I covered Michael Burry's first Palantir short thesis on June 4, when he called the stock a "sand castle" trading at 16 times intrinsic value. The stock dropped sharply the following day. Then Palantir reported one of the most extraordinary quarters in enterprise software history.
On top of that, Palantir surged 64% from its June low of $106 to the current $175, and the bears — including Burry — faced intense pressure. On Monday, August 10, Burry responded by doubling down. Writing in his Cassandra Unchained report, Burry disclosed that he purchased March 2027 Palantir put options struck in the low-to-mid $100 range, taking advantage of implied volatility falling to multi-month lows to rebuild his bearish position at cheaper option prices.
His long-term verdict on the stock was stark: under $1. Yes, you read it right, it's not a typo. Palantir (PLTR) trades near $175.52 at a market cap of approximately $420 billion, according to Yahoo Finance.
The company has a trailing price-to-sales ratio of 73.19 and a forward P/E of 112.36. Burry is betting against those numbers. Palantir is betting investors should ignore them.
Burry's bear case has evolved beyond valuation multiples. He now points to two specific accounting issues he says the market is not pricing correctly. First, stock-based compensation.
Burry noted that Palantir issued 31.3 million shares to staff, worth approximately $5 billion over the past year, representing roughly six times the company's reported stock-based compensation expense. Palantir CEO admits AI would make him 20 times richer Microsoft CEO adds fuel to Palantir CEO's AI warning Palantir CEO has a blunt verdict on OpenAI and Anthropic He described this as the widest accounting gap among 66 companies he recently reviewed. The implication is that Palantir's reported earnings metrics look stronger than they would if total shareholder dilution were fully reflected.
Extract — continue reading at the source.
