'The Big Short' investor Michael Burry backs Estée Lauder as new CEO targets growth in China and the US
'The Big Short' investor Michael Burry's Scion Asset Management has doubled its stake in Estée Lauder, signaling renewed investor confidence as the beauty giant's new CEO leads a transformation to overcome weak demand in key markets, including North America and China.
The U.S. investor, best known for his bets against the housing market ahead of the 2008 financial crisis—portrayed in the film 'The Big Short'—now holds 200,000 shares in Estée Lauder, valued at $13.2 million, according to a regulatory filing published Thursday. This figure represents twice the number of shares Scion held at the end of December 2024.
'Burry's bet suggests belief in Estée Lauder's ability to reclaim its status as a beauty powerhouse in an increasingly competitive global market,' said Angeli Gianchandani, global brand marketing expert at New York University.
Since taking over in January, Estée Lauder CEO Stéphane de La Faverie has intensified product launches and introduced new luxury pricing tiers in an effort to reignite consumer interest following multiple quarters of sluggish growth.
'I view this as a positive for Estée Lauder amid the CEO's effort to turn around the business, though the position size of the investment is not very large,' said Dan Su, equity analyst at Morningstar.
A recently announced 90-day trade truce between Washington and Beijing has also brought some relief to the company, reducing U.S. tariffs on China from a steep 145% to 30%. The move is expected to ease pressure on global brands with high exposure to the Chinese market.
China remains a critical territory for Estée Lauder. The Asia-Pacific region, which includes China, accounted for approximately 31% of the brand's total sales in fiscal 2024.
The regulatory filing also revealed that Scion reduced the number of companies in its investment portfolio by about half, bringing the total to just seven.
Despite the renewed optimism, Estée Lauder's stock has fallen 15% year-to-date. However, shares gained around 2% on Friday following news of Scion's increased stake.
Scion Asset Management did not respond immediately to requests for comment.
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