Michael Burry has been well-known in Wall Street circles for decades, but he didn’t really break into the mainstream until The Big Short movie, based on the 2010 book of the same name, highlighted his successful bet to short subprime mortgage bonds before the 2008 housing crisis.
And it was at the end of that 2015 film that producers divulged that Burry “is focusing all his trading on one commodity: water.” That’s because the global water supply is under pressure. According to the World Wildlife Fund, less than 1% of the global water supply is fresh and accessible.
For investors who want to follow this trend, there’s a new pure-play opportunity—WaterBridge Infrastructure (WBI), a Houston-based company with assets in the Delaware Basin, announced the launch of its initial public offering. Starting today, Sept. 17, it is trading on the New York Stock Exchange under the ticker WBI. The IPO closes tomorrow, and the company plans to sell 27 million shares at $17 to $20, which would raise about $540 million.
The company is seeking an overall valuation of roughly $2.3 billion.
While Burry’s Scion Asset Management portfolio doesn’t specifically include commodities or any water stocks today, the idea that water could be a contrarian bet persists among some investors. So, is this a good time to trade WBI stock and buy the IPO?
As the IPO just opened today, investors should take a closer look at WaterBridge before deciding to dive in. The company has the nation’s biggest produced water infrastructure network, providing water management solutions to oil and natural gas exploration and production companies. WaterBridge does it all, handling the gathering, transporting, and recycling of water.
The company charges produced water handling fees for transporting water for disposal into its produced water handling facilities. It also provides raw or recycled produced water to customers for reuse in drilling and completion operations. The company says its revenue is tied to the long-life production of oil and natural gas wells…
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