this big short Electric car maker predicts housing market crash in 2008, investors say Tesla is “ridiculously overvalued” and warns Musk’s $1 trillion compensation plan will only make the situation worse.
Michael Burry, who delisted hedge fund Scion Asset Management last month, revealed a bet on Elon Musk’s Tesla on a newly launched Substack account.
“Tesla’s market cap is now ridiculously overvalued, and has been for a long time,” he wrote in an article. postal.
Burry said Tesla is diluting its shareholder equity by an estimated 3.6% annually because it provides stock-based compensation to employees without offsetting the impact through buybacks. He added that CEO Musk’s huge pay package would make matters worse.
The 2025 compensation plan, which shareholders overwhelmingly approved last month, could give Musk at least tens of millions of additional Tesla shares, which could further dilute existing shareholders’ holdings. At the high end, Musk will receive hundreds of millions of shares as long as he meets strict targets, which would increase his stake in Tesla to 29% from the current 15%.
However, Musk could reportedly benefit more than the shareholders who backed him by achieving two of the more achievable goals needed to free up compensation. wealthSean Tully.
The company’s shares, trading around $426 on Monday, fell less than 1% after Burry’s blog post, but are still up more than 6% year to date as they rebounded from a sharp sell-off earlier this year.
In addition to being overvalued, Burry criticized the company’s superfans, saying Tesla’s priorities are a moving target.
“By the way, the Elon wannabes were all in on electric cars until the competition came along, then all on self-driving before the competition came along, and now all on robotics until the competition came along,” the legendary investor said.
Tesla did not immediately respond wealthRequest for comment.
Burry shorts Tesla after shorting tech giant NVIDIA He also recently revealed Palantir.
this big short The investor had previously shorted Tesla in 2021, when his hedge fund shorted about $530 million worth of Tesla stock before exiting the trade months later. At the time, Bury told CNBC It’s “just a deal.” It’s unclear how his first bet against Tesla succeeded, but based on Tesla’s share price movement from Scion’s disclosure of the short position to Burry’s announcement of closing the position, the company may have suffered losses.
Still, Bury’s stance isn’t shared by Wall Street. Despite his pessimistic predictions, Three-quarters of analysts A buy or hold rating on Tesla. After Tesla shareholders approved Musk’s compensation package last month, Tesla bull Dan Ives and his Wedbush Securities team reiterated their support for the CEO and his vision for the company.
Musk has not been kind to Tesla short sellers in the past. Around 2022, after discovering that Bill Gates was shorting Tesla stock, he “Super mean” arrive Microsoft co-founder, he later said in an interview.
It’s unclear whether Gates has closed the deal, but Musk hasn’t forgotten.
“If Gates hasn’t completely closed out his insane short position on Tesla that he’s held for nearly eight years, he better do it as soon as possible,” he wrote in a post. X last month.