Famed 'Big Short' investor Michael Burry used Warner Bros.
Discovery Inc (NASDAQ:WBD) as an example of a stock that continued falling after becoming undervalued before later recovering A Stock Can Fall Even After Becoming Cheap In a post on X, Burry said Warner Bros. followed a familiar pattern in value investing, where a stock continues to decline even after investors believe it has become undervalued.
In an example he shared, a stock that falls from 10 to 5 before recovering to 30 ultimately delivers a sixfold gain from the bottom, though many investors exit before that recovery occurs.
Burry said the stock had fallen so much that it became detached from the underlying business, continuing to decline even after it appeared undervalued.
"What I describe here is almost exactly WBD," Burry added.
