Michael Burry Says He Would Buy Alibaba Stock When It Crashes 50%. You Shouldn’t Wait That Long.

Alibaba (BABA) stock fell over 8.5% on Friday after the company announced a massive share sale in Hong Kong to fund its artificial intelligence (AI) investments. The company issued 710 million new shares to raise $10.21 billion in what was the largest-ever primary follow-on ‌offering from a company listed in Hong Kong.

Alibaba priced the shares at an 8.4% discount to its last traded price in Hong Kong. To be sure, pricing the shares below the prevailing prices is a norm rather than an exception in such offerings, and in June, Alphabet (GOOG) (GOOGL) priced its shares at a discount of over 6% as it raised $80 billion in what was the biggest follow-on stock sale this year. Incidentally, even Berkshire Hathaway (BRK.A) (BRK.B), whose chair, Warren Buffett, is known for his value investing credentials, put $10 billion in that offering and overall put $17 billion in the search giant in Q2, which made it the conglomerate’s third-biggest holding.