Michael Burry Disclosed $1.1 Billion Put Options Against Palantir and Nvidia Before Closing His Hedge Fund
Michael Burry, known for his successful short position in the subprime mortgage crisis, disclosed put options worth an estimated $1.1 billion against tech stocks Palantir (NASDAQ: PLTR) and Nvidia (NASDAQ: NVDA). These positions were part of his final trades before closing Scion Asset Management last year. The puts are deep out-of-the-money contracts with limited capital at risk but significant potential upside if the stock prices fall significantly. Burry's bearish stance on these AI-driven stocks is based on concerns about overvaluation and long-term sustainability, particularly for Palantir’s high price-to-earnings ratio and Nvidia’s customer concentration. He has maintained short positions in both companies while adjusting his portfolio to increase cash holdings and reduce risk. Despite the potential profitability of such a trade if it pays off, timing remains critical due to options' expiration dates. Burry's strategy mirrors his 2005 subprime mortgage bet, where he remained committed until the market corrected itself. He has since shifted some positions but continues to hold long-dated puts on Palantir and short stock in both companies.
Topics: hedge funds Michael Burry Nvidia Palantir put options