5 Times Michael Burry’s Market Crash, Other Predictions were Wrong

2. Robinhood Leading to Gamification of Stocks

Source: Twitter, February 2021

With the rise of retail investor interest in stocks, Robinhood, the trading application, has registered remarkable user growth over the past few months. However, just as meme stocks were becoming a topic of discussion early this year, Burry took to Twitter to outline his view on the application, saying that he believed it had led to the gamification of stocks and comparing it to a fun for all ages casino. Despite this bleak outlook, Robinhood has continued to soar and plans to go public soon at a $40 billion valuation. 

One of the top holdings in the Burry portfolio is Facebook, Inc. (NASDAQ: FB), the tech firm that owns popular social platforms like Instagram and WhatsApp. At the end of March, the Scion chief had call options on 550,000 Facebook, Inc. (NASDAQ: FB) shares worth $161 million. 

At the end of the first quarter of 2021, 257 hedge funds in the database of Insider Monkey held stakes worth $40 billion in Facebook, Inc. (NASDAQ: FB), up from 242 in the preceding quarter worth $38 billion. 

In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Facebook, Inc. (NASDAQ: FB) was one of them. Here is what the fund said:

“We continued to keep our learnings from 2020 in mind during the quarter as we sought to increase the up capture of the portfolio. We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks, including Facebook, while trimming our weighting to stable names, which now represent 47% of the portfolio. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”