Tesla’s astronomical price increase over the past year appears to have caught the attention of The Big Short’s Michael Burry.
Burry, who has an impressive track record as an investor — not to mention his rise to fame after he bet against the US housing market in what turned out to be the subprime mortgage crisis in 2007 — has his latest sights set on Tesla. Although Burry falls into the category of investors who lost a combined $38 billion last year, MarketWatch reveals that his Tesla short is getting “bigger and better,” after the investor announced that he was shorting Tesla last December.
According to Burry, Tesla’s stock has risen to “ridiculous” levels, with the EV maker’s valuation being absurd compared to the rest of the auto industry. Burry began Tweeting about Tesla shortly before the automaker’s highly anticipated battery day, which, by the way, turned out to be a lot less prodigious than initially expected. In one of his Tweets, Burry brought attention to Tesla’s valuation relative to its rivals, noting that the EV maker has been trading for 18x sales (which as of January 11, 2021 has increased to 29x sales), meanwhile the remainder of the world’s auto industry has been trading at approximately 0.35x sales.
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Burry followed up his Tweet with several charts from the Financial Times, which suggest that Tesla’s profitability would not have been possible without the sale of its regulatory credits. In addition, he also directed attention to the EV automaker’s flat revenues and its “inferior lithium iron phosphate tech,” followed by the hashtag #bubbles.
Information for this briefing was found via MarketWatch, Financial Times, and Twitter. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
5 Responses
I’d love to short it but there are so many dummies that just buy on hype that it isn’t worth the risk.
Did he say anything about Tesla’s energy company, the roofing company or the charging network? Or that Tesla employees pay and benefits were set during a very lean time and are now embarrassingly low compared to less productive legacy company employees? Or any of the reasons Tesla is outperforming know it all legacy companies?
Just another Elon Musk fanboy who prefers to ignore the creative accounting practices of a company that doesn’t produce profit, counts forward sales, green credits not yet due and subsidies that no longer exist on its balance sheet. Ever heard of Enron?
His Tesla Short is Getting ‘Bigger and Worst’
*worse. Not worst. Love to see someone critique a genius but can’t type.