Cult shortstop Burry has upped the ante on Lululemon's growth in the wake of the leggings scandal

American financier Michael Burry, whose play against the real estate market formed the basis of the plot of the movie "The Downgrade", increased his position in shares of Lululemon Athletica. Despite a repeat of the transparent leggings scandal, the yoga outfit maker's securities remain attractive, the legendary investor says.

"Lululemon Athletica quotes have corrected and I am building up the position a bit. The price to buy truckloads (all cash - Oninvest) remains in the neighborhood of $150 per share (16% below the current price - Oninvest). I continue to believe that at current prices the company is a tempting buyout target for founder or private equity funds," Burry wrote, without specifying when or how many shares of Lululemon he bought.

Shares of Lululemon, whose stock price collapsed 16% in January, added 2.6% at the close of trading Feb. 2 on the Nasdaq following Burry's announcement.

Burry's Scion Management fund opened a position in Lululemon with 50k shares in the second quarter of 2025 and doubled it in the following quarter. The investor, who was one of the first to predict the 2007 U.S. mortgage crisis, is a known adherent of the "barbell" strategy: he plays large downside plays on overvalued stocks while holding growth bets on a small number of market-neglected companies with large cash reserves, Seeking Alpha writes.

In January 2026, Lululemon faced a reputational crisis over its new line of Get Low leggings, which were massively criticized by female customers for being too transparent. Complaints that the fabric was see-through when squatting forced Lululemon to suspend online sales of the collection in North America. The situation was exacerbated by brand founder Chip Wilson, who called the launch of the Get Low line a " new low" and accused the board of directors of incompetence. Following the suspension of online sales and Wilson's public criticism, Lululemon's stock plummeted 6.5% on January 20. The downward trend continued until the end of January.

The biggest scandal around Lululemon leggings erupted in 2013, when it was discovered that the popular black yoga pants made of the brand's Luon fabric became transparent when bent over. The company had to withdraw them from sale, but the real reputational fallout came after a comment by the brand's founder: in an attempt to justify himself, Wilson hinted on Bloomberg Tim that the problem was not the quality of the material, but that Lululemon leggings "don't fit all women's body types." These words, perceived as fatshaming, caused a storm of outrage among customers, caused the company's stock to plummet, and ultimately forced Wilson to step down as chairman of the board at the end of 2013.

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