Investor Michael Burry, famed for his role in "The Big Short," has announced significant shifts in his investment portfolio. He has sold his entire stake in GameStop and initiated a substantial short position against Palantir Technologies. Burry has also expanded his bearish bets on semiconductor stocks, the Nasdaq 100, and specifically Nvidia.
Key Takeaways
- Michael Burry has exited his GameStop position.
- He has opened an "outright short" on Palantir stock.
- Burry has increased his short positions against semiconductor ETFs and the Nasdaq 100.
- He has also purchased new put options on Nvidia.
GameStop Exit and "Instant Berkshire" Thesis
Burry revealed on his Substack that he has sold his complete holding in GameStop (GME). He explained that the company’s proposed acquisition of eBay did not align with his "Instant Berkshire" investment philosophy. This concept, which he outlined previously, involves creating a portfolio of strong companies that generate excess capital for further investment, mirroring Warren Buffett’s Berkshire Hathaway. Burry calculated that GameStop’s potential deal with eBay would result in a net-debt-to-profit ratio exceeding 5 times, which he considers unsustainable.
Shorting Palantir and Tech Stocks
In addition to exiting GameStop, Burry has taken a direct short position on Palantir Technologies (PLTR). He stated his belief that the company is overvalued, worth "low double digits at best," and expressed skepticism about its business model and leadership. This move comes as Palantir’s stock has seen substantial gains, driven partly by interest in AI. Burry also bolstered his existing short positions against the iShares Semiconductor ETF (SOXX) and the Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100. He specifically mentioned Nvidia (NVDA) as a "cheaper way to short the AI data center bubble" due to the prevailing positive sentiment on Wall Street.
Expanded Bearish Bets
Burry’s updated filings indicate that his short positions in SOXX, QQQ, Palantir, Nvidia, and Oracle collectively represent nearly 7% of his portfolio. Furthermore, his outright shorts on Palantir and Tesla account for an additional 2.5%. These actions signal a continued bearish outlook on several prominent technology and growth stocks, despite their recent strong performance.
Sources
- ‘Big Short’ Michael Burry Sells GameStop Stake, Shorts Palantir Stock, Business Insider.
- Palantir stock tumbles as Q1 revenue, profit beats fail to impress, Yahoo Finance UK.
