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Michael Burry, who famously shorted subprime mortgages ahead of the 2008 financial crisis, closed out the majority of his regional bank trade in the second quarter, filings with SEC revealed Monday.
Burry's hedge fund Scion Asset Management zeroed out stakes in Western Alliance (WAL), Huntington Bank (HBAN), PacWest (PACW), and First Republic (FRCB) during the second quarter.
First Republic was seized by the Federal Deposit Insurance Corporation and sold to JPMorgan & Chase at the beginning of May. PacWest agreed to merge with rival Bank of California (BANC) in late July in a deal set to close next year.
In the first quarter, Burry spent more than $23 million betting on financial stocks during a quarter in which Silicon Valley Bank (SVB), Signature Bank, and Silvergate all went under in a matter of days.
Scion also closed out positions in Capital One (COF) and Wells Fargo (WFC), both of which were opened during the first quarter of this year.
Scion also trimmed 76% of its holdings in New York Community Bancorp (NYCB), the regional lender which acquired $38.4 billion in assets belonging to Signature Bank from the FDIC in a $2.7 billion deal.
During the second quarter, the SPDR S&P Regional Banking ETF (KRE) fell about 7%, lagging the broader Financial (XLF) sector and the S&P 500, which rose 5.4% and 8.4%, respectively, over the same period.
Shares of Western Alliance rose about 5.5% during the second quarter, while Huntington stock fell about 2% and PacWest dropped 13%, a move that came before the company's merger announcement.
During the second quarter, Scion also sold out of its positions in Chinese e-commerce and tech companies Alibaba (BABA) and JD.com (JD).
Scion did not immediately respond to requests for comment on the investments.
Burry gained fame for his moves during the 2008 crisis, in which he predicted and then profited from a collapse in residential real estate prices as early as 2007. He was portrayed as a central figure in Michael Lewis's 2010 book "The Big Short." Christian Bale later portrayed him in a 2015 film adaptation of the Lewis book.
Other notable investors including major hedge funds Bridgewater Associates, the world's biggest, and quantitative trading pioneer Renaissance Technologies adjusted their banking exposure in the second quarter.
Bridgewater sold its remaining positions in regional banks US Bancorp (USB), M&T Bank (MTB), and First Horizon Bank (FHN) after getting rid of 15 other positions in US lenders in the first quarter. It did, however, raise its holdings in Citigroup (C) and investment bank Jefferies (JEF) while also opening a small position in Capital One and nearly doubling its stake in Bank of New York Mellon (BK), according to filings from Friday.
Renaissance Technologies was a net buyer of banks in the second quarter, according to its filing. The firm opened a sizable position in Bank of America (BAC) as well as a smaller position in San Antonio, Texas-based regional lender Cullen Frost (CFR) while cutting its exposure to Bank of New York Mellon and Deutsche Bank AG (DB).
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