"This stock is at $175 but is worth one dollar": The legendary investor goes on the offensive
Just as all of Wall Street celebrates the renewed surge of Palantir, the investor who predicted the 2008 crisis has quietly renewed his bet against the stock, setting an imaginary price target. Behind the provocative statement hides an accounting claim worth knowing, especially if the stock is also in your training fund.
After a week in which Palantir (PLTR) stock jumped by about 40% following a record-breaking report, and everyone who bet against it was forced to absorb painful losses, one of the most famous investors in the world chose to do exactly the opposite.
Michael Burry, who became famous thanks to his winning bet against the US housing market on the eve of the 2008 crisis, renewed his bearish position against the company. According to him, the stock, which currently trades around $175 and reflects a value of about $421 billion, is worth less than one dollar in the long term.
In a report he published, Burry revealed that he purchased put options on Palantir expiring in March 2027, with strike prices in the $100 area. He partially closed his previous position around $107, and now took advantage of a decrease in volatility that lowered the prices of the options to return to the game. The point that bothers him: Palantir is trading again at a multiple of about 69 on revenue — a rare valuation even by AI bubble standards.
Beyond the extreme headline, Burry points a spotlight at two accounting points:
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In the past year, Palantir issued about 31.3 million shares to its employees, worth about $5 billion — about six times the stock-based compensation expense it actually reports. According to him, this is the widest accounting gap among 66 companies he examined, and it means significant dilution of shareholders in the future.
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Non-cancellable infrastructure purchase obligations, which do not appear on the balance sheet, more than tripled this year.
The combination of these factors is what led him to the conclusion that the real value of the stock is lower than a dollar.
On one hand, Burry has identified bubbles in the past that others missed. On the other hand, he is also known as someone who is ahead of his time and sometimes wrong — some of his pessimistic forecasts in recent years simply did not materialize, or materialized too late to profit from them. Even the target of "less than a dollar" sounds more like a statement intended to attract attention than an accurate forecast. At the same time, Burry is also betting against other AI stocks like Oracle, and claims that in the current market "price no longer matters" — evidence that his criticism is broad and not unique to Palantir.
Small investors, for their part, were not impressed. The sentiment on social networks remains bullish and many reject Burry's bet outright. At the same time, he actually increased a long position in the animal health company Zoetis (ZTS), which he sees as a value opportunity after a prolonged drop — a reminder that his approach is classic: buying what everyone hates and selling what everyone loves.
And what does all this mean for the Israeli saver? Palantir is included in the S&P 500 index, so even those who do not hold it directly are exposed to it through stock tracks and index trackers in pensions, training funds, and provident funds. The debate between the famous bear and the optimistic crowd illustrates how steep the fall could be if the party stops. When a stock is priced for perfection, even a small mistake is priced dearly.
