'Big Short' Michael Burry Sells GameStop Stake, Shorts Palantir Stock

Key Points:

• Michael Burry has sold his entire GameStop (GME) position, citing concerns over the company's high debt and interest coverage ratios, which conflict with his "Instant Berkshire" investment thesis inspired by Warren Buffett's Berkshire Hathaway model.
• Burry criticized GameStop CEO Ryan Cohen's proposed $56 billion acquisition of eBay, projecting that the deal would create unsustainable leverage levels, potentially reaching 7.7 times net debt to EBITDA and dangerously low profit-to-interest coverage ratios.
• The investor has increased his bearish bets by opening a short position on Palantir, challenging both the company's valuation and its business model, while also purchasing put options on semiconductor stocks (SOXX), the Nasdaq 100 (QQQ), Nvidia, and Oracle due to concerns about overvaluation and a potential market correction.
• Burry's bearish positions on SOXX, QQQ, Palantir, Nvidia, and Oracle constitute nearly 7% of his portfolio, with additional outright shorts on Palantir and Tesla making up 2.5%, signaling a significant shift toward shorting overvalued tech and growth stocks.
• Despite Palantir's stock having surged roughly 800% in 2024 to a $350 billion market cap, Burry remains skeptical and anticipates a sharp decline in these stocks by next spring, as indicated by the strike prices and expiration dates of his newly purchased put options.