Michael Burry of ‘Big Short’ fame goes short on Tesla and Musk, betting on EV maker’s stock to fall

Michael Burry’s Scion Asset Management owned bearish puts against 800,100 shares of the electric-car maker as of March 31, according to a filing

The filing said the position was worth US$534 million

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Tesla’s chief executive Elon Musk speaking at the 2020 Satellite Conference and Exhibition on March 9, 2020 in Washington, DC. Photo: Getty Images

Published: 12:48pm, 18 May 2021Updated: 12:48pm, 18 May 2021

Michael Burry, the investor who rose to fame for making billions off bets against mortgage securities during the financial crisis, has placed a sizable wager against Elon Musk’s Tesla.

Burry’s Scion Asset Management owned bearish puts against 800,100 shares of the electric-car maker as of March 31, according to a regulatory filing Monday. The puts give Scion the right to sell Tesla shares on or before an unidentified date in the future.

Tesla shares closed at an all-time high of US$883.09 on January 26, after a yearlong rally jolted the stock higher by almost 700 per cent. It had lost a quarter of its value by the end of March, and is down 35 per cent from its peak as of the close Monday.

The bet against Tesla isn’t Burry’s first. He said in a since-deleted tweet in early December that his firm was short shares of the EV maker. The hedge fund manager also advised Musk to sell shares to raise capital while his stock, then on a torrid run from the pandemic lows, was at what Burry called “ridiculous” levels.

Actor Christian Bale, playing the character of Michael Burry in The Big Short from Paramount Pictures and Regency Enterprises. Photo: Paramount Pictures

Tesla earned record profit in the first quarter, sidestepped an industry chip shortage, improved its manufacturing and even made money off bitcoin, its earnings results showed in late April. Yet shares fell in a sign of the lofty expectations the company now contends with. Among the quibbles from analysts: Tesla didn’t offer a specific estimate for vehicle deliveries in 2021.