Michael Burry, just a regular guy who loves shorting stocks, is back. Burry's bet against mortgage-backed securities in the '08 financial crisis made him millions and a portrayal by Christian Bale in the movie, The Big Short. His Big Short 2.0 is Tesla (yikes), revealed in a regulatory filing on Monday. Burry owned 8,001 put contracts with a value of $534 million as of March 31, with an unknown strike price and expiry date. Investors profit from puts when the stock price falls.
Burry has been skeptical of Tesla's sky high valuations. In the past, he has tweeted that Tesla's reliance on regulatory credits (to report positive net income) is a red flag. After 2020's honeymoon period, during which Tesla stock rose 7.4x to a high of $883 in January of this year, the stock has fallen from grace due to slumping sales in China and production delays, and is down 35% from its peak. Tesla is down 14% since the end of Q1, so on paper these puts have been profitable but it is impossible to know for sure.
Short Squeez Takeaway: Shorting might be Burry's favorite pastime but Elon Musk also loves proving his shorters wrong, so this will make for a great UFC 420 showdown. Maybe Elon should stop criticizing Bitcoin, pumping Dogecoin, and focus on Tesla for once? (It might help him remain rich as well)