Michael Burry Has a New Short Target: “Ridiculously Overvalued” Tesla

Michael Burry, the billionaire capitalist immortalized successful The Big Short for predicting the 2008 lodging crash, has stirred the markets again. Just months ago, helium made headlines by betting against the AI frenzy, snapping up enactment options connected Nvidia (NASDAQ:NVDA) and Palantir Technologies (NYSE:PLTR). Those moves signaled his skepticism toward the tech sector's explosive growth, driven by hype implicit artificial intelligence.

Now, Burry has turned his regard to different high-flyer: Tesla (NASDAQ:TSLA). In a caller Substack post, helium labeled the electrical conveyance elephantine "ridiculously overvalued," unveiling a caller abbreviated position. This isn't Burry's archetypal creation with Tesla -- helium held a $530 cardinal bearish stake successful 2021 -- but it underscores his presumption that the stock's surge defies fundamentals amid intensifying contention and questionable enactment decisions.

Burry's takedown of Tesla hinges connected a halfway issue: its sky-high valuation. With shares trading astir $430 and a marketplace headdress exceeding $1.4 trillion, Tesla commands a price-to-earnings aggregate of implicit 287 times trailing net -- dwarfing accepted automakers similar Ford (NYSE:F) oregon General Motors (NYSE:GM), which hover beneath 15.

Burry argues this premium stems from relentless optimism among investors, who support pivoting narratives to warrant the price. "Tesla’s marketplace capitalization is ridiculously overvalued contiguous and has been for a bully agelong time," helium wrote bluntly. He points to the "Elon cult" -- die-hard fans who championed electrical cars until rivals similar BYD and bequest players ramped up, past shifted to autonomous driving dreams, and present hype humanoid robots similar Optimus. But Burry warns contention volition inevitably erode these edges, arsenic it has Tesla's 41% U.S. EV marketplace share.

No Burry critique lands without a jab astatine leadership, and Elon Musk draws crisp occurrence here. Burry slams Musk's recently approved $1 trillion compensation bundle arsenic a monolithic dilution threat, exacerbating Tesla's already assertive stock-based pay. He calculates the institution hands retired astir 3.6% of shares annually to employees, with zero buybacks to antagonistic the erosion.