Elon Musk’s Tesla has become the target of the “The Big Short” investor Michael Burry’s scrutiny. In a recent blog post, Burry gave his thoughts on the company’s current valuation and made some concerning predictions about its future.
Michael Burry criticises Elon Musk’s Tesla
Investor and hedge fund manager Michael Burry has criticized Tesla on the Sunday edition of his Substack newsletter ‘Cassandra Unchained.’ He also took aim at Elon Musk’s new $1 trillion pay plan, which was approved by Tesla shareholders in November, saying that it will have a further impact on its valuation.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry wrote in the blog. According to an estimation presented by the investor, Tesla dilutes its shareholders at a rate of approximately 3.6% per year without any buybacks. He further predicted that Musk’s new compensation plan would make the dilution worse. (via Reuters)
On November 3, Tesla shareholders agreed on a record-breaking pay package for Elon Musk that will make him the first trillionaire in the world. If the CEO manages to achieve a string of targets, such as reaching a market capitalization of $8.5 trillion, he would make upwards of $1 trillion in stock.
This isn’t the first time Burry has voiced his concern about Tesla. In May 2021, he revealed a bearish bet against the Musk-led company. However, five months later, the investor shared that he is not betting against Tesla anymore, calling his position just a trade.
Burry first rose to global prominence in the late 2000s, when he accurately predicted the subprime mortgage crisis that led to the 2008 financial crisis. It was documented in the 2010 bestseller “The Big Short: Inside the Doomsday Machine,” by financial journalist Michael Lewis. The book was later adapted into the Oscar-winning movie of the same name starring Christian Bale, Steve Carell, Ryan Gosling, and Brad Pitt.
Originally reported by Namrata Ghosh on Mandatory.
