--- title: "Why U.S. stocks need to be wary of \"big short\" liquidations? Their rise to fame is a history of bubble warnings" type: "News" locale: "en" url: "https://longbridge.com/en/news/265838736.md" description: "Michael Burry announced that his Scion Asset Management has withdrawn its registration from the SEC due to its valuation judgments of securities being inconsistent with market conditions. Burry accurately predicted the 2008 subprime mortgage crisis, and this move is seen as a strategic shift, potentially transitioning to a family office model. Investors are closely monitoring his actions" datetime: "2025-11-14T03:43:04.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/265838736.md) - [en](https://longbridge.com/en/news/265838736.md) - [zh-HK](https://longbridge.com/zh-HK/news/265838736.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/265838736.md) | [繁體中文](https://longbridge.com/zh-HK/news/265838736.md) # Why U.S. stocks need to be wary of "big short" liquidations? Their rise to fame is a history of bubble warnings After boldly betting against the AI boom, Michael Burry, the real-life figure behind the movie "The Big Short" and who accurately predicted the 2008 subprime mortgage crisis, suddenly announced that his Scion Asset Management has withdrawn its registration from the U.S. Securities and Exchange Commission (SEC). In a letter, Burry stated, "My judgment of the value of securities is not consistent with market conditions, and this situation has persisted for some time." According to Zhitong Finance APP, Scion Asset Management, which has been managing $155 million in assets since March, has long been scrutinized for its bets in search of signs of an impending bubble and clues of market over-exuberance. JP Morgan Asset Management noted in September that since the launch of ChatGPT by OpenAI in November 2022, AI-related stocks have accounted for 75% of the S&P 500 index's gains. Bruno Schneller, Managing Director of Erlen Capital Management, stated, "Burry's decision is less about 'exiting' and more about distancing himself from a game he believes is fundamentally manipulated. But don't count him out; just expect that he may temporarily step away from conventional operating modes. He might adopt a family office model to manage funds independently." Here is the development history of this most well-known contrarian in the market and why investors are closely watching him: ## Past Journey: Accurate Predictions **2004 - 2008: The Era of "The Big Short"** In the mid-2000s, Burry keenly sensed the crisis in the U.S. real estate market, and this warning came well before the market collapsed. He founded his hedge fund, Scion Capital, in November 2000. In the mid-2000s, through Scion Capital, he shorted subprime mortgage bonds using credit default swap instruments. Previous reports indicated that by the second quarter of 2005, Scion Capital had an exposure of $1 billion in credit default swap contracts on subprime mortgage bonds, as Burry believed the market was about to collapse, leading him to make this bet. During the market crash from 2007 to 2008, his bet ultimately yielded huge returns. Since then, Burry has gained widespread fame. Michael Lewis recounts this story in his book "The Big Short: Inside the Doomsday Machine." The book was later adapted into the film "The Big Short," in which actor Christian Bale portrayed Burry. However, after the excitement faded, Burry closed Scion Capital and temporarily ceased managing other people's funds. Reports indicated that he closed the company in 2008 due to an overwhelming number of lawsuits and audits from the IRS **2013 - 2020: The Road to Return** In 2013, Barry made a comeback and renamed his company Scion Asset Management. This time, his concerns focused on the so-called "index bubble." In a 2019 interview, he compared the rise of index funds to the boom of subprime mortgage-backed securities (CDOs) before 2008. He also stated that passive investing had stripped the price discovery mechanism from the stock market. Reportedly, Barry had already bought a large amount of GameStop (GME.US) stock before it became a hot concept stock and surged significantly. However, he sold all his shares at the end of 2020, thus missing out on GME's 2000% increase it reached at one point in 2021. **2021: The Bet on Tesla (TSLA.US)** In May 2021, relevant documents showed that Scion held a large number of put options on Tesla, indicating that Barry believed the electric vehicle manufacturer's valuation had become disconnected from its fundamentals. A report stated that by the end of the first quarter of 2021, the company had created put options for 800,100 shares of Elon Musk's company. Regarding GameStop's rapid rise in 2021, it was reported that Barry tweeted in January that this short squeeze was "abnormal, crazy, and dangerous," calling for legal and regulatory penalties against such trading behavior. At this point, Barry had already cleared his position in GameStop. ## 2025: The Warning on Artificial Intelligence Barry chose to act low-key once again. However, in recent weeks, he has re-entered the public eye with his unique insights on artificial intelligence and technology companies. He also changed his profile name on the X website to "Cassandra Unbound." Cassandra was a Toltec princess whose accurate prophecies were destined to go unheeded. **October 31, 2025** Barry shared a photo of actor Christian Bale portraying him in the movie "The Big Short," writing: "Sometimes we see bubbles. Sometimes we can take measures to address them. Sometimes the only wise choice is to not participate." His posts before October 31 seemed to have been deleted. **November 4, 2025** In recent weeks, Barry has intensified his criticism of tech giants, including NVIDIA (NVDA.US) and Palantir (PLTR.US). He questioned the rapid development of cloud computing infrastructure and accused these large vendors of exaggerating the profits from their massive hardware investments through improper accounting practices. Barry tweeted that he spent about $9.2 million to purchase approximately 50,000 put options on Palantir. He stated that these options would allow him to sell the company's stock at $50 per share in 2027. Palantir's trading price on Thursday was $178.29 per share, giving the company a market capitalization of $422.36 billion **Bearish Investment Bets** Last week, Scion Asset Management, under Barry, shorted popular stocks in the artificial intelligence sector, Nvidia and Palantir, indicating his cautious stance on the AI trades that have significantly driven the market up this year. He also revealed new buy operations for Pfizer (PFE.US), Halliburton (HAL.US), Molina Healthcare (MOH.US), and Lululemon (LULU.US). Soon after, Palantir CEO Alex Karp retaliated, criticizing short sellers and pointing out Barry. Karp stated, "The two companies he is shorting are the most profitable ones, which is strange. To think that chips should be shorted is absurd—it's crazy." **November 10, 2025** However, this did not change Barry's mind. On Tuesday, Barry issued another warning, targeting the accounting practices of large tech companies. He stated that some large cloud service and AI infrastructure companies artificially inflate profits by extending the depreciation cycle of their assets. In a post on Twitter, he mentioned several major companies, including Oracle (ORCL.US), Meta (META.US), Google (GOOGL.US), Microsoft (MSFT.US), and Amazon (AMZN.US). He estimated that these accounting practices could underestimate depreciation by about $176 billion between 2026 and 2028, leading to inflated profits reported across the industry. In the same post, he indicated that more details would be released on November 25. Barry's personal profile on Twitter is named "Cassandra Unbound," a nod to the Greek mythological figure Cassandra, who was cursed by Apollo to only speak true prophecies that no one would believe. **November 13, 2025** A document from the U.S. Securities and Exchange Commission and a message posted by Barry on his personal social media account confirmed that Scion Asset Management terminated its registration with the SEC on November 10. On social media platforms, several posts circulated a letter dated October 27, written by Barry to Scion Asset Management investors, stating that he is gradually shutting down his fund. **Awaiting November 25, 2025** In his latest post, Barry again mentioned the date November 25, stating, "After November 25, we will usher in a better time." 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