Burry buys PayPal, beaten-down software stocks

Investing.com -- Michael Burry, known for his "Big Short" bet against the housing market, is buying beaten-down software stocks, saying the recent decline was driven by technical factors rather than weak business fundamentals.

Burry said in a Wednesday Substack post that a "reflexive positive feedback loop" between falling equity prices and stress in bank debt tied to software companies accelerated their declines, creating a buying opportunity.

"I do not believe the technical pressures brought on by the private credit/software debt issues are big enough to affect these stocks for much longer," he wrote.

Burry disclosed he opened a roughly 3.5% position in PayPal, while maintaining holdings in Fiserv, Adobe, Autodesk and Veeva. He said he planned to add positions in Salesforce and MSCI on Thursday. None of these companies rely on private credit markets, Burry said.

Retail investors have been pulling money from private credit funds for the past couple months, with many of the loans tied to software companies.

Burry said he sees several companies seriously affected by advanced large language models for specific reasons related to their business models. "I do not see this for my selected companies and a good number of others, all of which I have just about finished analyzing forensically, competitively, and fundamentally as to investment potential," he wrote.rn-

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