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 “ridiculously overvalued” in a Substack post on Sunday. Business Insider was the 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 has diluted 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 pay package will drive Tesla stock even higher. Last month, Tesla shareholders approved the controversial pay package at its shareholders meeting.
Burry added another dig into Tesla’s various pivots as the automaker pushed deeper into other areas of technology.
“As an aside, the Elon cult was all-in on electric cars until the competition showed up, then all-in on autonomous driving until the competition showed up, and now it’s all-in on robots — until the competition shows up,” Burry wrote in parentheses.
Burry did not disclose any positions in Tesla stock.
Last month, the short seller took a sizable short position in both Nvidia ( NVDA ) and Palantir ( PLTR ) stock through put options, which investors typically buy if they’re betting on a stock to fall.
Burry also subsequently deregistered his hedge fund, Scion Capital, and took Substack to air his views.
Noted short seller Jim Chanos told Laura Bratton of Yahoo Finance that he also had concerns about Nvidia’s use of seller financing to boost sales, which Burry also complained about.
Both Chanos and Burry have held short Tesla positions at points in the past.
Musk has slammed short sellers of Tesla stock in the past, and recently warned Bill Gates to close his short position “soon.”
While Burry warns about Tesla’s valuation, Wall Street has become increasingly bullish.
Last week, Melius Research called the EV maker a “must own” because of its autonomy efforts and as CEO Elon Musk talked about its chip progress, he followed Stifel the week before by raising his price target and reiterating Tesla’s Buy rating, citing Tesla’s strength in full self-driving (FSD) and its robotaxis service.
Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow it on X and on Instagram.
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