Burry says he sold Alibaba, calling it pricey before share sale

Michael Burry criticized Alibaba Group Holding Ltd. shares as overvalued and disclosed that he recently exited his position in the Chinese tech giant in order to build a “large” position in rival online retailer JD.com Inc.

“I planned to move most of it back after a month or two.

No longer,” Burry said in a post on Substack, adding that Alibaba’s share price would have to “fall by half for me to get interested again.” The remarks by the Scion Capital Management founder, made famous in The Big Short for his bets against the US housing market prior to the the 2008 global financial crisis, follow Alibaba announcing its plan to raise about HK$80 billion ($10.2 billion) via a share sale to fund its AI investments — which would be Hong Kong’s largest follow-on offering by a company on record.

Read More: Alibaba Seeks $10 Billion From Share Sale for AI Expansion “I cannot bless share issuances,” he said, adding that he expects return on invested capital from the company to continue declining.

Alibaba reported a 75% profit decline for the quarter ended in June as it ramped up AI-related capital spending, further spooking investors about future returns from the Chinese tech sector.

The company’s American Depositary Receipts are down 18.6% for the year and fell 8.6% Friday.

Its Hong Kong-listed shares are also down 13.9% for the year so far.

Burry had disclosed in April that he built a new position in Alibaba.

The Chinese firm said separately on Sunday that it priced the offering at HK$112.70 per share, compared with the Hong Kong market closing price of HK$123 on Friday.

This story was originally featured on Fortune.com