Investor Michael Burry sought to clarify certain misconceptions about his latest options bet against Palantir Technologies Inc. (NASDAQ:PLTR), after details of the position were widely misinterpreted in media reports.
Burry Unveils True Size of His Position
On Thursday, in a post on X, “The Big Short” investor spelled out the math behind his latest bet, after several media outlets appeared to overstate his total exposure.
“So, I bought 50,000 of these things for $1.84,” he said, referring to 50,000 put option contracts on Palantir, with each contract having 100 shares, which are set to expire in 2027 with a strike price of $50. They cost him $9.2 million in total, and not $912 million, as was reported last week.
See Also: Burry’s Big Short 2.0: From Palantir Hype To Big Tech’s ‘Frauds Of The Modern Era’
“I spent $9,200,000, not $912,000,000,” he said, while tagging media outlets such as CNBC, the Wall Street Journal and the Financial Times.
In essence, the position gives Burry short exposure equivalent to roughly 5 million shares of Palantir, with the contracts giving him the right to sell those shares at $50 in 2027. This setup shows that he expects a steep decline of more than 70% in the stock over the next year, in order to turn a profit.
Burry also highlighted that the trade was made last month, and concluded by saying, “on to much better things Nov 25th,” hinting at the launch of something new later this month.
Burry Shuts Down His Hedge Fund
Burry, who rose to fame following his bold bet against the housing market in the lead up to the 2008 financial crisis, has filed papers to de-register his hedge fund, Scion Asset Management, LLC., this week.
In his letter to investors, he wrote, “With a heavy heart, I will liquidate the funds and return capital… by year's end.” He said the move follows a long stretch in which the market simply hasn't aligned with his assessments of value, a disconnect he suggested has been building for some time.
In addition to Palantir, Burry is also short on NVIDIA Corp. (NASDAQ:NVDA), with 1 million put options, as a bet against the AI bubble.
Palantir shares were down 6.53% on Thursday, closing at $172.14, and are down 0.82% overnight. The stock scores high on Momentum and Growth in Benzinga’s Edge Stock Rankings, with a favorable price trend in the short, medium and long terms. Click here for deeper insights into the stock, its peers and competitors.
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