“The Big Short” investor Michael Burry has criticized Tesla in a new blog post, arguing that the Elon Musk–led company is “ridiculously overvalued.” His comments come only days after he raised concerns about the current boom in artificial intelligence stocks.
Burry estimated that Tesla is diluting its shareholders by roughly 3.6% each year, noting that the company does not conduct stock buybacks. He added that Musk’s massive compensation package is likely to increase dilution over time.
In his Substack newsletter Cassandra Unchained, published Sunday, Burry wrote that Tesla’s market capitalization has been “ridiculously overvalued” for a long period. Musk’s pay plan could deliver as much as $1 trillion in stock over the next decade, assuming the company meets a series of performance milestones.
Tesla’s valuation remains far above broader market benchmarks. As of the most recent close, the stock traded at about 209 times forward earnings, compared with its five-year average of 94. By contrast, the S&P 500 trades around 22 times forward earnings, according to LSEG data.
Tesla did not immediately comment when contacted by Reuters.
This is not the first time Burry has taken a bearish position on Tesla. In May 2021, Scion Asset Management disclosed a large short bet against the automaker through options. Burry later told CNBC in October 2021 that he had exited the position and described it as a short-term trade.
Burry became widely known for his successful bet against subprime mortgage securities during the 2007–2008 financial crisis, a story chronicled in Michael Lewis’s book The Big Short and its film adaptation.
More recently, Burry has criticized major technology companies including Nvidia and Palantir, questioning the sustainability of the cloud infrastructure boom. He has also accused some companies of using aggressive accounting methods to boost reported profits tied to large hardware investments.
Burry launched his Substack newsletter Cassandra Unchained in November, saying that the paid publication now has his “full attention” after closing Scion Asset Management and returning investor capital.
