What's Happening?
Michael Burry, the investor known from 'The Big Short,' announced on Wednesday, November 11, 2026, via a Substack post, that he has repurchased shares of Lululemon (NASDAQ:LULU). This move comes after he sold his position in the company in October. Burry did
not disclose the size of his recent purchase or the price paid, and no SEC filing has yet reflected this transaction. Lululemon's stock closed at $107.45, down 2.65% from the previous day, having fallen to $105.98 earlier in the session. Burry described Lululemon as 'a good bet with little downside' and expressed trust in its research and product development, though he noted that new management has not addressed what he termed the 'black hole' of the brand's marketing. This buyback aligns with a plan he outlined in October to repurchase shares after the 30-day wash-sale restriction expired, suggesting a tax-loss harvesting strategy rather than a fundamental shift in his view of the company.
Why It's Important?
This investment by Michael Burry is significant because his market moves often attract considerable attention and can influence investor sentiment, particularly for stocks he publicly discusses. His assessment of Lululemon as having 'little downside' could signal to other investors that the stock, currently trading about 50% below its January peak, might be undervalued. The context of his previous sale in October and subsequent repurchase after the wash-sale period suggests a strategic tax-loss harvesting maneuver, which is a common practice among investors to offset capital gains. However, his public endorsement of the stock's potential, despite Lululemon having cut its full-year revenue outlook twice since March, indicates a belief in the company's long-term value proposition. The upcoming December third-quarter report will be a critical test for Burry's thesis, as it will reveal whether the company's performance aligns with his optimistic outlook on its limited downside.
What's Next?
The immediate next step for Lululemon and its investors will be the release of the company's third-quarter earnings report in December. This report will provide crucial data on the company's financial health and sales performance, particularly in the Americas, where comparable sales fell by 12% in the second quarter. The market will be closely watching whether Lululemon can meet or exceed its revised revenue outlook, which currently stands between $10.35 billion and $10.50 billion. A positive earnings surprise could trigger a short squeeze, as a significant portion of shares (14.69% of outstanding shares) are currently held short, potentially forcing short sellers to buy back shares and drive the price up. Conversely, if earnings disappoint, it could further validate the bear case, which is partly based on analysts expecting profits to fall, as indicated by the stock trading at 13 times forward earnings compared to 9 times trailing earnings.
Beyond the Headlines
Burry's investment in Lululemon, alongside his reported additions of Adobe and PayPal, suggests a broader strategy of investing in what he perceives as beaten-down stocks. This approach highlights a contrarian investment philosophy, where he seeks value in companies that have experienced significant price declines but which he believes retain strong underlying fundamentals or have limited further downside risk. His focus on Lululemon's research and product development, while criticizing its marketing, points to a belief in the core strength of the brand's offerings despite perceived operational weaknesses. This situation also underscores the interplay between tax strategies and investment decisions, as his repurchase after the wash-sale period indicates a sophisticated approach to managing portfolio returns and tax liabilities. The market's reaction to his public statements, even without official SEC filings, demonstrates the considerable influence individual high-profile investors can wield.
