The 'Big Short's' Michael Burry Has Seen His Largest Position Fall Over 50% This Year. Should Investors Sell the Stock?

Michael Burry's largest hedge fund holding, LULU, has collapsed more than 52% in 2025 following back-to-back full-year guidance cuts and deteriorating fundamentals. The athletic apparel maker reported a 9% decline in comparable sales, pinning the drop on negative brand sentiment, weakening North American demand, and product lines losing consumer traction.

Burry, known for his "Big Short" trade, has not exited the position despite the steep decline. He would add shares below $100, signaling conviction in a turnaround at depressed valuations. The stock now trades well into that zone following the selloff.

Analyst views remain fractured. Some have slashed price targets materially lower in response to the weakening sales momentum and repeated guidance reductions, while others see value emerging after the drawn-out decline.

The combination of a second consecutive guidance cut and a high-single-digit comp decline underscores accelerating operational headwinds. Burry's willingness to average down suggests he views current levels as capitulation pricing, but the negative sales trend and brand perception issues offer little near-term support.