The investor who rose to fame for making billions off bets against mortgage securities amid the financial crisis is now making a sizable bet against electric vehicle maker Tesla (NASDAQ: TSLA).
Michael Burry of “The Big Short” fame disclosed a short position against Tesla worth $534.4 million through his Scion Asset Management. In a filing with the SEC, Scion said it bought more than 800,000 put options against the EV maker in the first quarter, giving it the right to sell Tesla shares on or before an unidentified date in the future.
Tesla earned record profit of $438 million in the first quarter while also sidestepping an industry-wide semiconductor shortage, improving its manufacturing, and making some money off its Bitcoin investment.
However, after closing at an all-time high of $883.09 on January 26 following a yearlong rally that saw the stock push higher by nearly 700%, Tesla shares have since sunk lower with the stock down more than 18% in the last month alone and is down almost 34% from its peak.
Burry’s first quarter bet against Tesla isn’t his first.
Last December, he said in a since-deleted tweet that his firm was short the carmaker, citing its reliance on regulatory credits to generate profits as a red flag.
Burry also advised Tesla CEO Elon Musk to sell shares to raise capital while his stock—then on a wild run-up from the pandemic lows—was at what he called “ridiculous” levels.
In January, Burry doubled-down on that bet. “Well, my last Big Short got bigger and bigger and BIGGER too,” he said in another since-deleted tweet on January 10. “Enjoy it while it lasts.”
While there’s no way to know when Burry’s Scion made its most recent bets against Tesla, at what price the puts are in the money, and how much the firm paid for them, but given that the stock is down since March 31, it’s likely to have paid off.
“Tesla is down [12%] since the end of the first quarter, so on balance, these puts have been profitable, though it’s impossible to know for sure,” said Steve Sosnick, chief strategist at Interactive Brokers LLC. Burry’s “expressing the type of skepticism that many have on Tesla. I would have to believe that he accumulated various Tesla options at various strikes, and some of them probably have expired.”