Down 80%: Six Stocks Bought by an Investor from "The Short Game"

Renowned short seller Michael Burry, who served as the inspiration for the protagonist in the movie *The Big Short*, is once again buying stocks that have plummeted from their highs. In his blog, Cassandra Unchained, the investor reported that he had added Mercado Libre, Adobe, Fiserv, lululemon athletica, Zoetis, and Veeva to his portfolio. Fiserv has fallen the most on this list: the stock is trading at about 80% below its March 2025 peak. Lululemon is down 79% from its December 2023 high, and Adobe is down 70% from its February 2024 peak.

“My more conservative approach is to wait until the stock falls 20% from my purchase price—this allows me to spread out my orders over time and avoid spending cash at too high a price. All of these cases are ‘falling knives,’” says Burry.

Burry refers to stocks as “falling knives” after a sharp sell-off, when the short-term risk of further declines remains high. He believes that such purchases are risky in the short term but may be justified if fundamental analysis and trading volume indicate that the market is nearing a bottom. In this case, Burry writes, he averages out his position in equal installments without waiting for a 20 percent drop from the price of his first purchase.

In a post dated June 18, Burry reported that he had purchased six such stocks: the e-commerce platform Mercado Libre at $1.63, software developers Adobe at approximately $196 and Veeva at $152.5, the fintech service Fiserv at $48, the athletic apparel manufacturer lululemon athletica at $112, and the pharmaceutical company Zoetis at $78.25. All of them have fallen sharply from their highs: from 39% for Mercado Libre to 80% for Fiserv.

Burry writes that he assesses not only the extent of a stock's decline, but also how many times the stock has changed hands since the crash.

“I studied past crises and major stock market crashes to come up with this rough estimate. Sometimes younger companies need to trade up to 10 times their trading volume before they hit bottom, whereas established companies may need only 1.5 to 3 times that volume to bring enough new shareholders on board to stabilize the stock before a new bull rally,” the expert believes.

According to the investor, during the market decline, the volume of shares traded ranged from 241% for Veeva to 1,548% for lululemon.

“These are all dream prices compared to my watchlist from a year ago. Each one represents the perfect opportunity to ‘swing for the fences’ in terms of fundamental valuation, shareholder value, and business quality. All positions are fully established,” concludes Burry.

This article was AI-translated and verified by a human editor