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Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

325 points by kjhughes 5y ago

kstenerud 5y ago
Tesla has already achieved its objective: To bring about the electric car revolution. Its secondary objective of pushing the self-driving car revolution has done so-so. How Tesla performs going forward is more of a nice-to-have, but otherwise irrelevant since the ball is now rolling and not in danger of stopping anymore. The remaining pieces now are solar generation on building surfaces, battery tech, smart grids to route the energy efficiently, cheap space travel, cheap tunneling, and maybe hyperloop if no one picks it up.
- pnt12 5y ago
  This might be Elon Musk's objective, not Tesla's (whatever that means, as that will be a different thing if you ask it to one of its board members, to a sales person, to a developer, etc).
PartiallyTyped 5y ago
Also related, since we are talking about Michael Burry (alias Cassandra on twitter), besides the subprime mortgage shorting in 08, another interesting bet he made was with GME (gamestop) against the shortsellers. To clarify, Burry was long on GME, I think his bet was done in January, and ended it late december, so very likely more than 5x returns.
- gruez 5y ago
  [deleted]
  - ericd 5y ago
    Not sure how it's ironic, since the GME community hates the shorts, and he's betting against the shorts?
    - gruez 5y ago
      Yeah sorry, I missed the "against" part so I thought he was shorting GME.
  - jypepin 5y ago
    the GME community was long GME, against the shortsellers. So if he did bet against the shortsellers, no it's no ironic.
  - superduperycomb 5y ago
    Isn’t that in line with the GME community. They also bet against the short sellers
  - ska 5y ago
    How is that ironic?
mdorazio 5y ago
I'm having a hard time with this one since from the article it doesn't seem like Burry is seeing anything that isn't very well discussed/analyzed already regarding Tesla. Short sellers have gotten very burned in the past in gambles like this, but they've also sometimes made money. Given how historically irrational the market has been about Tesla, this just seems like a gamble rather than the well-reasoned short position based on deep (and unpopular) analysis that his subprime mortgage play was.
- radicaldreamer 5y ago
  It's likely he's already up massively on his PUTs, which were purchased sometime in Q1. We don't really know the strikes or expiry dates, so it's hard to say.
  - WA 5y ago
    He announced it on Twitter when Tesla was around $580. Not sure if he averaged down his price, but I'd assume so.
- the_mitsuhiko 5y ago
  > this just seems like a gamble rather than the well-reasoned short position based on deep (and unpopular) analysis that his subprime mortgage play was. A short is a gamble all the time because you don't know the time component. Burry was "lucky" in that it happened fast enough. There are lots of people who want to short Tesla but don't dare to because of the cost involved in it and unpredictability of when their bet would pay off.
- jdmoreira 5y ago
  Tesla is a bubble for sure but this is way too risky. Sure, we don’t know the strikes or expiry dates but there are plenty of fan boys to take on the fight against Burry ad infinitum. The market can become irrational longer than you can become solvent. I'm 100% on Burry camp though.
  - thouitsme 5y ago
1cvmask 5y ago
Michael Burry shorted the mortgage backed securities market before most other short sellers. He even suffered from redemptions of his fund and had to disallow them to stop the hemorrhage. Let’s see if his timing is closer to the downwards inflection point now. The market seems super frothy now and I am wary of calling the moment of the inevitable downward spiral. Seen this movie many times before. Just always called it too early (which means you lose). I think being a momentum trader is very hard and requires nerves of steel. https://www.investopedia.com/trading/introduction-to-momentum-trading/ https://www.investopedia.com/trading/introduction-to-momentu...
ehmmmmmmmm 5y ago
Personally I loved every bit of the GME show and I'd love to see short sellers get squeezed on TSLA as well. Shove it to them. We don't need pessimists in this world.
- rubiquity 5y ago
  Short sellers aren’t pessimists. They’re realists.
  - 988747 5y ago
    It's not even about that. It's just about not wasting an opportunity to make money. Some stocks go through cycles: growth, then correction, then growth again. Shorting stock during market corrections helps you maximize your profits. I mean, I can imagine Michael Burry cashing $200M profits when Tesla price goes down, and then switching sides and going long. The most important thing in the stock markets is to remain rational. Don't let your personal like or dislike of Elon Musk stop you from making money. And btw: since March 31st Tesla stock price fell down about $100
    - ecpottinger 5y ago
      I think you bring up an very valid point. In the Tesla forums I see posts from only one person making money over shorting Tesla stock. He works on making $10-$50 a share whenever the stock falls and then he makes money as a long when the stock goes up. Over time he has made a lot of money. He is not greedy, he is steady. On the other-hand, I see tons of people gleefully saying how much they hate Elon and because of him Tesla is going to collapse and as soon as that happens they will make a ton of money. I keep asking them to post when they make this windfall, well it has been over five years for me and so far not one of them have come back to tell how much money they have made. Greed seems to be blinding them to how much their approach is failing. The rational player has been making money for years, the ones who seem to be basing their investments on emotion have never come back to say they made any money. PS. I am a long, I bought Tesla stock at $189 pre-split, even at today's lower prices each share now represents $2825, it has to fall a lot for me to be taking a loss.
Havoc 5y ago
>Michael Burry is long puts ....so short?
- rubiquity 5y ago
  Puts and shorts aren’t the same thing.
- whall6 5y ago
  Yes, but you can also “short” puts by selling them.
- totalZero 5y ago
  Short delta, yes.
- swiley 5y ago
  short/long derivatives doesn't indicate sentiment. I would say "bearish" here.
- HWR_14 5y ago
  I mean, you can also say he has Tesla investments. Long puts are a type of short position which is a kind of Tesla position. However, since it is far more specific it conveys far more information.
ve55 5y ago
As options can grant the buyer significant leverage with each option representing 100 shares, the sum they came up with for the article title is likely a misrepresentation, and if the bet goes wrong notably less money will probably be lost. Either way I don't think articles of this nature are particularly useful however.
- eaenki 5y ago
  So how would you go about making an educated reverse engineering claim on the stake at risk without knowing his other legs nor expiry dates? Is it even possible? How about a wide range?
  - pvarangot 5y ago
    I don't think it's possible. He's also not saying if he's actively managing his puts. He may be actively rolling the date or the price to cash in on red days and re-buy on green days. There's many ways to make a big short bet on a volatile stock pay for itself with day trading until it's no longer a bet and just a free lottery ticket.
paxys 5y ago
The only new reveal is the dollar figure. Burry has been very openly (and vocally) short on Tesla for a while now. He has been Tweeting a bunch about it since September last year. Tesla shares are up ~75% since those original Tweets. "The market can remain irrational longer than you can remain solvent" applies to both amateur traders and the most seasoned investor/genius alike.
- eckmLJE 5y ago
  And Burry is intimately familiar with this, brushing close to that reality as illustrated in The Big Short.
- tenpies 5y ago
  Oh you're completely missing the nuisance of what we just learned. Sure, he's been talking short since September, but the size of his position has grown considerably since then - almost certainly timing the S&P inclusion (sorry index investors, you quite literally paid the top price for a stock that has lost almost 45% since you bought it). He's almost certainly made a killing with his position and the beauty is we don't even know what it is today. He could have realized hundreds of millions in gains, or he could have them all still open. If he has the position from the filings - just today, when Tesla is down $22 - he has made over $16 million dollars in unrealized gains. It will be hilarious watching the Musk Zealots crying to have Elon tweet something to fraudulently try to pump the stock price and try to trigger a squeeze. Meanwhile they don't realize he's doing this with options, not shorting directly.
  - paxys 5y ago
    From the article: > As of March 31, Burry owned 8,001 put contracts, with unknown value, strike price, or expiry, according to the filing. So what are you basing any of this on?
  - epistasis 5y ago
    > (sorry index investors, you quite literally paid the top price for a stock that has lost almost 45% since you bought it). If there's a single index investor that feels saddened by this stat, in the slightest way, they should stop index investing right now. The great joy of index investing is that this single stock is down, while on average everything else is way up...
awb 5y ago
It sounds like the short thesis is centered around Tesla’s revenue coming in large part from regulatory credits. If you take out credits and crypto, they look like most other car manufacturers, struggling to make a profit. > As more automakers produce battery electric vehicles of their own, ostensibly fewer will need to purchase environmental regulatory credits from Tesla, which they have done in order to become compliant with environmental regulations. > In the fourth quarter of 2020, Tesla’s $270 million in net income was enabled by its sale of $401 million in regulatory credits to other automakers.
- atatatat 5y ago
  > It sounds like the short thesis is centered around Tesla’s revenue coming in large part from regulatory credits. Hopefully not (for Burry), because where are those going?
  - rubiquity 5y ago
    Tesla sells its regulatory credits to other auto makers. Other auto makers are becoming more environmentally friendly and are weening off buying credits from Tesla.
- kikokikokiko 5y ago
  Tesla ins't "struggling to make a profit". It never made it. Other than artificially imposed government credits, Tesla business is not and have never been sustainable. Maybe someday people will start to see Musk for the carnival barker that he really is.
- deleted 5y ago
  [deleted]
- thow-01187 5y ago
  Except...the traditional automakers are not struggling to make profit. Not even close. VW Group made $10B last year, during a pandemic year. Toyota $19B. FCA, with their public image of "also ran", $7B. BMW made $4.5B just last quarter. Even minor automakers like Suzuki or Kia still make multiples of Tesla's profit without breaking a sweat
Igorvelky 5y ago
one thing i learned, do not short scammers!
turbinerneiter 5y ago
Teslas price is just too high. I think they will be very successful and become a big, dominant car maker. But their price only makes sense if they end up being the only car maker left. That's not realistic. Building an electric car is not that hard, especially if Tesla already did all the hard lifting for you. For a while I was thinking that the battery play - becoming the number 1 battery supplier - will justify the price, but what I see right now looks like there is many players, old and new, moving in. I won't short them tough, in the end I'm just a dog on the internet and have no clue how stonks work.
- jdmoreira 5y ago
  On the internet no one knows you are a dog :)
  - verelo 5y ago
    This comment reminds me of a car auction i went to years ago: This 2 yr old car with around 250,000kms on it came up, likely used for long distance travel as this was in rural Australia. The car looked like a 2 year old car inside and out, it was completely normal except for the odometer reading. The auctioneer used the line "No one can read the odometer when you're driving on by". I wouldn't have bought it, but i liked the line.
- toomuchtodo 5y ago
  The world needs enormous amounts of stationary storage to transition to zero carbon electrical generation, and nuclear ain’t happening. Tesla sells batteries in lots of products, some with better margins than others.
- cryptoz 5y ago
  Tesla isn't a car company, though. They even removed "Motors" from their name years ago - showing wider interest, and not just batteries. Solar roofing as well, and others. I don't hold TSLA right now, regretfully, I entered pre-split at $27 and sold at $200. I also think the current price is way too high, for what it's worth. WAY too high. But it's not at all about cars, at least not for me, when trying to justify the valuation. It's about energy at large scale, and transportation at large scale. Not just car sales. Or battery sales. Edit: Currently P/E is ~570! I remember it being 1,300 recently. Yikes.
jeremydeanlakey 5y ago
> $530 million bet > long puts against 800,100 shares I find the title misleading. Unless I misunderstand, Michael Burry has not actually put $530M of his money at risk. He's made a much smaller, leveraged bet. $530M is just the notional value.
- actinium226 5y ago
  Well, they got your attention didn't they? A half a billion dollar "bet" is much more eye-catching than "smaller, leveraged bet."
- eaenki 5y ago
  So how would you go about making an educated reverse engineering claim on the stake at risk without knowing his other legs nor expiry dates? Is it even possible? How about a wide range?
  - nostromo 5y ago
    > As of March 31, Burry owned 8,001 put contracts, with unknown value, strike price, or expiry, according to the filing. You can't figure out his position with this information. For example, you could buy very, very out-of-the-money puts for a penny. (Your bet would basically be: TSLA loses 95% of it's value in the next week.) My total value at risk for this bet (of 8,001 put contracts) would be $80.
    - medvezhenok 5y ago
      *Small correction - the minimum value of 8000 put contracts would be $8000, since one put at a price of $.01 actually costs $1 and controls 100 shares of stock (the price is price per share)
  - incrudible 5y ago
    He bought 8001 put options on some undisclosed date at an undisclosed strike date and price. You can take a look at the options chain for TSLA to get an idea. For example, a $450 put for September 17th 2021 would cost about $16.70 per share: https://finance.yahoo.com/quote/TSLA/options?strike=450&straddle=true https://finance.yahoo.com/quote/TSLA/options?strike=450&stra... One option counts for 100 shares, so that would be a (8001 * 16.70 * 100) 13.36 million dollar bet. Suppose that TSLA is worth only $400 on that date, with your right to sell at $450 you'd be in the money for 40 million dollars, or roughly $26 million in profits. If TSLA is worth $450 or more on that date, your options expire worthless.
FinanceAnon 5y ago
“The stock market can remain irrational longer than you can remain solvent.”
- freewilly1040 5y ago
  Michael Burry can remain solvent for quite a while
- tim333 5y ago
  I guess that's a reason he's bought puts rather than actually shorting the stock.
totalZero 5y ago
nb: According to the article, $530m is the notional value of his puts, not the premium he paid. 8k contracts is a fairly substantial trade on a $566 stock, but it's not as sensational as the headline makes it sound.
- eaenki 5y ago
  So how would you go about making an educated reverse engineering claim on the stake at risk without knowing his other legs nor expiry dates? Is it even possible? How about a wide range?
  - totalZero 5y ago
    Realistically, if he made these trades OTC versus his prime broker, only the prime broker (ie, an investment bank) would know. That's how many of the biggest trades are done. The bank may lay off the short vol slowly, or cover it with several strikes and maturities using automated tools. The only time a bank would hedge aggressively is when they expect the customer to come back and do another piece of the same trade. Presumably if they thought the trade were extremely toxic, they would have passed on it. If the contracts were listed, option traders would look at big trades that hit the tape without contingent stock printing simultaneously, and call the brokers that crossed those trades to ask which bank sent the order to the floor. Then they'd compare that against banks which are believed to trade with Burry, and filter to get a guess at how much he traded. This may be tough with TSLA because there is so much activity, but in smaller names where only a couple of big prints go up daily, it's pretty easy to figure out who trades what. The banks that trade options against big players get quoted on a lot of stuff that eventually trades at a different bank, so they can often infer the identity of the client when they see the print hit the tape. CNBC, on the other hand, know nothing and simply report what they are told and what they observe in regulatory filings. Their chief function is not to break news, but rather to distribute it -- like a buddy who is very up-to-date on current events. TL;DR You can often deduce some of the characteristics of a position, but there are ways for a very stealthy market participant to hide the characteristics of his stake.
mbgerring 5y ago
Eventually somebody on Wall Street is going to figure out that Tesla’s business is batteries, that Tesla’s batteries are getting good enough to compete with natural gas peaker plants, and that there is a massive effort underway to convert our electric grid away from burning fossil fuels.
- mbgerring 5y ago
  I don’t understand why more people aren’t focused on this https://www.theverge.com/2021/3/31/22360839/apple-tesla-megapack-energy-storage-grid-solar-batteries https://www.theverge.com/2021/3/31/22360839/apple-tesla-mega...
- jsnell 5y ago
  How does that theory explain Tesla having 20x the market cap of Panasonic?
  - mbgerring 5y ago
    Is Panasonic building replacements for gas fired power plants?
    - mbgerring 5y ago
      It looks like Panasonic has been planning the deployment of a 10MW energy storage system at its own facility in India since 2016. Nothing I can find says whether they actually built it or not, or what phase the project is in. Tesla is capable of mass-producing 10MW battery packs and shipping them today, with manufacturing in the US, and is winning contracts to deploy them internationally.
- jokoon 5y ago
  Nothing beats fossil fuels, what are you talking about?
  - mbgerring 5y ago
    New solar is cheaper than operating existing coal plants: https://www.pv-magazine.com/2020/10/23/its-cheaper-to-build-new-solar-than-it-is-to-operate-coal-plants/ https://www.pv-magazine.com/2020/10/23/its-cheaper-to-build-... Battery storage is becoming cost competitive with natural gas peaker plants: https://www.greentechmedia.com/webinars/webinar/will-energy-storage-replace-peaker-plants#gs.6JwDozs https://www.greentechmedia.com/webinars/webinar/will-energy-...
samingrassia 5y ago
All the weak shorts have washed out or got tired of bleeding premiums for the past 3-5 years - it will be interesting to see if this will reignite that community to put them back on. Long Tesla is very much a pro-cyclical business, if you read between the lines, Burry is also expressing his $500mm opinion that this cycle is coming to an end.
jollybean 5y ago
Scary. When the truth about housing was exposed, the financial system was forced to reconcile. The system has measures in place that must be taken by policy. Ergo, the truth shatters that house of cards. But Tesla? Meet Nikola! The fakest company ever, with no product, no development, a proven liar/scammer leadership, with failed deals and vapourware. Still. Worth. Billions. The kids on RobinHood (and many others) are playing a different game, so the 'truth' matters less. This is why I'm wary that market reality may not take hold for Tesla - and - that this reality is skewing a lot of other securities as well. I almost wishing the Fed would bump up interest rates just a little to bring some reality into the markets.
patorjk 5y ago
> Besides his “Big Short,” Burry made a killing from a long GameStop position recently as the Reddit favorite made Wall Street history with its massive short squeeze. Except I remember reading that he sold for before the price exploded [1]. So although he made a profit, he missed out on the squeeze because he sold too early. [1] https://markets.businessinsider.com/news/stocks/big-short-michael-burry-sold-gamestop-stock-q4-missed-rally-2021-2-1030088508 https://markets.businessinsider.com/news/stocks/big-short-mi...
- overhero 5y ago
  he was not wrong though, just too early
  - patorjk 5y ago
    I'm not saying he's wrong, but the article is misleading. The massive squeeze didn't happen until late January, and Michael had sold his position by the end of December. So although he was right/made a profit, he didn't make a killing from the huge squeeze that made the news.
  - sigstoat 5y ago
    and he was nearly too early in "the big short" as well. and buying puts integrates the timing directly into whether or not you're right. so if he's too early again, he'll be wrong.
  - briankelly 5y ago
    "That's the same thing"
    - jbigelow76 5y ago
      That was a great little scene in that movie, Lawrence's advisor buddy made the most of his 4 or 5 lines of dialogue. https://www.youtube.com/watch?v=pLLgNi5UmB0 https://www.youtube.com/watch?v=pLLgNi5UmB0 (4 minute clip from the movie, warning, spicy language gets used when rich dudes worry they might end up a little less rich.)
cosmojg 5y ago
This guy has been wrong a lot recently. Admittedly, he was right once and in a big way. However, remember that success is mostly luck, and this is orders of magnitude truer for success in public markets. Outside of entertainment, it isn't worth the time to follow celebrity investors.
- selectodude 5y ago
  He was long GME and shorted tech in the early 2000s. He's gotten more than a few trades correct.
- splithalf 5y ago
  Yep. Even Kathy woods understands regression to the mean.
- malshe 5y ago
  What major trades he got wrong recently?
throwaway481048 5y ago
I am not a fan of public figures (seemingly) using their power to attempt to influence price movement in equities. The market action following someone like Elon Musk’s tweets about $GME, DOGE, and others, show high correlation with the sentiment in those tweets, at least from my armchair. Sure, Burry was correct in a similar scenario before. I don’t believe that means others should immediately believe/trust and follow individuals like this to the end of the earth, however. Shorting a stock is a very different - and far more risky - investment “strategy” than the purchasing of a stock. I should know, I lost 2 months of gains on a single short over a 3 day period, despite all market intelligence, facts, and the logic which follows, pointing to the fact which the stock should have bottomed, not skyrocketed. Despite most of its participants being relatively predictable, the market never ceases to surprise. Headlines like this should at least lead to an article with a highly visible notice or disclaimer about the risks of mimicking the mentioned behavior. Edit: I see I am being downvoted without discussion. I’m open to learning what I may have missed.
- vasco 5y ago
  This is a mandatory SEC filling.
antattack 5y ago
Tesla is just too many things to reliably short it though. AI company, car company, transportation company, energy storage/solar company. For example, even amid ongoing China defamation efforts, 4680 battery production 'postponed', updated S and X still being tweaked, upcoming V9 FSD beta release could make the stock blow up again as it did around V8.
d--b 5y ago
He his long puts on $500m worth of stock. So the premium he paid (what he’s betting) is considerably less... stupid headlines.
notJim 5y ago
I wonder if due to the increase in retail trading activity, stocks are becoming less and less tethered to fundamentals. Retail people buy stocks in companies they like, and that they see as the future, regardless of whether the pricing "makes sense" or not according to traditional metrics.
- TeMPOraL 5y ago
  I have a feeling stocks had little to do with fundamentals for pretty much as long as you were able to make more money trading them than from dividends.
motohagiography 5y ago
Not sure Burry priced in TSLA's cryptocurrency play, which (imo) was a giant volatility hedge that will help them make their numbers, and also, oddly, an inventory liquidity hedge that could be used to bludgeon shorts trading on sales data. Burry is probably right about the market for electric cars and TSLA's exposure to raw materials prices and china, but he's wrong about the strategic ability of its leadership.
- motohagiography 5y ago
  Not to self-reply, but this idea of having an opaque and highly volatile basket of cryptocurrencies on your balance sheet might be important. It's not cash, and it's not inventory, it's something more powerful. It means you can sell tranches of it to make your quarterly numbers do what you want them to, with a crypto-hammer you can use to shore up numbers wherever you want. As an accounting device, their liquidity and volatility means you could use them to obliterate shorts by uncloaking a realized massive "profit" just before an earnings call. Crypto can absorb loose cash that creates other liabilities, while carrying the value of that cash over calendar years in a super liquid asset. I'm not a corporate accountant at all, but I would wonder if these properties of crypto could be used as a superweapon against shorts.
mirekrusin 5y ago
He plays classic, shorting overpriced, buying under-priced by raw books. You can get surprise on reality benders like Steve Jobs, Elon Musk or bitcoin. Betting against Elom Musk seems like betting from first principles against first principles guy. Popcorn and watch.
arbuge 5y ago
Few things of note: 1. This is a Q1 report. Positions might have been closed out by now. 2. He also bought a large number of FB and GOOG calls, indicating he's positive about those 2 companies. (Same comment as 1. applies though). 3. Strike prices of all these options positions are unknown. 4. Premiums paid are unknown.
JacKTrocinskI 5y ago
For those interested, you can view other positions Dr. Michael Burry has on the official SEC site: https://www.sec.gov/Archives/edgar/data/1649339/000156761921010281/xslForm13F_X01/form13fInfoTable.xml https://www.sec.gov/Archives/edgar/data/1649339/000156761921...
MrPowers 5y ago
Tesla can grow and sell tons of cars and the stock price might still fall. Cisco Systems is a great example of a fantastically profitable business with a stock price that's still below peak. It's an incredibly successful company that makes more than $10 billion in profit every year. The stock price is still below the March 2000 peak. If Tesla "only" made $20 billion in profit a year, the market would probably consider it a failure. Expectations are high. I can see the bull case for Tesla becoming a multi-trillion dollar company or the bear case. Hard to assess Burry's position without knowing the expiration date and strike price of his puts.
- felixfurtak 5y ago
  Some interesting parallels with automotive industry here. Cisco saw huge valuation base on a perceived future. Nortel (who were more of an incumbent) also saw massive stock price increases at that time. Only one of these two companies survived. Cisco had the right tech but Nortel had fundamentally the wrong tech. I suspect we'll see something similar in the automotive industry.
- roland35 5y ago
  I was curious and looked it up- Cisco is indeed still off of its peak stock price $52 vs $77 in 3/2000... But if you reinvested their dividends you would be a little closer! Just don't adjust for inflation! $10k invested on 1/2000 would have peaked at $14k in March, and now would be worth $9.5k
- bob1029 5y ago
  >Hard to assess Burry's position without knowing the expiration date and strike price of his puts. Even if you knew the exact pieces of paper that he held today, that would tell you nothing about his overall plan. Very few options strategies involve a one-time purchase of contracts in hopes that the dates & prices on those will hold until conclusion. For something this big, you would continue to acquire (and sell) contracts at a range of strike prices & expiration dates until the overall play is concluded.
tengbretson 5y ago
Someone should tell this joker that stocks only go up.
nbardy 5y ago
There is so many people claiming a bubble on Tesla comparing it to a car company and pointing to fundamentals. Tesla is a high growth technology company. Their valuation is all about what they could become. The most talented young people all want to work for Tesla. They have made tons of progress and they have the culture and plans to continue to innovate. None of the old car companies can attract the talent the way Tesla does. They only need to capture the market on one of their big bets to be a runaway tech stock like FAANG. They've got electric cars, batteries(Powerwall), Solar roofs, cross country supercharger stations, and full self driving. Any one of these things could fuel a company by itself.
deleted 5y ago
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jbigelow76 5y ago
The article starts out with bullet points, the third bullet point is this: "Burry previously mentioned in a tweet, that Tesla’s reliance on regulatory credits to generate profits is also an impediment to the company’s long-term prospects" When the Tesla stock price is tied ostensibly to some ephemeral aspect of Elon Musk, who gets his lulz from wreaking havoc on cryptocoin markets, does that kind of analysis really matter? I guess it doesn't until maybe, possibly, eventually it does?
dstryr 5y ago
Not mentioned here, and more importantly in my opinion, are Burry's bets on US Treasury bonds crashing.

325 points by kjhughes 5y ago

Tesla has already achieved its objective: To bring about the electric car revolution. Its secondary objective of pushing the self-driving car revolution has done so-so. How Tesla performs going forward is more of a nice-to-have, but otherwise irrelevant since the ball is now rolling and not in danger of stopping anymore. The remaining pieces now are solar generation on building surfaces, battery tech, smart grids to route the energy efficiently, cheap space travel, cheap tunneling, and maybe hyperloop if no one picks it up.

pnt12 5y ago
This might be Elon Musk's objective, not Tesla's (whatever that means, as that will be a different thing if you ask it to one of its board members, to a sales person, to a developer, etc).

PartiallyTyped 5y ago

Also related, since we are talking about Michael Burry (alias Cassandra on twitter), besides the subprime mortgage shorting in 08, another interesting bet he made was with GME (gamestop) against the shortsellers. To clarify, Burry was long on GME, I think his bet was done in January, and ended it late december, so very likely more than 5x returns.

gruez 5y ago
[deleted]
- ericd 5y ago
  Not sure how it's ironic, since the GME community hates the shorts, and he's betting against the shorts?
  - gruez 5y ago
    Yeah sorry, I missed the "against" part so I thought he was shorting GME.
- jypepin 5y ago
  the GME community was long GME, against the shortsellers. So if he did bet against the shortsellers, no it's no ironic.
- superduperycomb 5y ago
  Isn’t that in line with the GME community. They also bet against the short sellers
- ska 5y ago
  How is that ironic?

mdorazio 5y ago

I'm having a hard time with this one since from the article it doesn't seem like Burry is seeing anything that isn't very well discussed/analyzed already regarding Tesla. Short sellers have gotten very burned in the past in gambles like this, but they've also sometimes made money. Given how historically irrational the market has been about Tesla, this just seems like a gamble rather than the well-reasoned short position based on deep (and unpopular) analysis that his subprime mortgage play was.

radicaldreamer 5y ago
It's likely he's already up massively on his PUTs, which were purchased sometime in Q1. We don't really know the strikes or expiry dates, so it's hard to say.
- WA 5y ago
  He announced it on Twitter when Tesla was around $580. Not sure if he averaged down his price, but I'd assume so.
the_mitsuhiko 5y ago
> this just seems like a gamble rather than the well-reasoned short position based on deep (and unpopular) analysis that his subprime mortgage play was. A short is a gamble all the time because you don't know the time component. Burry was "lucky" in that it happened fast enough. There are lots of people who want to short Tesla but don't dare to because of the cost involved in it and unpredictability of when their bet would pay off.
jdmoreira 5y ago
Tesla is a bubble for sure but this is way too risky. Sure, we don’t know the strikes or expiry dates but there are plenty of fan boys to take on the fight against Burry ad infinitum. The market can become irrational longer than you can become solvent. I'm 100% on Burry camp though.
- thouitsme 5y ago

1cvmask 5y ago

Michael Burry shorted the mortgage backed securities market before most other short sellers. He even suffered from redemptions of his fund and had to disallow them to stop the hemorrhage. Let’s see if his timing is closer to the downwards inflection point now. The market seems super frothy now and I am wary of calling the moment of the inevitable downward spiral. Seen this movie many times before. Just always called it too early (which means you lose). I think being a momentum trader is very hard and requires nerves of steel. https://www.investopedia.com/trading/introduction-to-momentum-trading/ https://www.investopedia.com/trading/introduction-to-momentu...

ehmmmmmmmm 5y ago

Personally I loved every bit of the GME show and I'd love to see short sellers get squeezed on TSLA as well. Shove it to them. We don't need pessimists in this world.

rubiquity 5y ago
Short sellers aren’t pessimists. They’re realists.
- 988747 5y ago
  It's not even about that. It's just about not wasting an opportunity to make money. Some stocks go through cycles: growth, then correction, then growth again. Shorting stock during market corrections helps you maximize your profits. I mean, I can imagine Michael Burry cashing $200M profits when Tesla price goes down, and then switching sides and going long. The most important thing in the stock markets is to remain rational. Don't let your personal like or dislike of Elon Musk stop you from making money. And btw: since March 31st Tesla stock price fell down about $100
  - ecpottinger 5y ago
    I think you bring up an very valid point. In the Tesla forums I see posts from only one person making money over shorting Tesla stock. He works on making $10-$50 a share whenever the stock falls and then he makes money as a long when the stock goes up. Over time he has made a lot of money. He is not greedy, he is steady. On the other-hand, I see tons of people gleefully saying how much they hate Elon and because of him Tesla is going to collapse and as soon as that happens they will make a ton of money. I keep asking them to post when they make this windfall, well it has been over five years for me and so far not one of them have come back to tell how much money they have made. Greed seems to be blinding them to how much their approach is failing. The rational player has been making money for years, the ones who seem to be basing their investments on emotion have never come back to say they made any money. PS. I am a long, I bought Tesla stock at $189 pre-split, even at today's lower prices each share now represents $2825, it has to fall a lot for me to be taking a loss.

Havoc 5y ago

>Michael Burry is long puts ....so short?

rubiquity 5y ago
Puts and shorts aren’t the same thing.
whall6 5y ago
Yes, but you can also “short” puts by selling them.
totalZero 5y ago
Short delta, yes.
swiley 5y ago
short/long derivatives doesn't indicate sentiment. I would say "bearish" here.
HWR_14 5y ago
I mean, you can also say he has Tesla investments. Long puts are a type of short position which is a kind of Tesla position. However, since it is far more specific it conveys far more information.

ve55 5y ago

As options can grant the buyer significant leverage with each option representing 100 shares, the sum they came up with for the article title is likely a misrepresentation, and if the bet goes wrong notably less money will probably be lost. Either way I don't think articles of this nature are particularly useful however.

eaenki 5y ago
So how would you go about making an educated reverse engineering claim on the stake at risk without knowing his other legs nor expiry dates? Is it even possible? How about a wide range?
- pvarangot 5y ago
  I don't think it's possible. He's also not saying if he's actively managing his puts. He may be actively rolling the date or the price to cash in on red days and re-buy on green days. There's many ways to make a big short bet on a volatile stock pay for itself with day trading until it's no longer a bet and just a free lottery ticket.

paxys 5y ago

The only new reveal is the dollar figure. Burry has been very openly (and vocally) short on Tesla for a while now. He has been Tweeting a bunch about it since September last year. Tesla shares are up ~75% since those original Tweets. "The market can remain irrational longer than you can remain solvent" applies to both amateur traders and the most seasoned investor/genius alike.

eckmLJE 5y ago
And Burry is intimately familiar with this, brushing close to that reality as illustrated in The Big Short.
tenpies 5y ago
Oh you're completely missing the nuisance of what we just learned. Sure, he's been talking short since September, but the size of his position has grown considerably since then - almost certainly timing the S&P inclusion (sorry index investors, you quite literally paid the top price for a stock that has lost almost 45% since you bought it). He's almost certainly made a killing with his position and the beauty is we don't even know what it is today. He could have realized hundreds of millions in gains, or he could have them all still open. If he has the position from the filings - just today, when Tesla is down $22 - he has made over $16 million dollars in unrealized gains. It will be hilarious watching the Musk Zealots crying to have Elon tweet something to fraudulently try to pump the stock price and try to trigger a squeeze. Meanwhile they don't realize he's doing this with options, not shorting directly.
- paxys 5y ago
  From the article: > As of March 31, Burry owned 8,001 put contracts, with unknown value, strike price, or expiry, according to the filing. So what are you basing any of this on?
- epistasis 5y ago
  > (sorry index investors, you quite literally paid the top price for a stock that has lost almost 45% since you bought it). If there's a single index investor that feels saddened by this stat, in the slightest way, they should stop index investing right now. The great joy of index investing is that this single stock is down, while on average everything else is way up...

awb 5y ago

It sounds like the short thesis is centered around Tesla’s revenue coming in large part from regulatory credits. If you take out credits and crypto, they look like most other car manufacturers, struggling to make a profit. > As more automakers produce battery electric vehicles of their own, ostensibly fewer will need to purchase environmental regulatory credits from Tesla, which they have done in order to become compliant with environmental regulations. > In the fourth quarter of 2020, Tesla’s $270 million in net income was enabled by its sale of $401 million in regulatory credits to other automakers.

atatatat 5y ago
> It sounds like the short thesis is centered around Tesla’s revenue coming in large part from regulatory credits. Hopefully not (for Burry), because where are those going?
- rubiquity 5y ago
  Tesla sells its regulatory credits to other auto makers. Other auto makers are becoming more environmentally friendly and are weening off buying credits from Tesla.
kikokikokiko 5y ago
Tesla ins't "struggling to make a profit". It never made it. Other than artificially imposed government credits, Tesla business is not and have never been sustainable. Maybe someday people will start to see Musk for the carnival barker that he really is.
deleted 5y ago
[deleted]
thow-01187 5y ago
Except...the traditional automakers are not struggling to make profit. Not even close. VW Group made $10B last year, during a pandemic year. Toyota $19B. FCA, with their public image of "also ran", $7B. BMW made $4.5B just last quarter. Even minor automakers like Suzuki or Kia still make multiples of Tesla's profit without breaking a sweat

Igorvelky 5y ago

one thing i learned, do not short scammers!

turbinerneiter 5y ago

Teslas price is just too high. I think they will be very successful and become a big, dominant car maker. But their price only makes sense if they end up being the only car maker left. That's not realistic. Building an electric car is not that hard, especially if Tesla already did all the hard lifting for you. For a while I was thinking that the battery play - becoming the number 1 battery supplier - will justify the price, but what I see right now looks like there is many players, old and new, moving in. I won't short them tough, in the end I'm just a dog on the internet and have no clue how stonks work.

jdmoreira 5y ago
On the internet no one knows you are a dog :)
- verelo 5y ago
  This comment reminds me of a car auction i went to years ago: This 2 yr old car with around 250,000kms on it came up, likely used for long distance travel as this was in rural Australia. The car looked like a 2 year old car inside and out, it was completely normal except for the odometer reading. The auctioneer used the line "No one can read the odometer when you're driving on by". I wouldn't have bought it, but i liked the line.
toomuchtodo 5y ago
The world needs enormous amounts of stationary storage to transition to zero carbon electrical generation, and nuclear ain’t happening. Tesla sells batteries in lots of products, some with better margins than others.
cryptoz 5y ago
Tesla isn't a car company, though. They even removed "Motors" from their name years ago - showing wider interest, and not just batteries. Solar roofing as well, and others. I don't hold TSLA right now, regretfully, I entered pre-split at $27 and sold at $200. I also think the current price is way too high, for what it's worth. WAY too high. But it's not at all about cars, at least not for me, when trying to justify the valuation. It's about energy at large scale, and transportation at large scale. Not just car sales. Or battery sales. Edit: Currently P/E is ~570! I remember it being 1,300 recently. Yikes.

jeremydeanlakey 5y ago

> $530 million bet > long puts against 800,100 shares I find the title misleading. Unless I misunderstand, Michael Burry has not actually put $530M of his money at risk. He's made a much smaller, leveraged bet. $530M is just the notional value.

actinium226 5y ago
Well, they got your attention didn't they? A half a billion dollar "bet" is much more eye-catching than "smaller, leveraged bet."
eaenki 5y ago
So how would you go about making an educated reverse engineering claim on the stake at risk without knowing his other legs nor expiry dates? Is it even possible? How about a wide range?
- nostromo 5y ago
  > As of March 31, Burry owned 8,001 put contracts, with unknown value, strike price, or expiry, according to the filing. You can't figure out his position with this information. For example, you could buy very, very out-of-the-money puts for a penny. (Your bet would basically be: TSLA loses 95% of it's value in the next week.) My total value at risk for this bet (of 8,001 put contracts) would be $80.
  - medvezhenok 5y ago
    *Small correction - the minimum value of 8000 put contracts would be $8000, since one put at a price of $.01 actually costs $1 and controls 100 shares of stock (the price is price per share)
- incrudible 5y ago
  He bought 8001 put options on some undisclosed date at an undisclosed strike date and price. You can take a look at the options chain for TSLA to get an idea. For example, a $450 put for September 17th 2021 would cost about $16.70 per share: https://finance.yahoo.com/quote/TSLA/options?strike=450&straddle=true https://finance.yahoo.com/quote/TSLA/options?strike=450&stra... One option counts for 100 shares, so that would be a (8001 * 16.70 * 100) 13.36 million dollar bet. Suppose that TSLA is worth only $400 on that date, with your right to sell at $450 you'd be in the money for 40 million dollars, or roughly $26 million in profits. If TSLA is worth $450 or more on that date, your options expire worthless.

FinanceAnon 5y ago

“The stock market can remain irrational longer than you can remain solvent.”

freewilly1040 5y ago
Michael Burry can remain solvent for quite a while
tim333 5y ago
I guess that's a reason he's bought puts rather than actually shorting the stock.

totalZero 5y ago

nb: According to the article, $530m is the notional value of his puts, not the premium he paid. 8k contracts is a fairly substantial trade on a $566 stock, but it's not as sensational as the headline makes it sound.

eaenki 5y ago
So how would you go about making an educated reverse engineering claim on the stake at risk without knowing his other legs nor expiry dates? Is it even possible? How about a wide range?
- totalZero 5y ago
  Realistically, if he made these trades OTC versus his prime broker, only the prime broker (ie, an investment bank) would know. That's how many of the biggest trades are done. The bank may lay off the short vol slowly, or cover it with several strikes and maturities using automated tools. The only time a bank would hedge aggressively is when they expect the customer to come back and do another piece of the same trade. Presumably if they thought the trade were extremely toxic, they would have passed on it. If the contracts were listed, option traders would look at big trades that hit the tape without contingent stock printing simultaneously, and call the brokers that crossed those trades to ask which bank sent the order to the floor. Then they'd compare that against banks which are believed to trade with Burry, and filter to get a guess at how much he traded. This may be tough with TSLA because there is so much activity, but in smaller names where only a couple of big prints go up daily, it's pretty easy to figure out who trades what. The banks that trade options against big players get quoted on a lot of stuff that eventually trades at a different bank, so they can often infer the identity of the client when they see the print hit the tape. CNBC, on the other hand, know nothing and simply report what they are told and what they observe in regulatory filings. Their chief function is not to break news, but rather to distribute it -- like a buddy who is very up-to-date on current events. TL;DR You can often deduce some of the characteristics of a position, but there are ways for a very stealthy market participant to hide the characteristics of his stake.

mbgerring 5y ago

Eventually somebody on Wall Street is going to figure out that Tesla’s business is batteries, that Tesla’s batteries are getting good enough to compete with natural gas peaker plants, and that there is a massive effort underway to convert our electric grid away from burning fossil fuels.

mbgerring 5y ago
I don’t understand why more people aren’t focused on this https://www.theverge.com/2021/3/31/22360839/apple-tesla-megapack-energy-storage-grid-solar-batteries https://www.theverge.com/2021/3/31/22360839/apple-tesla-mega...
jsnell 5y ago
How does that theory explain Tesla having 20x the market cap of Panasonic?
- mbgerring 5y ago
  Is Panasonic building replacements for gas fired power plants?
  - mbgerring 5y ago
    It looks like Panasonic has been planning the deployment of a 10MW energy storage system at its own facility in India since 2016. Nothing I can find says whether they actually built it or not, or what phase the project is in. Tesla is capable of mass-producing 10MW battery packs and shipping them today, with manufacturing in the US, and is winning contracts to deploy them internationally.
jokoon 5y ago
Nothing beats fossil fuels, what are you talking about?
- mbgerring 5y ago
  New solar is cheaper than operating existing coal plants: https://www.pv-magazine.com/2020/10/23/its-cheaper-to-build-new-solar-than-it-is-to-operate-coal-plants/ https://www.pv-magazine.com/2020/10/23/its-cheaper-to-build-... Battery storage is becoming cost competitive with natural gas peaker plants: https://www.greentechmedia.com/webinars/webinar/will-energy-storage-replace-peaker-plants#gs.6JwDozs https://www.greentechmedia.com/webinars/webinar/will-energy-...

samingrassia 5y ago

All the weak shorts have washed out or got tired of bleeding premiums for the past 3-5 years - it will be interesting to see if this will reignite that community to put them back on. Long Tesla is very much a pro-cyclical business, if you read between the lines, Burry is also expressing his $500mm opinion that this cycle is coming to an end.

jollybean 5y ago

Scary. When the truth about housing was exposed, the financial system was forced to reconcile. The system has measures in place that must be taken by policy. Ergo, the truth shatters that house of cards. But Tesla? Meet Nikola! The fakest company ever, with no product, no development, a proven liar/scammer leadership, with failed deals and vapourware. Still. Worth. Billions. The kids on RobinHood (and many others) are playing a different game, so the 'truth' matters less. This is why I'm wary that market reality may not take hold for Tesla - and - that this reality is skewing a lot of other securities as well. I almost wishing the Fed would bump up interest rates just a little to bring some reality into the markets.

patorjk 5y ago

> Besides his “Big Short,” Burry made a killing from a long GameStop position recently as the Reddit favorite made Wall Street history with its massive short squeeze. Except I remember reading that he sold for before the price exploded [1]. So although he made a profit, he missed out on the squeeze because he sold too early. [1] https://markets.businessinsider.com/news/stocks/big-short-michael-burry-sold-gamestop-stock-q4-missed-rally-2021-2-1030088508 https://markets.businessinsider.com/news/stocks/big-short-mi...

overhero 5y ago
he was not wrong though, just too early
- patorjk 5y ago
  I'm not saying he's wrong, but the article is misleading. The massive squeeze didn't happen until late January, and Michael had sold his position by the end of December. So although he was right/made a profit, he didn't make a killing from the huge squeeze that made the news.
- sigstoat 5y ago
  and he was nearly too early in "the big short" as well. and buying puts integrates the timing directly into whether or not you're right. so if he's too early again, he'll be wrong.
- briankelly 5y ago
  "That's the same thing"
  - jbigelow76 5y ago
    That was a great little scene in that movie, Lawrence's advisor buddy made the most of his 4 or 5 lines of dialogue. https://www.youtube.com/watch?v=pLLgNi5UmB0 https://www.youtube.com/watch?v=pLLgNi5UmB0 (4 minute clip from the movie, warning, spicy language gets used when rich dudes worry they might end up a little less rich.)

cosmojg 5y ago

This guy has been wrong a lot recently. Admittedly, he was right once and in a big way. However, remember that success is mostly luck, and this is orders of magnitude truer for success in public markets. Outside of entertainment, it isn't worth the time to follow celebrity investors.

selectodude 5y ago
He was long GME and shorted tech in the early 2000s. He's gotten more than a few trades correct.
splithalf 5y ago
Yep. Even Kathy woods understands regression to the mean.
malshe 5y ago
What major trades he got wrong recently?

throwaway481048 5y ago

I am not a fan of public figures (seemingly) using their power to attempt to influence price movement in equities. The market action following someone like Elon Musk’s tweets about $GME, DOGE, and others, show high correlation with the sentiment in those tweets, at least from my armchair. Sure, Burry was correct in a similar scenario before. I don’t believe that means others should immediately believe/trust and follow individuals like this to the end of the earth, however. Shorting a stock is a very different - and far more risky - investment “strategy” than the purchasing of a stock. I should know, I lost 2 months of gains on a single short over a 3 day period, despite all market intelligence, facts, and the logic which follows, pointing to the fact which the stock should have bottomed, not skyrocketed. Despite most of its participants being relatively predictable, the market never ceases to surprise. Headlines like this should at least lead to an article with a highly visible notice or disclaimer about the risks of mimicking the mentioned behavior. Edit: I see I am being downvoted without discussion. I’m open to learning what I may have missed.

vasco 5y ago
This is a mandatory SEC filling.

antattack 5y ago

Tesla is just too many things to reliably short it though. AI company, car company, transportation company, energy storage/solar company. For example, even amid ongoing China defamation efforts, 4680 battery production 'postponed', updated S and X still being tweaked, upcoming V9 FSD beta release could make the stock blow up again as it did around V8.

d--b 5y ago

He his long puts on $500m worth of stock. So the premium he paid (what he’s betting) is considerably less... stupid headlines.

notJim 5y ago

I wonder if due to the increase in retail trading activity, stocks are becoming less and less tethered to fundamentals. Retail people buy stocks in companies they like, and that they see as the future, regardless of whether the pricing "makes sense" or not according to traditional metrics.

TeMPOraL 5y ago
I have a feeling stocks had little to do with fundamentals for pretty much as long as you were able to make more money trading them than from dividends.

motohagiography 5y ago

Not sure Burry priced in TSLA's cryptocurrency play, which (imo) was a giant volatility hedge that will help them make their numbers, and also, oddly, an inventory liquidity hedge that could be used to bludgeon shorts trading on sales data. Burry is probably right about the market for electric cars and TSLA's exposure to raw materials prices and china, but he's wrong about the strategic ability of its leadership.

motohagiography 5y ago
Not to self-reply, but this idea of having an opaque and highly volatile basket of cryptocurrencies on your balance sheet might be important. It's not cash, and it's not inventory, it's something more powerful. It means you can sell tranches of it to make your quarterly numbers do what you want them to, with a crypto-hammer you can use to shore up numbers wherever you want. As an accounting device, their liquidity and volatility means you could use them to obliterate shorts by uncloaking a realized massive "profit" just before an earnings call. Crypto can absorb loose cash that creates other liabilities, while carrying the value of that cash over calendar years in a super liquid asset. I'm not a corporate accountant at all, but I would wonder if these properties of crypto could be used as a superweapon against shorts.

mirekrusin 5y ago

He plays classic, shorting overpriced, buying under-priced by raw books. You can get surprise on reality benders like Steve Jobs, Elon Musk or bitcoin. Betting against Elom Musk seems like betting from first principles against first principles guy. Popcorn and watch.

arbuge 5y ago

Few things of note: 1. This is a Q1 report. Positions might have been closed out by now. 2. He also bought a large number of FB and GOOG calls, indicating he's positive about those 2 companies. (Same comment as 1. applies though). 3. Strike prices of all these options positions are unknown. 4. Premiums paid are unknown.

JacKTrocinskI 5y ago

For those interested, you can view other positions Dr. Michael Burry has on the official SEC site: https://www.sec.gov/Archives/edgar/data/1649339/000156761921010281/xslForm13F_X01/form13fInfoTable.xml https://www.sec.gov/Archives/edgar/data/1649339/000156761921...

MrPowers 5y ago

Tesla can grow and sell tons of cars and the stock price might still fall. Cisco Systems is a great example of a fantastically profitable business with a stock price that's still below peak. It's an incredibly successful company that makes more than $10 billion in profit every year. The stock price is still below the March 2000 peak. If Tesla "only" made $20 billion in profit a year, the market would probably consider it a failure. Expectations are high. I can see the bull case for Tesla becoming a multi-trillion dollar company or the bear case. Hard to assess Burry's position without knowing the expiration date and strike price of his puts.

felixfurtak 5y ago
Some interesting parallels with automotive industry here. Cisco saw huge valuation base on a perceived future. Nortel (who were more of an incumbent) also saw massive stock price increases at that time. Only one of these two companies survived. Cisco had the right tech but Nortel had fundamentally the wrong tech. I suspect we'll see something similar in the automotive industry.
roland35 5y ago
I was curious and looked it up- Cisco is indeed still off of its peak stock price $52 vs $77 in 3/2000... But if you reinvested their dividends you would be a little closer! Just don't adjust for inflation! $10k invested on 1/2000 would have peaked at $14k in March, and now would be worth $9.5k
bob1029 5y ago
>Hard to assess Burry's position without knowing the expiration date and strike price of his puts. Even if you knew the exact pieces of paper that he held today, that would tell you nothing about his overall plan. Very few options strategies involve a one-time purchase of contracts in hopes that the dates & prices on those will hold until conclusion. For something this big, you would continue to acquire (and sell) contracts at a range of strike prices & expiration dates until the overall play is concluded.

tengbretson 5y ago

Someone should tell this joker that stocks only go up.

nbardy 5y ago

There is so many people claiming a bubble on Tesla comparing it to a car company and pointing to fundamentals. Tesla is a high growth technology company. Their valuation is all about what they could become. The most talented young people all want to work for Tesla. They have made tons of progress and they have the culture and plans to continue to innovate. None of the old car companies can attract the talent the way Tesla does. They only need to capture the market on one of their big bets to be a runaway tech stock like FAANG. They've got electric cars, batteries(Powerwall), Solar roofs, cross country supercharger stations, and full self driving. Any one of these things could fuel a company by itself.

deleted 5y ago

[deleted]

jbigelow76 5y ago

The article starts out with bullet points, the third bullet point is this: "Burry previously mentioned in a tweet, that Tesla’s reliance on regulatory credits to generate profits is also an impediment to the company’s long-term prospects" When the Tesla stock price is tied ostensibly to some ephemeral aspect of Elon Musk, who gets his lulz from wreaking havoc on cryptocoin markets, does that kind of analysis really matter? I guess it doesn't until maybe, possibly, eventually it does?

dstryr 5y ago

Not mentioned here, and more importantly in my opinion, are Burry's bets on US Treasury bonds crashing.