TLDR
- Michael Burry opened a ~3.5% position in PayPal and plans to add Salesforce and MSCI.
- Burry says software stock declines were driven by technical factors, not weak fundamentals.
- He cites a “reflexive positive feedback loop” between falling prices and stress in bank debt tied to software firms.
- PayPal rose 2.5% on Friday, partly on speculation it could attract an activist investor.
- SG Americas may be acting as a swap broker for activists, with PayPal flagged as a possible target.
Michael Burry is buying software stocks again — and he’s not shy about it.
The Scion Asset Management founder published a post on Substack Wednesday outlining why he’s been loading up on a handful of beaten-down software names. His argument is straightforward: the recent selloff had more to do with technical market mechanics than anything wrong with the underlying businesses.
Burry described a “reflexive positive feedback loop” where falling equity prices caused stress in bank debt tied to software companies, which in turn pushed those prices down further. He believes that dynamic is close to running its course.
“I do not believe the technical pressures brought on by the private credit/software debt issues are big enough to affect these stocks for much longer,” Burry wrote.
What Burry Is Buying
The biggest new position he disclosed is PayPal (PYPL), where he opened a roughly 3.5% stake. He already holds positions in Fiserv (FISV), Adobe (ADBE), Autodesk (ADSK), and Veeva Systems (VEEV). He said he planned to add Salesforce (CRM) and MSCI (MSCI) on Thursday.
One thread connecting all of these picks: none of them rely on private credit markets. That matters because retail investors have been pulling money from private credit funds for the past couple of months, and many of those loans are tied to software companies, creating the technical pressure Burry is betting against.
Burry also acknowledged that some software companies are genuinely threatened by large language models. But he doesn’t put his selected names in that bucket. He said he has “just about finished analyzing” his picks “forensically, competitively, and fundamentally.”
PayPal Rises on Activist Speculation
PayPal got an extra boost Friday, climbing around 2.5%, with part of that move tied to fresh activist investor speculation.
Analyst Don Bilson at Gordon Hackett flagged that SG Americas — the brokerage arm of Societe Generale — may be acting as a swap broker for activists, based on a review of SG’s 13F filing. Bilson suggested PayPal could be on an activist’s radar.
It’s not the first time the company has drawn this kind of attention. In February, PayPal replaced its CEO following disappointing earnings and guidance. That same month, reports surfaced that the company had attracted interest from potential acquirers.
Other names Bilson flagged as possible activist targets from SG’s filing include VICI Properties (VICI), Host Hotels (HST), and GitLab (GTLB). VICI rose 0.8% Friday, Host Hotels gained 2.3%, and GitLab was flat.
Burry’s Substack post was the primary market-moving event for most of the software names he mentioned, with several ticking higher on the news.
PayPal’s combination of Burry’s new position and the activist chatter made it one of the more active names in the group on Friday. The stock is still well below its all-time highs, which is likely part of the appeal for a value-oriented investor like Burry.
As of Thursday, Burry said his plans included adding to Salesforce and MSCI positions — though he has not confirmed whether those trades were executed.
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