Just when you thought we were finished with all of this shorting business, the biggest shorter of them all comes for Tesla once again.
It’s only mid-February and already we’re sick of talking about short-selling. However, when Michael Burry — the man that famously made a billion-dollar bet against the U.S. housing market back in the mid-2000s — makes a big announcement about a stock that he believes is oversold, you bet that we’re going to sit up and listen.
So who is the target of Burry’s ire this time around?
Tesla (ducks head).
What’s his beef with Tesla?
Yesterday, Burry tweeted:
“$TSLA below $100/share by later this year will not crash the system. There is no reflexivity in such a fall, but it would trigger the end of an era for a certain type of investing,”
The tweets have since been deleted (Burry deletes all of his tweets, apparently), but the sentiment was clear — Burry believes that the frothiness around Tesla stock, which is up close to five-fold in the past year, could be wiped out by as much as 90% and it would still not crash the wider market.
To be fair, Burry’s beef with Tesla goes way back. A couple of months ago, he criticised the company’s sky-high valuation and reliance on regulatory credits to maintain a profit, while before Christmas, he even revealed that he had shorted Tesla stock. Unfortunately for Burry, Tesla stock is up about 40% since the start of December.
The comment about “a certain type of investing” also harkens to the cult-like following that Tesla and its CEO Elon Musk have, as well as a rising trend of speculative investing and day trading we have seen crop up over the past year (of course, Burry was a big critic of the GameStop squeeze we saw last month, even though he benefited from it).
But all I want to know is — who’s going to play Elon in the movie version of this?
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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.