The Trading Addict · Issue No. 67 · Wednesday August 26, 2026

Burry Wants Alibaba
in the Bargain Bin

Michael Burry wants Alibaba 50% cheaper. Plus two earnings trades — AVGO $320 put for $9.50 (Sept 2) and CRWD $155 put for $4.80 (Aug 26 after close). Wall Street's Einstein. Wednesday's PCE + Q2 GDP double release. And the semiconductor heatmap.

The Trading Addict Newsletter · by Maria Helmick
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Issue No. 67  •  Wednesday August 26, 2026

The Trading Addict Newsletter by Maria Helmick

Maria handing Michael Burry an Alibaba Group Chinese Stock certificate 'HERE YOU GO, BURRY, I HEAR YOU LIKE CHINESE STOCK' - Burry 'HMMM...' - NYC skyline, Big Short books, LIQUIDITY money burning bucket (tap to enlarge)

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Market Commentary · Alibaba (BABA)

Burry Wants Alibaba in the Bargain Bin

Michael Burry has named his price for Alibaba: another 50% off.

Michael Burry is back with another headline-grabbing prediction. The investor made famous by The Big Short says Alibaba would need to fall another 50% before he would consider buying it.

That is not a dip. That is a clearance rack.

Alibaba raised $10.2 billion by issuing 710 million new shares in Hong Kong. The shares were priced at an 8.4% discount, and Alibaba's stock promptly dropped more than 8%.

Burry's complaint is simple: Alibaba is increasingly willing to issue new shares whenever it needs money. Existing shareholders are diluted while the company finances its enormous AI ambitions. He has already sold Alibaba and moved into Chinese rival JD.com.

The Numbers Are Real. So Is the Bill.

Alibaba's AI story is real. External cloud revenue grew 45%, cloud EBITA jumped 133%, and AI-related revenue posted triple-digit growth for the 12th consecutive quarter. The AI business is reportedly running at a $7.3 billion annualized pace.

Impressive? Yes. Cheap to produce? Not even close.

Heavy AI spending is crushing near-term profitability, China's sluggish retail market is pressuring e-commerce, and the stock sale adds dilution. Alibaba may build one of China's strongest AI platforms — but shareholders are paying for it now.

Burry wants another 50% off. Other investors think today's markdown is enough.

Maria's Bottom Line

Alibaba could fall 50%, rise 50%, or come gift-wrapped with a bow — it makes no difference to me. I don't trade these types of stocks, particularly Chinese stocks. There are too many risks that have nothing to do with the company's chart, earnings, or valuation.

Burry, you can have at it.

Sources: Reuters; Alibaba investor materials. Market commentary; not investment advice.

See These Earnings Trades Below - Maria at trading desk pointing down with monitors showing heatmap AAPL/MSFT/NVDA/AMZN/META charts, MMM logo mug, Wall Street bull statue (tap to enlarge)

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» EARNINGS PLAY · AVGO · Sept 2 After Close

AVGO's Next Move The $320 Put Play - sell Oct 16 $320 put for $9.50 credit, collect $950, effective purchase price $310.50 - AVGO $356.41, put delta -0.24, strike cushion 10.2%, breakeven cushion 12.9%, last 4 earnings reactions -12.6%/+4.8%/-11.4%/+9.4% (tap to enlarge)

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AVGO Option Chain and Order Ticket - Oct 16 2026 $320 put at $9.50 limit credit (tap to enlarge)

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» EARNINGS PLAY · CRWD · Aug 26 After Close

CRWD Earnings Play Premium With a 16% Cushion - sell Oct 16 $155 put for $4.80 credit, $480 target premium, 16.0% cushion to strike, 18.6% cushion to break-even, break-even $150.20 (tap to enlarge)

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CRWD Option Chain - Oct 16 2026 $155 put at $4.80 limit credit (tap to enlarge)

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» MARKET TIDBIT

Market Tidbit - How Wall Street Got Its Einstein - Peter Tuchman the NYSE floor teletypist who became the iconic wild-haired broker (tap to enlarge)

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» WEDNESDAY MARKET PREVIEW

Wednesday Market Preview - Inflation and Growth Take Center Stage - PCE 3.7% and Q2 GDP 1.5% both at 8:30 AM ET (tap to enlarge)

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» SEMICONDUCTOR HEATMAP · AUG 25 CLOSE

Technology Semiconductor Heatmap Aug 25 2026 close (tap to enlarge)

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This Week's Report Card

Earnings Calendar · Aug 24–28

Earnings Calendar week of Aug 24-28 2026 (tap to enlarge)

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» DAY 214 · TUE AUG 25 · DAILY TRADING UPDATE

Daily Trading Update Day 214 - Tue Aug 25 2026 - $1M +$12,895, $30K -$980, $100K +$1,712, combined +$13,627

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Rob and Maria Helmick and Nick Battista · The Trading Addict Newsletter

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Educational only. Not investment advice. Trading options involves substantial risk. Past performance does not guarantee future results.