Michael Burry Shuts Down Scion Asset Management: Market Valuation Conflict and AI Skepticism

This analysis is based on multiple reports [1][2][3][4] published on November 13, 2025, regarding Michael Burry’s decision to shut down Scion Asset Management. The famed investor, known for predicting the 2008 housing crisis, has deregistered his hedge fund with the SEC effective November 10, 2025, citing a fundamental disconnect between his value-based investment approach and current market dynamics [1][2]. The closure affects approximately $155 million in assets and marks the second time Burry has shuttered a fund, following his 2008 closure of Scion Capital after his successful housing market bet [2][3].

Burry’s decision reflects a deep philosophical conflict between traditional value investing and the current AI-driven market exuberance. His statement that his “estimation of value in securities is not now, and has not been for some time, in sync with the markets” [1][2] suggests a prolonged period of difficulty finding attractive investment opportunities. This aligns with his historical pattern of stepping away during periods of market irrationality - similar to his 2008 fund closure after successfully shorting the housing market [2][3].

The timing is particularly significant as AI stocks have driven approximately 75% of S&P 500 returns since ChatGPT’s launch in November 2022 [1]. Burry has been increasingly vocal about what he perceives as unsustainable valuations and questionable accounting practices at major tech companies, estimating $176 billion in understated depreciation through 2028 [1][3].

Despite the fund closure, Burry has maintained active market positioning through significant bearish bets against AI stocks. His recent positions include $9.2 million in put options against Palantir (PLTR) with a $50 strike price for 2027 expiration [2][4]. With Palantir trading around $178-185 in November 2025, these positions are currently deeply underwater [4][5]. However, this follows Burry’s historical pattern of taking contrarian positions that may take years to materialize, similar to his housing market short [1][3].

The actual exposure of $9.2 million represents a relatively small position compared to market capitalization and daily volumes, though media initially reported a $912 million notional value before Burry clarified the actual exposure [2][4].

By deregistering with the SEC, Burry eliminates requirements for public disclosure of holdings, providing greater flexibility in investment strategy [1][4]. This move could facilitate either retirement from public investing or transition to private/family office operations with enhanced privacy [4]. His X profile titled “Cassandra Unchained” suggests continued market commentary, while his hint of “much better things Nov 25th” indicates potential new ventures [1][3][4].

Burry’s closure adds to growing skepticism about AI valuations and may trigger increased scrutiny of tech company accounting practices [1][3]. His warnings about aggressive depreciation schedule manipulation at major tech companies could lead to more detailed analyst coverage and potential regulatory attention [1].

The shutdown highlights significant challenges for disciplined value investors in growth-driven markets. Burry’s difficulty finding attractive opportunities despite his proven track record suggests structural market changes that may disadvantage traditional value approaches [1][2][3]. This may encourage other value-focused managers to reconsider strategies in the current environment.

While Burry’s actual positions are relatively small in market terms, his public statements and track record give his warnings disproportionate weight in market sentiment [1][4]. His previous successful calls on the housing market and recent criticism of AI valuations create a powerful contrarian signal that could influence investor behavior, particularly in AI-related stocks.

• AI Valuation Bubble Risk
  : Burry’s criticism adds credibility to concerns about AI stock sustainability [1][3][4]
• Accounting Scrutiny Risk
  : Increased attention to tech company depreciation practices could reveal financial irregularities [1][3]
• Market Sentiment Risk
  : Prominent contrarian voice removal may reduce healthy market skepticism [1][3]

• Value Investing Opportunities
  : Market correction in AI stocks could create attractive entry points for disciplined investors [1][2]
• Enhanced Analysis Opportunities
  : Increased scrutiny of tech accounting may reveal undervalued companies with transparent practices [1][3]
• Strategic Timing
  : Burry’s November 25 announcement could signal market timing opportunities [1][3][4]

The immediate impact centers on Palantir and Nvidia, which may face short-term pressure due to Burry’s public criticism [1][4]. However, both stocks remain strongly supported by AI enthusiasm and institutional buying [4][5]. The November 25 announcement date represents a key catalyst point that could provide clarity on Burry’s future plans and potential market impact [1][3][4].

• SEC registration terminated November 10, 2025 [1][2][3]
• $155 million in assets under management as of March 2025 [1][2][4]
• Capital return to investors planned by year-end [1]
• Second fund closure following 2008 Scion Capital shutdown [2][3]

• $9.2 million bearish position against Palantir via 2027 put options [2][4]
• Accused major tech companies of $176 billion in understated depreciation [1][3]
• Increasingly critical of AI valuations and market exuberance [1][3][4]

• Potential family office transition to avoid disclosure requirements [4]
• November 25, 2025 announcement of “much better things” [1][3][4]
• Continued market commentary through “Cassandra Unchained” profile [1]

• AI stocks have driven 75% of S&P 500 returns since November 2022 [1]
• Growing concerns about valuation sustainability and accounting practices [1][3]
• Value investing challenges in growth-driven market environment [1][2][3]