Key Takeaways
- The Big Short investor Michael Burry revealed he established a complete position in MercadoLibre (MELI) stock around the $1,600 price level following last week’s post-earnings decline.
- Shares plunged 12.7% last Friday after the company’s earnings announcement, then climbed 0.5% during Monday’s premarket session.
- Burry anticipates MELI’s revenue to approach $40 billion by 2026, representing approximately 30% growth compared to 2025 figures.
- The investor noted MELI’s use of cash-settled compensation awards rather than traditional stock-based compensation.
- According to Burry, the current trading price sits “well below” his IV15 valuation, indicating expectations for 15% annual returns spanning 15 years or longer.
On May 11, Michael Burry announced through his Substack that he acquired a complete new stake in MercadoLibre (MELI) during the previous week, entering the position in the $1,600 range after shares collapsed 12.7% last Friday in response to the company’s earnings announcement.
During Monday’s premarket session, MELI shares gained 0.5%. The stock currently trades close to its 52-week bottom of $1,593.21 and has declined approximately 33% over the trailing twelve months.
Burry’s purchase timing aligned precisely with that 52-week floor — representing the type of opportunistic entry he’s known for executing.
In his Substack disclosure, Burry referenced MELI’s anticipated revenue approaching $40 billion in 2026, marking a 30% jump from 2025 levels. For a company operating at this magnitude, that expansion trajectory captured his interest.
He additionally highlighted a detail often overlooked by analysts: MercadoLibre avoids traditional stock-based compensation schemes. The company instead utilizes cash-settled awards for employees — a framework Burry considers advantageous when assessing long-term investment potential.
“MELI is now well below my IV15 price, at which I expect long-term 15% annualized returns at 15 years or more,” Burry wrote.
The Infrastructure Advantage That Caught Burry’s Eye
Burry observed that MELI leverages extensive cloud-based infrastructure powered by Amazon Web Services. He emphasized that the company doesn’t sell third-party cloud solutions — it exclusively utilizes this infrastructure for its own business operations.
This nuance holds significance for Burry. He’s not characterizing MELI as a cloud technology investment. He’s identifying it as an efficiently managed enterprise with the technological foundation necessary to sustain expansion throughout Latin America.
MercadoLibre maintains operations spanning Brazil, Argentina, and Mexico, which collectively generate over 95% of total revenue. The platform reported exceeding 120 million unique active purchasers and 1 million active merchants at the conclusion of 2025.
The enterprise carries a market capitalization near $83.17 billion and currently trades at a price-to-earnings multiple around 41.64x.
The Metrics Behind the Investment
Per GuruFocus data, MELI achieves a GF Score of 82 out of 100. The company earns a perfect 10/10 rating for growth metrics and 8/10 for profitability measures. Financial strength registers at 6/10.
The GF Value calculation estimates MELI at $3,420.67 — a threshold GuruFocus characterizes as “significantly undervalued” compared to current market pricing.
Insider activity shows one purchase transaction over the past three months, involving 57 shares.
Burry’s stake represents a fresh addition to his portfolio. As of the previous week, MELI did not appear among his publicly disclosed holdings.
Shares concluded Friday’s session at a price point matching that 52-week low territory, and Burry’s Substack announcement verified the acquisition occurred during that identical week of market weakness.
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