‘Big Short’ investor Michael Burry confirms he’s sold GameStop and says he’s shorting Palantir
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Michael Burry said he sold GameStop shares and opened a “short position” in Palantir.
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He wrote on Substack that GameStop’s proposed eBay deal doesn’t fit the “Instant Berkshire” idea.
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The “Big Short” star also renewed his bets against microchip stocks, the Nasdaq 100 and Nvidia.
Michael Burry He says he’s giving up on GameStop and upping his bet against Palantir.
“I sold my entire GME position,” the investor of “The Big Short” fame wrote in a post. monday mail He added that this was his first full position on his substack since then. frozen from running a hedge fund to writing online late last year.
“No matter how I slice it, the Instant Berkshire thesis was never aligned with >5x Debt/EBITDA, nor was it ever aligned with interest coverage below 4.0x,” he wrote.
“Instant Berkshire“Burry’s idea, says GameStop CEO Ryan Cohen, is to emulate Warren Buffett’s Berkshire Hathaway to “create a portfolio of great companies that generate excess capital or float additional investment beyond what is necessary for their growth.”
In a post he wrote in late April, Burry wrote about GameStop, JD.com and Molina Health These were his three largest positions, and together they made up more than a third of his personal stock portfolio.
In a post late Monday, Burry explained with a chart why Cohen $56 billion cash and stock offering For eBay, this is a far cry from the deal it envisioned for GameStop.
guessed recommended purchase The combined business will have a net debt/profit ratio of 5.2 times, and annual profit will be only 2.5 times the annual interest expense.
Moreover, he predicted that if eBay backed down and demanded $65 billion, the business could result in 7.7x leverage and a 1.2 to 1.5x profit/interest ratio.
Burry said in a speech: previous post On Monday, a leverage of over 5 times was a “knife’s edge”, while 7.7 times was a “debt level at the distress level”.
Burry added to his short bets
In a post late Monday, Burry said he was “opening a short position” in Palantir ahead of its Monday earnings and “opening a short position on the company.” worth low double digits at best“
Burry said he’s not betting against Palantir simply because he believes it’s overvalued: “I’m closing the gap on the business model. I’m gapping the entire premise of the company. Short for CEO“
palantir Shares rose about 1% on Monday but traded slightly lower in pre-market trading on Tuesday. They have increased by nearly 800% since the beginning of 2024, bringing the company’s market value to $350 billion.
