Alibaba Group’s (HK:9988) (NYSE: BABA) Hong Kong shares rallied to a seven-month high on Friday after Michael Burry’s investment firm hiked its stake in the e-commerce giant and several of its Chinese peers.
Alibaba surged over 7% to HK$85.80- its highest level since October 2023. The stock was the best performer on the Hang Seng index, which rose 0.9%.
Burry’s Scion Asset Management increased its stakes in Alibaba and peer JD.com (HK:9618) (NASDAQ: JD), with the latter becoming its biggest holding in the first quarter, a 13-F filing showed earlier this week. Scion increased its stake in JD by 80%.
Alibaba was the fund’s second-biggest holding, with Scion increasing its position in the e-commerce giant by 50,000 shares to 125,000 shares, worth around $9 million.
Burry, who famously predicted and shorted the 2008 U.S. housing crisis, has been buying into heavily discounted Chinese technology stocks over the past year, on bets that the sector will rebound tracking a broader post-COVID recovery in the Chinese economy.
While Chinese stocks fizzled in 2023, Burry’s bet now appears to be bearing fruit so far in 2024. Alibaba is trading up 14% so far in 2024, while JD.com is up 21%.
The gains came even as Alibaba disappointed with its first-quarter earnings. JD, however, beat expectations with its first-quarter earnings on Thursday.
Still, the broader Chinese stock market marked a strong rebound over the past two months, as global investors slowly warmed up to local stocks amid persistent government support.
China was also seen winding down a regulatory crusade against its internet giants over the past year, as Beijing looked to all avenues to boost growth.
