Michael Burry fires back at Palantir CEO in wild short-seller feud

According to Business Insider, Michael Burry’s Scion Asset Management disclosed put options on 5 million Palantir shares with a notional value of $912 million at the end of September. The revelation came the same day as Palantir’s third-quarter earnings, contributing to the stock falling 15% over the next three days from a record $207 to $175. Palantir CEO Alex Karp then blasted Burry’s bet as “batshit crazy” during a CNBC interview last Tuesday, suggesting shorting companies “making all the money” was irrational. Burry fired back Sunday night on X, criticizing Karp’s understanding of 13F filings and arguing his “ontology” couldn’t handle basic financial disclosures. Palantir’s revenue actually surged 63% year-over-year to $1.2 billion last quarter while net income more than tripled to $477 million.

Wall Street theater at its finest

Here’s the thing about these billionaire feuds – they’re equal parts substance and spectacle. Burry’s playing the intellectual card, throwing around terms like “ontology” and “epistemological model” to basically say Karp doesn’t know how to read a financial filing. Meanwhile, Karp’s going for the emotional appeal, talking about how short sellers “trigger” him while his company does “noble work” for retail investors and military personnel.

And let’s be real – both of them know exactly what they’re doing. Burry’s cryptic X posts suggest he might have already closed the position, which makes this whole exchange feel like performance art. His “I am not 5’6” tweet the day after the filing dropped? That’s Wall Street code for “I’m not short anymore, folks.” But the damage was already done – that 15% stock drop right after his position became public is exactly what Karp accused him of trying to engineer.

The AI bubble question

Burry’s been pretty clear about where he stands on the AI boom – he thinks it’s a bubble. His return to X after a two-year hiatus came with warnings about the dot-com parallels and infrastructure gluts. But here’s what’s fascinating: he’s betting against two companies that are absolutely crushing it financially. Palantir’s revenue growth is insane, and Nvidia? Well, they’re printing money.

So what gives? Is Burry just early, or is he missing something fundamental about this AI revolution? The man made billions betting against the housing market when everyone thought he was crazy. But timing is everything in short selling, and being right too early is the same as being wrong. Palantir’s stock has surged 28-fold since early 2023 – that’s the kind of move that can bankrupt short sellers even if they’re ultimately correct.

The 13F limitations

This whole drama highlights how misleading 13F filings can be. They’re just quarterly snapshots that come out six weeks late. Burry could have opened and closed that Palantir position multiple times since September 30th, and we wouldn’t know until February. The notional value of $912 million sounds terrifying, but it doesn’t tell us about his actual risk or timing.

And think about this – while everyone’s focused on his Palantir and Nvidia puts, we have no idea what else Burry’s doing. The filing excludes short sales, private investments, foreign stocks, bonds, and real estate. For all we know, he could be making money hand over fist elsewhere while these headline-grabbing shorts get all the attention.

What’s next

Burry’s teasing some big reveal for November 25th in his X bio, which suggests this story has legs. Will he explain his AI bubble thesis in detail? Maybe he’ll reveal he was never actually short to begin with. The man loves his cryptic messages and dramatic timing.

Meanwhile, Palantir keeps executing. Their financials are undeniably strong, and they’re projecting $4.4 billion in revenue this year. But at a $422 billion market cap, they’re now more valuable than established giants like Bank of America. That kind of valuation leaves very little room for error.

This feud is really a proxy war about the entire AI investment thesis. Are we in a sustainable revolution or another tech bubble? Burry and Karp represent two extremes, and where you stand probably says more about your investing philosophy than anything else. One thing’s for sure – it’s going to be entertaining to watch this play out.