Michael Burry Claims Palantir's Long-Term Value is Below $1
Michael Burry stated that he has increased his holdings in put options for Palantir with a strike price of $100 expiring in March 2027.
He believes the company's long-term intrinsic value is below $1.
Reasons include the current valuation of approximately 69 times sales, a GAAP net profit of about $3 billion compared to the actual employee equity compensation value of around $5 billion, and off-balance-sheet infrastructure commitments that have more than tripled.
Burry reiterated his bearish stance on Palantir's business model and long-term competitive position.
Previously, he has hedged this stock multiple times with put options and has assessed its fundamental value to be far below $50.
Market mechanisms show that extreme bearish signals have triggered inflows into put options, while bulls are pressured by strong earnings and high valuations, intensifying the event-driven volatility in the long-short battle.
Related positions have been partially adjusted and then re-established.
Source: Public Information
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Michael Burry gained fame for accurately predicting the 2008 subprime mortgage crisis and has since continued to question the overvaluation of tech stocks based on fundamentals and accounting discrepancies, frequently establishing bearish positions on AI-related assets.
The capital path involves low-cost bets on valuation regression through long put options, motivated by capturing the correction of real profits versus book discrepancies caused by equity incentives and off-balance-sheet liabilities that the market overlooks.
Similar to his previous accounting skepticism cases against several tech companies, the current phase sees overvalued software stocks in the AI boom being targeted by contrarian funds.
This essentially represents a transfer of pricing power, shifting from narrative-driven growth premiums to a repricing based on accounting reality and long-term competitive barriers, with the mechanism being that extreme valuation multiples amplify any market impact from fundamental doubts.
ABAB News · Cognitive Laws
Book profits do not equal real cash flow
Extreme valuations fuel short sellers
Long-term value is determined by competitive barriers, not narratives