Michael Burry Loaded Up on Bank Stocks in Tumultuous Quarter

Famed short-seller Michael Burry loaded up on regional banks during the first quarter, including First Republic before it was bought by JPMorgan Chase & Co.

(Bloomberg) — Famed short-seller Michael Burry loaded up on regional banks during the first quarter, including First Republic before it was bought by JPMorgan Chase & Co.

His hedge fund, Scion Asset Management, snapped up 150,000 shares of the failed lender, worth about $2 million at the end of the first quarter, according to regulatory filings. First Republic’s shares had fallen more than 97% this year before it was seized by regulators and sold to JPMorgan in a government-brokered deal on May 1.

Scion also bought 250,000 shares in PacWest Bancorp, whose stock has slumped almost 79% this year amid the broader turmoil in the sector. The fund acquired 125,000 shares of Western Alliance Bancorp during the quarter. The bank’s stock is down about 48% this year.

Burry also added 850,000 shares of New York Community Bancorp, which has climbed about 20% in 2023 after hitting a year-to-date high earlier this month. Other banks Scion scooped up during the quarter were Capital One Financial Corp. (75,000 shares), Wells Fargo & Co. (125,000 shares) and Huntington Bancshares Inc. (184,900 shares).

Burry did not immediately respond to a request for comment. Scion’s US equities portfolio had a market value of about $107 million at the end of the first quarter, filings show.

Western Alliance said on Thursday that its deposits are up $1.8 billion this quarter, and that insured deposits represent about 79% of its total, as the lender seeks to distance itself from struggling regional banks. PacWest said on the same day that its deposits had fallen 9.5% the previous week after a report that the lender was in talks with potential investors.

Burry rose to fame after predicting the 2008 housing crash and was portrayed by Christian Bale in the film The Big Short. He developed a large social media following for his predictions of looming risks. In January he forecast another inflation spike and said the US was already in a recession.

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