Michael Burry Executes Tax-Loss Proxy Swap, Rotating $LULU into $DECK Ahead of 30-Day Window

Michael Burry has harvested a tax loss on his largest single holding, Lululemon Athletica ($LULU), and rotated the proceeds into Deckers Outdoor ($DECK), according to Stocktwits. The proxy swap allows Burry to deduct the capital loss while bypassing the IRS 30-day wash-sale rule, which prohibits repurchasing a "substantially identical" security within 30 days before or after the sale. Burry reportedly intends to repurchase $LULU once the 30-day window expires in early November, seeking to front-run the broader wave of tax-loss harvesting that typically intensifies into late October and December.
While Burry expects both consumer apparel names to track similarly during the holding period, performance has diverged significantly in 2026: $LULU is down approximately 55%, compared to a 23% decline for $DECK. The divergence highlights differing product exposure, as $DECK relies heavily on its high-performing HOKA brand—which generated $703.5 million of its $1.02 billion in quarterly revenue—while $LULU continues to face headwinds in lifestyle athleisure, marked by a 9% drop in comparable sales last quarter and a lowered corporate outlook.
Both equities currently trade near 10 times forward earnings, though consensus estimates track $DECK as a Buy with an average price target of $120.41, compared to a Hold rating and a $104.91 target for $LULU, according to Stock Analysis. With $DECK expected to report quarterly earnings during Burry’s holding window and having recently completed $338 million in share repurchases, the interim proxy presents idiosyncratic catalyst risk before the scheduled November repurchase window opens.