Hedge fund manager Michael Burry, whose prescient bet against the US housing market ahead of the 2008 financial crisis cemented his reputation as one of Wall Street’s sharpest contrarians, has deregistered his firm Scion Asset Management.
The move comes just days after regulatory filings revealed his bearish positions against artificial intelligence heavyweights Palantir Technologies and Nvidia, sparking debate over whether Burry was once again signalling market excess.
The Securities and Exchange Commission’s database now lists Scion’s registration status as terminated as of November 10.
Deregistration means the firm is no longer required to file periodic reports with the SEC or state regulators, effectively ending Scion’s status as a registered investment adviser.
‘My estimation of value in securities not in sync with the markets’
In a letter to investors dated October 27, seen by Reuters, Burry said he would liquidate the fund and return capital by the end of the year, aside from a small audit and tax holdback.
A person familiar with the matter confirmed the letter’s contents.
“My estimation of value in securities is not now, and has not been for some time, in sync with the markets,” Burry wrote, in a rare admission from the investor whose views have often run counter to Wall Street consensus.
Scion managed about $155 million in assets as of March, and market watchers have long scrutinised his positions for signs of emerging bubbles.
Burry, posting on X on Wednesday, hinted at future plans, saying only: “On to much better things Nov 25th.” Scion did not immediately respond to requests for comment.
Analysts see frustration with current market conditions
Bruno Schneller of Erlen Capital Management said the move appeared to reflect Burry’s dissatisfaction with prevailing market valuations rather than any intention to withdraw permanently from investing.
John Mangun, columnist, BusinessMirror, said Burry is apparently “growing increasingly desperate about the time it will take for the market to go back to its senses.”
“Senses meaning valuations that point to PE, PS, P – whatever ratios – that make more sense to him and to many. The S&P 500 companies, for example, trade at an average PE ratio of about 23 today, well above the historical average of around 18,” he said.
“Michael Burry is done with this. In a short letter yesterday, he announced that he’s liquidating funds and returning capital as his “estimation of value in securities is not now, and has not been for some time, in sync with the markets.”
Last week, Burry revealed with put options with a notional value of about $187 million against Nvidia and $912 million against Palantir as of September 30th, according to a regulatory filing.
Burry’s recent bearish positions against the two AI heavyweights reignited attention around his market calls, especially after his exchanges with Palantir CEO Alex Karp on X.
Similar public clashes have occurred before, including with Tesla CEO Elon Musk, who previously criticised Burry’s short bet against Tesla shares.
Burry exited that position in late 2021.
Scion’s portfolio turnover has historically been high, and in August, the firm disclosed sizable bearish options against major US equity indexes.
Since then, markets have logged repeated record highs.
‘The Big Short’ and a career defined by contrarian calls
Burry rose to prominence after making nearly $800 million in profit from his bet against the housing market, a story later chronicled in the book and film “The Big Short.”
His early warnings about the subprime mortgage bubble were initially dismissed, and he endured intense pressure from clients, even restricting withdrawals as he held on to the trade.
The legacy of that episode still colours perceptions of Burry’s market views.
His profile on X, “Cassandra Unchained,” references the mythological prophet doomed to be ignored despite her accuracy.
Whether his latest warnings will prove prescient remains to be seen, but the deregistration of Scion marks a notable moment in the career of one of finance’s most watched sceptics.
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