Famed investor Michael Burry, best known for predicting the 2008 housing collapse depicted in “The Big Short,” has executed a strategic tax-loss sale of Lululemon Athletica Inc. (NASDAQ: LULU) after shares hit an 8.5-year low.

Burry swapped his LULU position for shares in Deckers Outdoor (NYSE: DECK), using the footwear and apparel company as a temporary proxy to maintain similar market exposure.

The move is designed to comply with IRS wash-sale rules, which prohibit claiming a tax loss if the same or substantially identical security is repurchased within 30 days of the sale.

Lululemon shares plummeted to $91.28 on Monday, capping nine consecutive sessions of losses and marking one of the stock’s worst stretches in nearly a decade.

The prolonged selloff has been driven by weak fiscal second-quarter 2026 results, in which Americas comparable sales dropped 12% and management cut full-year revenue guidance.

Burry explained his reasoning directly, writing: “The big one is LULU. I swapped my LULU shares for Deckers Outdoor (DECK) shares as a proxy and as an investment I like in its own right. I expect whatever forces cause LULU to recover over the next month before I can buy it back again and keep the tax loss, well, those forces will affect DECK too.”

He added that both companies share meaningful similarities, noting: “Both are remarkably similar though LULU is more discounted in some ways.”

Some followers interpreted the sale as a signal that Burry was abandoning his long-held bullish thesis on Lululemon, prompting him to respond directly through his Substack.

“I’m not throwing in the towel. I will be back after the wash period,” Burry wrote, making clear his intention to repurchase LULU shares once the mandatory 30-day window expires.

One subscriber raised concerns about Lululemon’s technical breakdown below the key $100 level, arguing that stocks in similar situations often drift toward the $60 to $80 range even after temporary rebounds.

Burry acknowledged the pattern, responding: “Still, my normal MO would be to buy at 100, then wait 20% and buy at 80 or better. BUT this 100 to 75 rule seems to be stronger than most patterns, so I respect it.”

He also conceded the inherent uncertainty in his approach, writing: “If LULU is taken out in the next 30 days, I will have lost this decision, which I base on probabilities, but not a certainty.”

On retail trading platform Stocktwits, sentiment around LULU shifted to “neutral” from “bearish,” suggesting some investors are beginning to reassess the stock’s risk-reward profile at current levels.

One Stocktwits user noted the dramatic valuation collapse, writing: “From mid 2020 to mid 2025 this company was valued over $300. Was Wall St correct with this valuation? Doesn’t look like it. Now, after buying back ~15% of their shares since 2020, they are valued at $93.”

LULU stock has fallen approximately 55% year-to-date, making it one of the worst-performing large-cap consumer discretionary names in the current market cycle.