Michael Burry has established a new position in Deckers Outdoors as part of a "proxy swap" trade with his shares of lululemon athletica. Under the strategy, Burry retains his long-term conviction in lululemon but temporarily replaced his losing lululemon position with an undisclosed amount of Deckers Outdoors shares as a comparable industry substitute to manage his sector exposure, a maneuver known as a "wash sale." While the IRS does not allow the shareholder to use the loss to lower taxable income for that year, the disallowed loss is included in the price of the new shares, enabling a cost basis adjustment for the newly acquired Deckers shares, so a profitable sale of those shares would see capital gains lowered by the adjusted amount. Burry intends to buy back lululemon once the 30-day wash-sale window has expired.
Deckers Outdoor CorporationBurry established a new position in Deckers as a proxy swap substitute for lululemon, a notable investor buy.
Lululemon Athletica Inc.Burry temporarily replaced his losing lululemon position with Deckers but intends to buy back lululemon after the 30-day wash-sale window.
