In this article, we discuss the 3 stocks that Michael Burry was wrong about. If you want to read about some more stocks that Michael Burry was wrong about, go directly to Michael Burry Was Wrong About These 7 Stocks.
3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Percentage Decline in Share Price (YTD): 21.20%
Alphabet Inc. (NASDAQ:GOOG) is a California-based technology firm. Securities filings reveal that Scion Asset Management owned 6,500 shares of Alphabet Inc. (NASDAQ:GOOG) at the end of March 2022 worth $18 million, representing 8.97% of the portfolio. Burry had first bought the stock in the fourth quarter of 2019. The stake comprised over 8,000 shares purchased at an average price of over $1,000 per share. This holding was sold off by the second quarter of 2019 and a new position was opened in early 2022.
On June 2, Piper Sandler analyst Thomas Champion maintained an Overweight rating on Alphabet Inc. (NASDAQ:GOOG) stock and lowered the price target to $2,775 from $2,900, noting that group multiples have declined and are 40% off recent highs in the digital ad sector.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG), with 2.3 million shares worth more than $6.6 billion.
“In contrast, we made a different kind of mistake about a decade ago. Google, now Alphabet Inc. (NASDAQ:GOOG), performed very well for us while we owned it. The company kept outperforming our assumptions and we kept lowering them to be conservative. “Trees do not grow to the sky.” The stock kept going up and our value grew but did not keep pace with the stock. It hit our estimate of fair value and we sold it with a nice gain, patting ourselves on the back. We kept following the company and what they actually did over the next several years was roughly double the assumptions we used to value it. Therefore, our value was too conservative, and we sold it too cheaply, missing many years of compounding. Fortunately, we experienced some volatility several years ago that allowed us to purchase Alphabet Inc. (NASDAQ:GOOG) (Google) again with a margin of safety.”