'Big Short' investor Michael Burry fires back after Alex Karp blasted his bet against Palantir

Michael Burry's Scion Asset Management disclosed significant bearish put options against Palantir ($912M notional) and Nvidia ($187M notional) in a late September 13F filing, sparking a public dispute with Palantir CEO Alex Karp, who dismissed Burry's bets as 'batshit crazy' given Palantir's robust financial performance and substantial year-to-date stock appreciation. Burry retorted by questioning Karp's understanding of financial disclosures. While Palantir's stock initially dropped 15% following the revelation, Burry's subsequent social media activity suggests he may have already closed his Palantir short position, underscoring the snapshot nature of 13F filings and his broader cautious view on the AI market.

Analysis

Michael Burry's Scion Asset Management disclosed significant bearish put options against Palantir (PLTR) and Nvidia (NVDA) in its late September 13F filing, with notional values of $912 million and $187 million respectively. This revelation, coinciding with Palantir's Q3 earnings, contributed to a 15% stock decline for PLTR over three days, from $207 to $175. Such high-profile investor disclosures can significantly influence market sentiment and price action, particularly for high-growth, high-valuation stocks.

Palantir CEO Alex Karp strongly refuted Burry's bearish stance, highlighting the company's robust financial performance. Palantir reported a 63% year-over-year revenue increase to $1.2 billion and a more than threefold increase in net income to $477 million last quarter, projecting 54% full-year revenue growth to $4.4 billion. The stock has surged approximately 28-fold since January 2023, reaching a $422 billion market capitalization, reflecting strong investor confidence.

Burry's subsequent social media activity suggests he may have already closed his Palantir short position, emphasizing that 13F filings provide only a backward-looking snapshot and do not reflect real-time portfolio adjustments. This highlights the limitations of 13F data for current investment decisions. Burry has also signaled a broader concern regarding the AI boom, likening it to the dot-com bubble and suggesting caution in the sector.

Key Decisions for Investors

• Investors should recognize that 13F filings are backward-looking snapshots and may not reflect current portfolio positions, especially for short bets
• Investors should evaluate Palantir's strong fundamental growth and guidance against its significant year-to-date stock appreciation and high market capitalization to assess potential valuation risks
• Monitor broader market sentiment and high-profile investor commentary regarding the AI sector, as exemplified by Burry's bubble warnings, for potential shifts in investor appetite