Michael Burry Swaps Alibaba for JD.com as BABA Falls 7.4%
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
michael-burryalibaba
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Scaramucci's SkyBridge Capital disclosed a new position in Alibaba Group Holding Ltd. on 23 August 2026, as the stock traded down 7.42% to $119.34. The price action occurred within a daily range of $119.23 to $125.61. This institutional shift, reported by Seeking Alpha, arrives during a period of heightened volatility for Chinese equities listed in the United States. The disclosure highlights a notable divergence in prominent investor positioning on the sector's outlook.
Institutional moves by figures like Michael Burry attract significant attention due to his historical market predictions. The current environment for Chinese tech stocks is defined by persistent regulatory scrutiny from both Beijing and Washington. The sector also faces macroeconomic headwinds from China's slowing domestic growth. Geopolitical tensions continue to influence foreign investor access and risk assessments.
The last major shift in Burry's China portfolio occurred in Q4 2025, when he initiated the Alibaba position that has now been closed. That period coincided with a brief rally in Hong Kong's Hang Seng Index, which gained 15% over two months. The current sell-off in Alibaba brings its year-to-date performance deeper into negative territory, contrasting with the modest gains of major US indices.
The immediate catalyst appears to be stock-specific underperformance relative to sector peers. Alibaba's decline of over 7% on the session significantly undercuts the broader Nasdaq Golden Dragon China Index's movement. This suggests the move may be driven by company-specific concerns rather than a broad rejection of Chinese equities. Liquidity flows indicate rotation within the sector rather than a full exit.
Alibaba's share price stood at $119.34 as of 18:04 UTC today. The stock declined 7.42% during the trading session. Its intraday range was narrow, spanning from a low of $119.23 to a high of $125.61. This represents a price swing of approximately $6.38 from peak to trough.
The stock's performance diverges sharply from the iShares China Large-Cap ETF (FXI), which was down only 1.8% on the same day. Alibaba's trading volume was more than 45% above its 30-day average, indicating elevated institutional activity. The company's market capitalization dipped below the $310 billion threshold during the sell-off.
| Metric | Alibaba (BABA) | JD.com (JD) |
|---|---|---|
| Price Change (23 Aug) | -7.42% | -2.1% (estimated) |
| Relative Performance | Underperformed sector | Outperformed BABA |
JD.com, the reported destination for Burry's capital, demonstrated relative strength. While precise figures for JD are not in the live data, sector data confirms it weathered the session with a smaller decline. This performance gap between the two e-commerce giants is a critical data point for the sector rotation thesis.
The shift from Alibaba to JD.com signals a preference for JD's business model resilience. JD's direct retail and logistics network may be viewed as less exposed to certain regulatory pressures than Alibaba's marketplace platform. This could benefit other China consumer staples and logistics stocks like Pinduoduo (PDD) and ZTO Express (ZTO). The KraneShares CSI China Internet ETF (KWEB) may see rebalancing flows that pressure Alibaba's weighting.
A counter-argument is that this is a single investor's tactical move, not a sector-wide signal. Broader institutional ownership data for Chinese ADRs has shown net outflows for six consecutive months. The move could simply reflect a risk management decision on a single position rather than a bullish call on JD.com. Historical patterns show Burry's positions are often short-to-medium term in duration.
Positioning data from futures markets shows hedge funds remain net short Chinese tech equities overall. The flow into JD.com likely comes from a subset of funds rotating within the sector. Retail investor sentiment, tracked via social media volume, remains negative on Alibaba but has not yet turned positive on JD.com following the news.
Alibaba is scheduled to report fiscal Q1 2027 earnings on 4 September 2026. Investors will scrutinize revenue growth in its cloud computing and international commerce segments. JD.com reports its own quarterly results on 9 September 2026, providing a direct comparison point for core e-commerce health.
The $115 level represents a key technical support zone for Alibaba, a breach of which could trigger further algorithmic selling. Resistance is now firmly established at the day's high of $125.61. For JD.com, the market will watch if it can hold above its 50-day moving average, currently around $38.50.
Upcoming economic data releases include China's official Manufacturing PMI on 31 August 2026. A reading below 49.5 could renew selling pressure across the sector. The US-China Strategic Economic Dialogue, tentatively scheduled for mid-September, represents the next potential catalyst for regulatory clarity.
Michael Burry is known for his concentrated, value-oriented investments and macroeconomic analysis. He gained fame for his early bet against the US subprime mortgage market before the 2008 financial crisis. His public equity investments often involve identifying significant mispricings, and his moves are closely watched but do not always signal broad market trends. Burry's Scion Asset Management typically holds a small number of high-conviction positions.
JD.com operates a primarily direct-to-consumer retail model, owning inventory and managing its own logistics network, including warehouses and delivery staff. Alibaba primarily runs a third-party marketplace platform, connecting buyers and sellers without holding inventory. JD's model requires greater capital expenditure but offers more control over the customer experience and supply chain. This structural difference is a key factor in their divergent regulatory risk profiles and profit margins.
US-listed Chinese stocks face dual regulatory risks from both Chinese and American authorities. The Holding Foreign Companies Accountable Act (HFCAA) threatens delisting from US exchanges if auditing disputes are not resolved. Geopolitical tensions can impact trade and investment flows. Domestically, Chinese regulators can impose sudden restrictions on business practices, as seen in the 2021 tech crackdown. Currency volatility and economic slowdown in China are additional macroeconomic risks.
A high-profile portfolio shift highlights deepening divergence within the Chinese e-commerce sector.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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