Michael Burry Shuts Down Scion Asset Management Amid Market Valuation Disconnect

This analysis is based on the SEC records and market data [0] showing that Michael Burry’s Scion Asset Management was officially terminated on November 10, 2025, with the public announcement occurring on November 13, 2025. The shutdown represents a significant market event given Burry’s track record of identifying major market bubbles before they burst [0].

The closure follows a clear pattern in Burry’s career. This is the second time he has shut down Scion Asset Management - the first occurring in 2008 after his successful bet against the housing market, when he faced public backlash and IRS audits [0]. The fund was reopened in 2013, but now faces closure again as Burry’s contrarian valuation approach appears increasingly at odds with prevailing market sentiment.

Scion’s Q3 2025 portfolio reveals the depth of Burry’s market skepticism. The fund held substantial bearish positions against AI leaders, including put options on 5 million Palantir shares ($912 million notional value) and 1 million Nvidia shares ($187 million notional value) [0]. These positions represented 66.04% and 13.51% of the portfolio respectively, indicating a massive concentrated bet against the AI trade that has dominated recent market performance.

: Burry’s fund closures have historically preceded major market corrections. The 2008 closure occurred just before the housing market collapse he had predicted. The current shutdown, following his substantial bearish AI positions, may signal his belief that a significant market correction in AI valuations is imminent [0].

: The portfolio data reveals Burry’s view that AI valuations had reached unsustainable levels. Palantir was trading at approximately 280x forward earnings at the time, representing extreme valuation multiples that traditional value investors like Burry find fundamentally unjustified [0].

: Even for a seasoned value investor with a proven track record, maintaining contrarian positions in a momentum-driven market proved challenging. The shutdown suggests Burry concluded that the psychological and market pressures were too great to continue managing through what he perceived as irrational market behavior [0].

: The disclosure of Burry’s $1.1 billion in put options against AI leaders contributed to immediate market volatility, with the Nasdaq declining 3% following the regulatory filing [0]. This demonstrates the significant market influence Burry wields despite Scion’s relatively small $155 million AUM.

: Burry’s shutdown represents a significant contrarian signal that should not be dismissed. His track record of identifying major market bubbles suggests investors should be aware of potential downside risk in AI and growth stocks [0].

: The closure reinforces growing concerns about AI stock valuations, which have reached extreme levels in some cases. Companies trading at triple-digit forward earnings multiples may face significant pressure if market sentiment shifts [0].

: The unwinding of Scion’s substantial put positions could create additional volatility in AI stocks, particularly Palantir and Nvidia, as these positions are liquidated in the market [0].

: For investors who share Burry’s valuation concerns, the shutdown may present opportunities to establish positions in quality companies at more reasonable valuations if a market correction occurs [0].

: The shutdown may trigger broader market psychology shifts, as other investors reconsider their exposure to overvalued growth stocks and momentum trades [0].

: Scion Asset Management was based in Saratoga, California, with approximately $155 million in assets under management and only 6 employees as of 2024 [0]. The fund specialized in personal investments including water, farmland, and gold, reflecting Burry’s deep value approach.

: Burry recently returned to social media after a two-year hiatus, warning that the AI boom is a bubble and suggesting the only “winning move” is to bet neither on nor against it [0]. This commentary preceded his fund’s shutdown and bearish positioning.

: SEC Investment Adviser Public Disclosure records officially confirm Scion’s registration termination on November 10, 2025, providing regulatory validation of the shutdown [1].

: Scion’s Q3 2025 13F filing revealed extreme concentration in bearish AI positions, with put options against Palantir and Nvidia comprising nearly 80% of the disclosed portfolio [0].

: Burry gained fame for correctly predicting and profiting from the 2008 housing market collapse, a feat documented in Michael Lewis’s book “The Big Short” and portrayed by Christian Bale in the film adaptation [0].