After Investors Bought the Dip on a 13% Plunge, Burry of 'The Big Short' Warns: 'Get Out of NVIDIA'...

[Financial News] Michael Burry, the investor known as the real-life protagonist of the film The Big Short, advised NVIDIA investors to ‘get out.’ With NVIDIA shares plunging after former CEO Jensen Huang resigned, U.S. retail investors were moving in to buy the dip. Burry issued the opposite warning, telling them to ‘get out.’

According to Business Insider on the 12th (local time), Burry wrote on Substack, his paid newsletter platform, that ‘NVIDIA bulls will get another big opportunity to get out.’ Burry said Huang had led investment and capital flows across the artificial intelligence (AI) industry, not merely run a semiconductor company, and believed his departure would have a major impact.
Burry explained that NVIDIA had made large investments in AI-related companies and helped customers buy its semiconductors using special-purpose entities and borrowing structures. He also claimed that Huang had pressured customers by warning that future semiconductor supply could be reduced, prompting them to buy products in advance, including ones they did not immediately need.
Burry argued that this had created enormous leverage throughout the system and predicted that Huang’s departure could weaken these transaction structures. As a result, he explained, ‘cash flows could be cut off, and investments could be reduced or written off.’

Of course, Burry’s warning does not mean NVIDIA will lose its technological edge. Burry said, ‘NVIDIA’s business itself won’t disappear, but its growth could slow and its profit margins could fall.’ He has been betting on a decline in NVIDIA’s share price.
On the day Burry’s warning emerged, individual investors bought $111 million (about 148 billion won) worth of NVIDIA shares during the first 30 minutes after the U.S. stock market opened in New York, according to The Wall Street Journal (WSJ). This was the largest-ever purchase volume for NVIDIA shares during the first 30 minutes after the market opened.
In particular, individual investors had been betting on NVIDIA shares rising even before the announcement of CEO Huang’s resignation. According to Vanda Research, a market-flow analytics firm, a total of $42.5 million flowed into six leveraged exchange-traded funds (ETFs) designed to track twice the daily percentage change in NVIDIA’s share price from the 9th through the 11th.
[email protected] Kim Hee-sun Reporter