Michael Burry is an investing legend most known for his role in the “Big Short” where he predicted the Housing Bubble & Sub Prime mortgage crisis of 2007. He executed a “Big Short” position against the US housing market, that paid off massively when the fundamentals of the housing market corrected. 

michael-burry-the-big-short

michael-burry-the-big-short Movie played by Christian Bale.

What is the NEXT Big Short?

Michael Burry has revealed a Major $530 Million bet against Tesla Stock! 

Burry has purchased Long Puts against 800,100 shares of Tesla which are worth approximately $534 million!

This was reported in a recent filing with the US Securities & Exchanges Commission via his private wealth fund, Scion Asset Management. 

Burry VS Musk?

Tesla Stock has surged more than 20,000% since going public in 2021. 

Driven by Tesla Business improvements, Electric Vehicle Demand & the great leadership (& showmanship) of Elon Musk. 

Just in 2020, Tesla’s share rose astronomically up over 700% , this created many happy Tesla Investors (Including myself) & even multiple “Teslanaires”. 

Tesla stock analysis valuation Big Short Michael Burry Trades

Big Short Michael Burry Shorts Tesla stock. Source: Motivation 2 invest Youtube

Many Wall Street analysts were left flat footed when the momentum hit Tesla stock.   

Short sellers lost $38 billion over the course of Tesla’s historic 2020 rally.  Tesla Famously Created some “Tesla Shorts” to provoke fun at the Short sellers (they sold out immediately!). 

tesla shorts sell out

tesla short sellers sell out. Source: NY POST

Did Michael Burry Make Money on Tesla?

Well it is difficult to know the exact Strike Price & Expiry date of Michael Burry’s put options, we do have other information derived from Trade Data & series of Tweets by Michael Burry at Elon Musk.

Hypothesis: If Burry Initiated a Short Position on Tesla before September 2020 after initiating a series of tweets slamming Tesla’s stock valuation. 

Then from September 2020 to February 5th 2020 , Tesla Stock increased by 100% (mainly driven by momentum). 

tesla stock price increase investors

tesla stock price increase investors

Thus during this period, Michael Burry may have “lost money” as he would have had to cover his short by closing positions or buying Tesla stock to offset the run up. (Creating a Short Squeeze).

However, from February 5th to May 22nd 2021 (Tesla stock Plummeted by over 30%) thus this would have resulted in a likely profit for Burry (Or lessened his losses). 

Tesla stock has since rebounded by 19%. Thus if Michael Burry has an expiry date for his options way into the future. then he should be ok, if not he would be losing money (on paper at least) right now

Which Investors have shares of Tesla?

Current Guru Investors into Tesla Stock, have the following holding values above

Cathie Wood: $4.3 Billion, Ken Griffin: $162 Million, Jim Simons $161 Million, Ray Dalio $20 Million. For full details see Tesla Stock

Did Michael Burry Delete his Tweets?

Yes! Michael Burry made a series of Tweets slamming Tesla stock before deleting them

Michael Burry’s Deleted Tweets reveal a clue…

On September 22nd 2020:

Burry sent a Tweet @ElonMusk slamming the Valuation of Tesla stock. 

Tweet 1. Michael Burry to Elon Musk about Tesla stock.

#Tesla #BatteryDay Edition @elonmusk

Bloomberg data: Global Autos ex-TSLA

  •  $2.3Trillion sales
  • $100Billion EBIT,
  •  $807Billion MarketCap. 
  • $TSLA $25Billion sales, no EBIT, 
  • $438Billion MarketCap. 

TSLA Reg Credit revenues a #meltingicecube.

 Global [email protected] sales,TSLA @18X.

 #bubbles pic.twitter.com/YoM8z4H4lb

— Michael Burry, M.D. (@michaeljburry) September 22, 2020

Tweet 2. Michael Burry to Elon Musk about Tesla stock

Michael Burry also highlighted Tesla’s flat revenues and Tesla’s “inferior lithium iron phosphate tech” while appending the Tweet with the hashtag #bubbles.

$TSLA: @FT #BigRead – sales of green regulatory credits necessary for “profitability.” Flat revs as tax credits wane/ deliveries stagnate. Inferior lithium iron phosphate tech behind #millionmilebattery means lower energy density/reduced range. #bubbles https://t.co/Z5XlzzEsJj pic.twitter.com/8wH1o6PJrM

— Michael Burry, M.D. (@michaeljburry) September 22, 2020

Tweet 3. Tesla Short Position confirmed by Michael burry

“@elonmusk, yes, I’m short $TSLA, but some free advice for a good guy….Seriously, issue 25-50% of your shares at the current ridiculous price. That’s not dilution. You’d be cementing permanence and untold optionality. If there are buyers, sell that #TeslaSouffle,”   Source: The Observer

Tesla Stock Crushed like a Soufflé?

The “souffle” mention was a reference to the warning Musk gave to Tesla employees quote: “Tesla’s stock price will immediately get crushed like a soufflé under a sledgehammer” if Tesla doesn’t reach the profitability Wall Street has already priced into the stock.

Which Stocks has Michael Burry Being buying? 

To find out, dive into his Latest Trades & Stock portfolio here: Michael Burry Stock Portfolio

Has Michael Burry shorted Bitcoin?

Find out by watching the video below, or you can read our post. Has Michael Burry Shorted Bitcoin? 3 Ways to short sell crypto?

 

 

 

 

 

 

YOUTUBE

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