Palantir CEO Slams Investor Burry Over $1.1 Billion Bet Against Company

Palantir Technologies CEO Alex Karp has publicly criticized renowned investor Michael Burry for his significant short positions against both Palantir and Nvidia, which total approximately $1.1 billion. Karp described Burry’s actions as “bats–t crazy,” highlighting the paradox that both companies have experienced substantial stock growth over the past year.

During an appearance on CNBC’s “Squawk Box” on October 3, 2023, Karp stated, “The two companies he’s shorting are the ones making all the money, which is super weird.” He emphasized that Burry’s strategy appears misguided, especially as these firms have been at the forefront of the ongoing artificial intelligence (AI) boom. “The idea that chips and ontology is what you want to short is bats–t crazy,” he remarked.

According to a regulatory filing from Scion Asset Management, Burry’s firm holds put options on 5 million shares of Palantir, valued at around $912 million, and another 1 million shares of Nvidia, worth approximately $187 million as of September 30, 2023. Put options are financial contracts that increase in value when the underlying stock price declines.

Karp accused Burry, who gained fame for predicting the 2008 financial crisis as depicted in the film “The Big Short,” of engaging in market manipulation. He stated, “With the shorts it’s very complex … honestly I think what’s going on here is market manipulation.” Karp continued, asserting that Palantir has delivered outstanding results and questioned Burry’s motivations, suggesting that he might be attempting to extricate himself from a precarious position.

Burry has refrained from commenting directly on Karp’s remarks. However, he recently expressed concerns about market conditions, suggesting in a post on X that, “Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play.”

Karp, who has become increasingly vocal in defending Palantir, ridiculed Burry’s skepticism regarding the AI sector. He stated, “These people, they claim to be ethical, but they are actually shorting one of the great businesses of the world.”

Despite Palantir announcing better-than-expected quarterly results, the company’s shares fell by approximately 9% on the same day, reflecting broader market trends that saw both Palantir and Nvidia’s stocks drop amid concerns about inflated valuations. Nvidia’s stock has surged over 50% this year, while Palantir’s shares have skyrocketed over 170% during the same period.

Analysts have suggested that the rapid rise in stock prices for both companies may be unsustainable. For instance, data from FactSet indicates that Palantir’s stock was trading at more than 300 times projected earnings for 2025 as of early October 2023.

In addition to the short positions on Palantir and Nvidia, Burry’s firm has disclosed bullish investments in Pfizer and Halliburton, amounting to a combined $214 million. Nonetheless, approximately 80% of Scion’s portfolio is heavily weighted towards the short positions against Palantir and Nvidia, illustrating a strong conviction in this strategy.

Karp has previously criticized short sellers, and he remains resolute in his belief that Palantir will prove successful in the long run. “I’m going to be dancing around when it’s proven wrong,” he declared. He also suggested that Burry’s actions might reflect a desire to conceal his own miscalculations, saying, “It’s probably just, ‘How do I get my position out and not look like a fool?’”

As the debate between Karp and Burry unfolds, the implications for both companies and the wider market continue to be closely monitored by investors and analysts alike.