Here's how much Michael Burry is down on his Nvidia stock bet

Scion Asset Management’s Nov. 3 filing revealed Michael Burry bought one million put options on Nvidia—tied to roughly 1 million shares with a notional value near $186 million—and after Nvidia’s ~5% rally on Nov. 20 that added about $205 billion in market value following strong Q3 results the position may now show an unrealized loss exceeding $9 million as NVDA traded above $195. Burry escalated his bearish case on social media, accusing Nvidia and other high‑growth tech firms including Microsoft and OpenAI of suspicious revenue recognition that could be viewed as fraudulent and renewing criticism of Nvidia’s capital allocation. He cites since‑2018 figures—about $205 billion in net income, $188 billion in free cash flow, $20.5 billion in stock‑based compensation, $112.5 billion in buybacks and a 47 million increase in share count—to argue stock‑based comp effectively eroded owners’ earnings, framing a longer‑term valuation and governance critique despite the market’s recent move higher.

Analysis

Scion Asset Management’s Nov. 3 regulatory filing disclosed approximately one million put options on Nvidia, a position tied to roughly one million NVDA shares with a notional value near $186 million. Nvidia’s ~5% intraday rally on Nov. 20—which the article says added roughly $205 billion in market value after strong Q3 results—and an opening above $195 have potentially pushed the disclosed put position into an unrealized loss exceeding $9 million, though exact strike prices and deltas were not provided.

Michael Burry amplified his bearish case on social media, alleging “suspicious revenue recognition” at several high‑growth firms including Microsoft and OpenAI and renewing criticism of Nvidia’s capital allocation. He cites since‑2018 figures of about $205 billion in net income, $188 billion in free cash flow, $20.5 billion in stock‑based compensation, $112.5 billion in buybacks and a 47 million increase in share count to argue that stock‑based comp has materially diluted owners’ earnings.

The filing signals a high‑conviction bearish hedge or directional bet but is difficult to quantify without strike/delta data; the market’s positive reaction to earnings has reduced the immediate effectiveness of that put position. Investors should treat the headline filing as a sentiment signal rather than conclusive evidence of company distress, monitor near‑term volatility impact on option P/L, and watch the substantive issues Burry raises—share‑count trends, buyback funding and revenue recognition—for longer‑term governance risk that could alter valuations if corroborated.

Key Decisions for Investors

• Reassess any existing short or put exposure to NVDA in light of the ~5% post‑earnings rally and potential mark‑to‑market losses; avoid increasing naked bearish positions without knowing strike and delta details
• Monitor forthcoming NVDA disclosures and quarterly commentary for signs of revenue recognition issues or material changes in share count and buyback funding, as those items would materially affect long‑term valuation
• If you are long NVDA, consider hedging near‑term earnings/volatility risk with collars or protective calls rather than outright selling given strong recent earnings momentum
• Treat the Scion filing as a positioning signal and not definitive fundamental proof; maintain position sizing discipline and use options/hedges to manage asymmetric risk until governance or accounting allegations are independently substantiated