'The Big Short' star Michael Burry invested in a SPAC buying Harley-Davidson's electric-motorcycle unit. He might be trolling Elon Musk or nodding to Warren Buffett.
- Michael Burry built a $10 million stake in a SPAC buying Harley-Davidson's electric-motorcycle unit.
- "The Big Short" investor, who bet on a key SpaceX rival last year, may be trolling Elon Musk.
Michael Burry recently revealed a $10 million bet on an electric-motorcycle maker. The investor may be warming up to special-purpose acquisition companies (SPACs), thumbing his nose at Tesla and SpaceX CEO Elon Musk, or placing a bold wager on a business with historical links to Warren Buffett.
Burry is best known for his massive bet against the mid-2000s housing bubble, which was immortalized in the book and movie "The Big Short." The Scion Asset Management boss also laid the groundwork for the meme-stock movement by investing in games retailer GameStop in 2019, and clashed with Musk last year over Tesla's heady valuation.
Scion held 1 million shares of AEA-Bridges Impact, a SPAC created by AEA Investors and Bridges Fund Management, at the end of December. The blank-check company had struck a deal to acquire LiveWire, Harley-Davidson's electric-motorcycle division, a couple of weeks before that.
AEA-Bridges Impact plans to finance the merger with the $400 million it raised from its stock-market debut in October 2020, plus $100 million from both Harley-Davidson — set to own 74% of LiveWire after the transaction closes — and Kymco, a Taiwanese powersports company.
Burry has previously warned that companies going public via SPAC deals aren't well-vetted and may not be the best businesses. However, Scion also bought a piece of Vector Acquisition, a SPAC that agreed to to buy SpaceX rival Rocket Lab, in the first quarter of 2021.
It's notable that Burry, a value investor famous for sniffing out cheap and staid businesses, has now made a couple bets on aggressively valued, unproven technology companies. In the same year that he ramped up, then exited a bearish wager against Tesla, he backed businesses in Musk's core industries of space transportation and electric vehicles.
Burry, who studied Buffett closely as a young investor, called Apple a "Buffett stock" nearly two decades before the Berkshire Hathaway chief made the iPhone maker the largest holding in his portfolio. His LiveWire investment could be a nod to Buffett, who loaned $300 million to Harley-Davidson during the financial crisis.
"I kind of like a business where your customers tattoo your name on their chest," the Berkshire boss quipped several years later.
LiveWire's SPAC deal values it at about $1.8 billion. The business only made 387 bikes in 2021, generating $33 million in revenue and a $66 million pre-tax loss. The company's executives are targeting 100,000 units, $1.8 billion in revenue, and $64 million in profits in 2026.