Palantir’s $73bn meltdown hands shorts rare $1.6bn payday

Key topics.Stock drops 17% in longest losing streak since April 2024Short sellers gain $1.6bn but remain $4.5bn down in 2025Tech selloff drags high-beta Palantir despite 106% YTD gain.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Carmen Reinicke.Palantir Technologies Inc.’s six-session stock-market losing streak has wiped out $73 billion in market value, handing a rare win to short sellers who are getting pounded after betting against this year’s Wall Street juggernaut. Since hitting a record on Aug. 12, shares of the data analysis and software firm are down more than 17%. It’s their longest losing streak since April 2024, putting the stock on track for its worst week since the tariff tantrum in early April of this year.The drop has given short sellers more than $1.6 billion in profits, according to data from S3 Partners LLC. But that barely dents the $4.5 billion in paper losses traders have put up betting against Palantir this year, S3 data shows. While the stock is the worst performer in the S&P 500 Index over the past six sessions, it remains the benchmark’s biggest gainer for 2025 after soaring 106%. .That climb has pushed Palantir shares to a nosebleed valuation. Yet, contrarian traders have largely bailed on their bets against the stock over the past year because the momentum appears to be unceasing. Short interest as a percentage of Palantir’s float, a measure of how many shares are available to borrow and bet against, has fallen to about 2.5% from nearly 5% a year ago. This suggests that short sellers covered their positions as the stock rose, according to Matthew Unterman, managing director of S3 Partners LLC. “They either wanted to avoid being run over by a monster momentum trade or were forced out after the freight train hit,” said Steve Sosnick, chief strategist at Interactive Brokers LLC. The recent decline in Palantir’s stock price is part of a wider drop in mega-cap technology companies that’s weighing on the S&P 500 and Nasdaq 100 indexes, as investors take some profits off the table and rotate into less expensive parts of the market. “The selloff that we’re seeing in Palantir, it’s long overdue and it’s not because the short sellers have taken over,” Vikram Rai, portfolio manager and macro trader at Fny Capital Management LP. “When you have the likes of Google, Meta and Microsoft declining, then obviously the high-beta stocks, which are hopelessly overvalued, will decline more.”Long-oriented investors have driven most of the upside in Palantir shares this year, as opposed to a short squeeze, where traders betting against a stock rush to buy it and get out of their trades before it goes any higher. That said, signs are emerging that short sellers are gradually starting to ramp up bets against Palantir as the stock shows some weakness. Since the beginning of June, short interest has increased by about 10 million shares, according to S3 data. The Denver-based company has roughly 2.3 billion shares outstanding.And even if the stock snaps its losing streak sometime soon, Wall Street pros say contrarian trading in Palantir could keep ticking higher along with the share price. “If Palantir rallies even a bit, you will see the short seller is coming” back, Rai said, adding that he’d be cautious about stepping into a short position. “The stock has shown its hand, for lack of a better term, that there is a downward trend.” .© 2025 Bloomberg L.P.

Palantir’s $73bn meltdown hands shorts rare $1.6bn payday

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