18-05-2021 The Big Short investor Michael Burry makes first investments in shipping, By Holly Birkett, TradeWinds
Legendary investor Michael Burry invested in shipping for the first time earlier this year by adding shares in three US-listed shipowners to his portfolio, according to regulatory filings. The head of California-based private investment firm Scion Capital Group was one of the first investors to call and profit from the 2008 subprime mortgage crisis, which was immortalised in the 2015 film The Big Short and the book of the same name.
Burry spent around $10.6m buying shipping stocks during the first three months of 2021, according to a filing with the US Securities and Exchange Commission (SEC). This would appear to be his first investments in the sector since Scion Asset Management began making regulatory disclosures with the SEC in 2016. Shipping stocks accounted for just over 10% of Burry’s portfolio as of 31 March.
Burry’s buying activity shows a slight preference for dry bulk stocks. He bought almost 355,000 shares in Genco Shipping & Trading on the New York Stock Exchange at an average price of $10.08 each. He also bought 530,000 shares in Nasdaq-listed bulker giant Golden Ocean Group during the period at an average price of $6.71. On the wet side, Burry bought more than 190,000 shares in New York-listed Scorpio Tankers at an average price of $18.46.
This sits alongside $10.8m in new investments in oil and gas companies, comprising energy giant Occidental Petroleum and oilfield services company Precision Drilling.
The SEC filing shows Burry has made another “big short” bet — this time against US electric vehicle and clean-energy company Tesla. By the end of the first quarter, he had puts against 800,100 shares of Tesla, which have a notional underlying value of $534m, the SEC filing shows. Burry had 8,001 put contracts as of 31 March, but their value, strike price or expiry dates were not disclosed in the filing.
The investor has previously criticised Tesla for relying too heavily on regulatory credits to generate profits. Scion Asset Management’s first-quarter disclosure shows the fund had $1.35bn in managed 13F securities during the period.