'Big Short' investor Michael Burry reveals he's short Tesla, tells Elon Musk to issue more stock at its 'ridiculous price'
- Michael Burry, whose bet against the housing market was made famous by "The Big Short," revealed in a late-Tuesday tweet that he's short Tesla.
- The hedge fund manager advised CEO Elon Musk to issue more shares while they sit at their "ridiculous" levels.
- "That's not dilution. You'd be cementing permanence and untold optionality," he added.
Tesladipped as much as 7.1% on Wednesday before paring losses and trading roughly 3% lower.
- Watch Tesla trade live here.
The famed investor Michael Burry has revealed that he's short Tesla and advised CEO Elon Musk to issue more shares while they sit what Burry called their "current ridiculous" levels.
Tesla shares have rallied more than 575% this year, boosted more recently by the company's coming inclusion in the S&P 500 and fading profitability concerns. Some of Wall Street's more bearish analysts have turned more optimistic toward the stock, and favor from waves of retail investors has further supported Tesla's lofty valuation.Not every bear has been converted, though. Burry reiterated his pessimistic outlook for the company in a late-Tuesday tweet, adding that Musk should take advantage of the sky-high stock price to raise more cash.
He continued: "You'd be cementing permanence and untold optionality. If there are buyers, sell that #TeslaSouffle."Read more: 'Beyond every historic extreme': A notorious market bear reiterates his call that the 'overextended' S&P 500 will suffer a 70% crash - and says stocks are facing 12 years of negative returns as they get trounced by Treasurys
The hashtag seems to reference a letter Musk sent to Tesla employees on Tuesday, in which he warned that the automaker's stock could "get crushed like a souffle under a sledgehammer" if profit margins didn't improve.The automaker's share price fell as much as 7.4% on Wednesday morning before paring losses and trading roughly 3% lower. Burry rose to fame after the financial crisis for his then-unusual bet against the housing market. His trade was among those captured in Michael Lewis' best-selling novel "The Big Short." He was played by Christian Bale in the 2015 film adaptation.
The hedge fund manager included a spreadsheet in the tweet detailing Tesla's financial performance against older automakers. The company touts an industry-high market capitalization but posts total profits and revenue far below those seen by Toyota, Volkswagen, and other major car companies.
Tesla traded at $566.25 a share as of 3:30 p.m. ET on Wednesday. The company has 22 "buy" ratings, 42 "hold" ratings, and 19 "sell" ratings from analysts.
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