Key Takeaways
- Michael Burry revealed through his Substack that he established a complete position in MercadoLibre (MELI) around the $1,600 price range during the previous week’s market decline.
- Shares dropped 12.7% on Friday after the company released quarterly results, followed by a 0.5% premarket gain on Monday.
- Burry anticipates the company’s 2026 revenue will approach $40 billion, representing approximately 30% growth compared to 2025 figures.
- The investor noted MELI’s approach of utilizing cash-settled employee awards rather than traditional equity-based compensation.
- According to Burry, the current trading price sits considerably below his IV15 valuation, where he anticipates generating 15% yearly returns across a 15-year-plus timeframe.
On May 11, Michael Burry announced via his Substack platform that he had initiated a complete new stake in MercadoLibre (MELI) during the prior week, establishing his position in the $1,600 range following Friday’s 12.7% decline triggered by the company’s earnings announcement.
Shares showed a modest 0.5% increase during Monday’s premarket session. The equity currently trades close to its 52-week trough of $1,593.21 and has declined approximately 33% throughout the trailing twelve months.
Burry’s acquisition timing aligned closely with that annual low point — a scenario that typically matches his investment approach.
Within his announcement, Burry referenced MELI’s estimated revenue approaching $40 billion for 2026, marking a 30% expansion above 2025 levels. The sustained growth velocity at this company size captured his interest.
He drew attention to a less frequently highlighted detail: MercadoLibre avoids traditional stock-based compensation. The organization operates a cash-settled employee award framework — an arrangement Burry considers beneficial when assessing enduring value propositions.
“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 Rationale Behind Burry’s Interest
Burry highlighted that MELI operates through extensive cloud-based infrastructure supported by Amazon Web Services. He emphasized the company does not offer third-party cloud solutions — the infrastructure exclusively powers its internal operations.
This separation holds significance for Burry. His thesis centers on MELI as a competently managed enterprise equipped with the technical foundation to sustain expansion throughout Latin America.
MercadoLibre maintains operations spanning Brazil, Argentina, and Mexico, with these three markets contributing over 95% of total revenue. The platform reported exceeding 120 million unique active buyers alongside 1 million active sellers at 2025’s conclusion.
The enterprise commands a market capitalization near $83.17 billion while trading at a price-to-earnings multiple around 41.64x.
Analytical Metrics and Valuation Indicators
GuruFocus data shows MELI achieving a GF Score of 82 out of 100. Growth metrics earn a perfect 10/10 rating while profitability receives 8/10. The financial strength category registers at 6/10.
GuruFocus places the GF Value estimate at $3,420.67 — a threshold the platform characterizes as “significantly undervalued” compared to present trading levels.
Insider activity over the recent three-month period included one purchase transaction involving 57 units.
Burry’s holding represents a fresh addition. Prior to last week, MELI appeared nowhere in his publicly disclosed portfolio.
Friday’s closing price matched the 52-week low territory, with Burry’s Substack disclosure verifying the purchase occurred during that identical week of downward pressure.
