Michael Burry Exits Alibaba to Invest in JD.com

Michael Burry, founder of Scion Capital Management, exited his position in Alibaba Group Holding Ltd. after characterizing the company's shares as overvalued. He shifted his capital into rival online retailer JD.com Inc., stating that Alibaba's share price would need to fall by half before he would consider reinvesting.

The move follows Alibaba's announcement of a plan to raise approximately HK$80 billion ($10.2 billion) through a share sale to fund artificial intelligence investments. This represents the largest follow-on offering in the history of Hong Kong. Burry criticized the share issuance and expressed expectations that the company's return on invested capital will continue to decline.

Alibaba recently reported a 75% profit decline for the quarter ending in June. The company attributed this drop to increased capital spending related to artificial intelligence.