Short seller Michael Burry just took a swipe at another richly valued stock: Tesla (TSLA).
Burry, who rose to fame shorting the housing market during the 2008 financial crisis, dubbed the EV maker as “ridiculously overvalued” in a Substack post on Sunday. Business Insider was first to report on Burry’s latest missive.
His post took aim at the “tragic algebra” of stock-based compensation, and Tesla was an example. Tesla dilutes its stock by 3.6% a year, he said, and offers no buybacks.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry said, adding that CEO Elon Musk’s $1 trillion dollar pay package will dilute Tesla stock even further. Last month, Tesla shareholders approved the controversial pay package at its shareholder meeting.
Burry added another dig at Tesla’s various pivots as the automaker pushed deeper into other areas of tech.
“As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up,” Burry wrote in parentheses.
Burry did not disclose any position in Tesla stock.
Last month, the short seller took a sizable short position in both Nvidia (NVDA) and Palantir (PLTR) stock via put options, which investors typically buy if they are betting on a stock to fall.
Burry also subsequently deregistered his hedge fund, Scion Capital, and took to Substack to post his views.
Noted short seller Jim Chanos told Yahoo Finance’s Laura Bratton that he also had concerns about Nvidia’s use of vendor financing to boost sales, which Burry complained about as well.
Both Chanos and Burry have held Tesla short positions at points in the past.
Musk has in the past slammed short sellers of Tesla stock, most recently warning Bill Gates to close out his short position “soon.”
While Burry warns about Tesla’s valuation, Wall Street has become increasingly bullish.
Last week, Melius Research tabbed the EV maker a “must own” due to its autonomy efforts and as CEO Elon Musk talked up its chipmaking progress, which followed Stifel the week before upping its price target and reiterating Tesla’s Buy rating, citing Tesla’s strength in full self-driving (FSD) and its robotaxi service.
Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on X and on Instagram.
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