.
This is not a business in decline. Alibaba's core China commerce segment stabilized in 2024, its cloud division returned to double-digit growth in Q3 2025, and international commerce (Lazada, AliExpress) grows at 30%+ annually. The market applies a geopolitical discount — regulatory uncertainty, Taiwan risk, trade tensions — that Burry appears to believe is excessive relative to fundamental reality.
2. The Buyback Machine
Alibaba has executed over $35 billion in share buybacks since 2023, reducing share count by approximately 14%. Management authorized an additional $25 billion program through 2027. At current prices, the company retires roughly 6–7% of shares outstanding annually — the most powerful form of shareholder value creation when shares trade this far below intrinsic value.
A company buying back 6–7% of itself annually at a 60% discount to fair value is precisely the kind of asymmetric setup Burry's models are designed to identify.
3. The Regulatory Overhang Is Clearing
China's regulatory crackdown on technology — which began with the aborted Ant Group IPO in late 2020 — appears structurally behind us. Beijing's messaging since mid-2023 has been unambiguously pro-growth for tech. Premier Li Qiang met with Jack Ma in September 2024 — a symbolic gesture with profound signal value. The fine cycles are over. The era of regulatory escalation has ended.
The Asymmetry Calculation
Burry's methodology focuses on identifying scenarios where he can be "comfortably wrong at -20% and right at +200%."
Current BABA price: ~$79
- Bear case (20%): Full decoupling scenario → ~$45 (-43%)
- Base case (55%): Regulatory stability, moderate growth, continued buybacks → ~$115 (+46%)
- Bull case (25%): Re-rating to fair value as Western institutions re-allocate → ~$175 (+122%)
Probability-weighted expected return: approximately +47%.
The BMI Asymmetry Score: BABA — 91/100
Running BABA through our Asymmetry Engine produces a score of 91/100 — "Ultra Asymmetric":
- P/S ratio 1.4x (below 3x threshold) → +25 pts
- EBITDA margin 26% (above 15%) → +20 pts
- Active $25Bn buyback program → +15 pts
- Institutional ownership building (Tepper, Burry, sovereign wealth) → +10 pts
- RSI 34 (approaching oversold) → +18 pts
- FCF yield 10.2% → +3 pts
Risks to Monitor
- Taiwan geopolitical escalation — near-total institutional withdrawal risk
- Regulatory re-emergence — second campaign cannot be ruled out
- Capital repatriation restrictions — would fundamentally alter the thesis
- Execution risk — cloud and international bets must convert to sustained profitability
This article reflects BMInsider's analytical framework and does not constitute investment advice. All 13F data cited reflects publicly available filings.