 |
Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] NEW YORK, November 5 (local time) — Shares of U.S. data analytics firm Palantir Technologies Inc. (NYSE: PLTR) fell as much as 10% during intraday trading on Tuesday after reports revealed that hedge fund manager Michael Burry, the real-life investor behind the film “The Big Short,” had taken a massive short position against the company.
As of 2 p.m. ET, Palantir shares were trading down about 7% at $192, after touching an intraday low of $185.56.
According to a recent regulatory filing, Burry’s hedge fund, Scion Asset Management, purchased put options equivalent to roughly 5 million shares of Palantir, with an estimated value of $912 million as of the end of the third quarter (September 30). Burry gained global fame for correctly predicting the subprime mortgage collapse during the 2008 financial crisis.
A put option is a derivative instrument that increases in value when the underlying asset declines, effectively representing a bet on a price drop. Burry reportedly took similar short positions against NVIDIA Corp. (NASDAQ: NVDA), another leading player in the artificial intelligence (AI) semiconductor sector.
In response, Alex Karp, Palantir’s Chief Executive Officer, dismissed Burry’s bearish view, telling CNBC that “shorting AI and the chip industry is ‘bat-s** crazy.’*” Karp added, “I’ll be happy to dance when that judgment turns out to be wrong.”
Despite the sharp sell-off, Palantir’s latest earnings report beat Wall Street expectations. The company raised its full-year revenue forecast from $4.15 billion to approximately $4.4 billion, above the consensus estimate of $4.17 billion.
For the third quarter, Palantir posted revenue of $1.18 billion, up 63% year-over-year, and net income of $476 million, exceeding market expectations of $435 million.
However, analysts noted that the company’s valuation remains stretched, leaving it vulnerable to volatility amid growing debate over whether the AI sector has entered bubble territory.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
