Key Takeaways
- Renowned investor Michael Burry revealed acquiring a complete position in MercadoLibre (MELI) during last week’s decline, purchasing shares in the $1,600 range.
- The Latin American e-commerce giant plummeted 12.7% following its quarterly earnings announcement on Friday, before gaining 0.5% during Monday’s premarket session.
- Burry anticipates MELI’s fiscal 2026 revenue will approach $40 billion, representing approximately 30% growth compared to 2025 figures.
- The investor emphasized MercadoLibre’s compensation structure, which employs cash-settled awards rather than traditional stock-based compensation.
- According to Burry, MELI currently trades “well below” his IV15 target, suggesting potential for 15% annualized gains over a 15-year-plus horizon.
On May 11, Michael Burry announced via his Substack that he established a new complete position in MercadoLibre (MELI) during the previous week, acquiring shares in the $1,600 price range following the stock’s sharp 12.7% Friday decline triggered by its earnings announcement.
During Monday’s premarket session, MELI gained 0.5%. The shares currently hover near their 52-week low of $1,593.21 and have declined approximately 33% over the trailing twelve-month period.
Burry’s purchase occurred precisely around that 52-week low threshold — a timing pattern characteristic of his investment approach.
In his Substack disclosure, Burry highlighted MELI’s anticipated revenue trajectory toward $40 billion for 2026, marking a 30% year-over-year increase from 2025 levels. This expansion velocity for an already large-scale enterprise particularly resonated with his investment thesis.
Burry also drew attention to a structural advantage often overlooked by market participants: MercadoLibre eschews traditional stock-based compensation schemes. The company instead employs cash-settled award mechanisms — an arrangement Burry considers advantageous when assessing sustainable long-term 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 Angle Behind Burry’s Thesis
Burry highlighted that MELI operates on extensive cloud-based infrastructure powered by Amazon Web Services. He emphasized the company doesn’t commercialize third-party cloud solutions — rather, it leverages this infrastructure exclusively for its proprietary platform operations.
This differentiation holds significance for Burry’s analysis. His investment thesis doesn’t position MELI as a cloud technology play. Instead, he views it as an efficiently managed operator equipped 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 2025’s conclusion.
The enterprise maintains a market capitalization near $83.17 billion and currently trades at a price-to-earnings multiple of approximately 41.64x.
Fundamental Metrics Analysis
Data from GuruFocus indicates MELI achieves a GF Score of 82 out of 100. The platform awards maximum marks on growth metrics (10/10) and strong profitability ratings (8/10). Financial strength registers at 6/10.
GuruFocus’s GF Value calculation establishes MELI’s fair value at $3,420.67 — a level the platform characterizes as “significantly undervalued” compared to prevailing market prices.
Insider activity records show one purchase transaction during the preceding three-month period, encompassing 57 shares.
Burry’s MELI stake represents a fresh addition. Prior to last week, his publicly disclosed holdings contained no MercadoLibre position.
Friday’s closing price aligned with the 52-week low territory, and Burry’s Substack disclosure confirmed his acquisition occurred during that identical week of market weakness.
