Palantir CEO Alex Karp sharply criticized Michael Burry, the real-life inspiration behind 'The Big Short,' for his substantial short positions against Palantir and NVIDIA, calling the move "completely insane" and questioning potential market manipulation. Burry's Scion fund holds over $1 billion in notional value of put options betting on a decline in AI-leading companies' stock prices. Despite Palantir's record-breaking Q3 performance and a year-to-date share price surge of over 157%, its forward price-to-earnings ratio of 228 times has raised concerns about a valuation bubble in AI-related stocks.
Palantir CEO Alex Karp publicly criticized Michael Burry, the investor who inspired 'The Big Short,' for shorting his company and NVIDIA, calling it "completely insane" to oppose leaders in the AI field.
Previously, about 80% of the Scion Fund managed by Michael Burry was concentrated in short positions on NVIDIA and Palantir, with a nominal value exceeding USD 1 billion.
Burry hinted at market concerns last week on social media, posting, "Sometimes we see bubbles, sometimes we can take action, and sometimes the only winning move is not to play." He gained fame for successfully shorting mortgage-backed securities before the 2008 financial crisis, a trade that was adapted into the Oscar-winning film 'The Big Short.' Burry himself declined to comment on Karp's remarks.
Executives Point to Market Manipulation
Karp was scathing in his criticism of short sellers, stating: "It is already very strange that he chose to short two companies with such strong performance. Attempting to short chips and ontology (referring to core AI areas) is simply insane."
He believes that Burry is essentially "shorting AI" and criticized the entire act of short selling. Karp suggested market manipulation is occurring: "Short selling is highly complex. Frankly, I think there is market manipulation going on here. We have delivered the best results in our history. I even suspect whether he is using public opinion to cover his exit. These individuals claim to be ethical but are shorting the world’s most innovative companies, which is extremely hypocritical."
Karp also said: "It’s not even clear if he is actually shorting us. It might just be, 'How do I exit my position without looking like a fool?' I do think this behavior is reprehensible, and I will cheer when it is proven wrong."
Despite Palantir’s strong third-quarter earnings report, its stock price still fell, reflecting growing investor concerns over valuations of AI-related stocks. The company’s forward price-to-earnings ratio stands at 228 times, significantly higher than the market average. As of press time, Palantir’s share price was USD 191.14, having risen 152% year-to-date.
Regulatory filings show that as of September 30, Burry’s put options had a nominal value of USD 912 million for Palantir and USD 187 million for NVIDIA. However, the documents did not specify exact strike prices or expiration dates.
It is currently unclear whether Burry profited from Tuesday's stock price decline. The document reflects the portfolio holdings as of the end of September, and he may have adjusted his portfolio since then. Burry declined to comment on his current holdings.
Editor/Joryn
