Michael Burry has sold his Lululemon (LULU) position, but the move appears to be driven largely by tax-loss harvesting rather than a complete abandonment of his investment thesis.
Burry disclosed the move in an October 5 portfolio update, saying the fourth quarter is typically tax-loss harvesting season and that he prefers to act before selling pressure intensifies later in the year.
According to MarketWatch, Burry exited Lululemon after the stock fell to roughly an 8½-year low and shifted capital into Deckers Outdoor (DECK). He reportedly intends to consider buying LULU again after the 30-day wash-sale restriction has passed.
Why it matters
Burry had previously described Lululemon as his largest position, making the sale notable. However, his view of the company had already become more cautious following its latest earnings.
In September, Burry said his estimate of Lululemon's intrinsic value had fallen substantially after weaker assumptions for U.S. and China growth, declining comparable sales and pressure on operating margins.
That makes the latest move more nuanced than a simple bullish-to-bearish reversal.
The takeaway: Burry is currently out of LULU, but his sale appears to combine deteriorating fundamentals with tax-loss management. The next thing to watch is whether he actually rebuilds the position once the wash-sale window expires.