Key Takeaways
- Michael Burry revealed via Substack that he established a complete position in MercadoLibre (MELI) stock during last week’s dip into the $1,600 range.
- Shares of MELI plunged 12.7% last Friday after the company released quarterly earnings, though they rebounded slightly by 0.5% during Monday’s premarket session.
- Burry anticipates MELI will generate approximately $40 billion in revenue by 2026, marking a 30% jump from 2025 levels.
- The investor noted MercadoLibre’s unique compensation structure, which relies on cash-settled awards rather than traditional stock-based compensation.
- According to Burry, the stock trades significantly beneath his IV15 valuation, a metric where he forecasts 15% yearly returns spanning 15 years or longer.
On May 11, Michael Burry took to his Substack platform to announce the acquisition of a fresh, fully-sized stake in MercadoLibre (MELI), purchasing shares in the $1,600 range during last week’s sharp decline that saw the stock plummet 12.7% following its latest quarterly earnings announcement.
Shares ticked higher by 0.5% during Monday’s premarket hours. The e-commerce giant now hovers close to its 52-week bottom of $1,593.21, representing a roughly 33% decline from its peak over the trailing twelve months.
Burry’s timing aligns precisely with that yearly nadir — a characteristic entry strategy for the contrarian investor known for identifying undervalued opportunities.
In his Substack commentary, Burry highlighted MELI’s forecasted sales approaching $40 billion by 2026, signaling approximately 30% expansion compared to 2025 figures. This velocity of growth for an organization already operating at substantial scale captured the investor’s interest.
Burry also drew attention to a relatively overlooked detail: MercadoLibre eschews traditional stock-based compensation models. The Latin American platform instead compensates employees through cash-settled award mechanisms — a framework Burry considers advantageous when assessing sustainable value creation.
“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 Burry Sees
Burry highlighted that MELI leverages extensive cloud-based systems powered by Amazon Web Services. He clarified that the company doesn’t offer third-party cloud solutions to external customers — rather, it utilizes this technological foundation exclusively for its internal platform operations.
This nuance carries weight in Burry’s analysis. He’s not positioning MELI as a cloud infrastructure investment. Instead, he frames it as an efficiently managed enterprise equipped with the technological capability to sustain expansion throughout Latin America.
MercadoLibre maintains dominant market presence across Brazil, Argentina, and Mexico, with these three nations contributing over 95% of total revenues. The platform reported surpassing 120 million unique active buyers alongside 1 million active sellers by the conclusion of 2025.
The corporation commands a market capitalization hovering around $83.17 billion while trading at a price-to-earnings multiple of approximately 41.64x.
The Numbers Behind the Investment
Data from GuruFocus assigns MELI a GF Score of 82 out of 100. The platform achieves maximum marks of 10/10 for growth metrics and 8/10 for profitability indicators. Financial strength receives a rating of 6/10.
GuruFocus calculates a GF Value estimate of $3,420.67 for MELI — a level the platform characterizes as “significantly undervalued” when measured against current trading prices.
Insider activity records show one purchasing transaction over the previous three-month period, encompassing 57 shares.
Burry’s investment represents a completely new addition to his portfolio. Prior to last week, he held no disclosed position in MELI stock.
The stock concluded Friday’s session at a level matching that 52-week low territory, and Burry’s Substack disclosure verified the acquisition occurred during that identical period of market weakness.
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