The 'Big Short' investor Michael Burry says Tesla stock could plunge 90% - and notes Elon Musk said it was overpriced at $160 last year
- The "Big Short" investor
Michael Burrysaid Teslastock could plunge 90% in value.
- Burry noted that Tesla CEO
Elon Musksaid the automaker's stock price was "too high" last year.
Michael Burry suggested Tesla stock could plummet 90% in a now-deleted tweet on Tuesday. The investor of "
"Can $TSLA fall 80, 90%? After 2000, many high flyers did. $AMZN fell 95% 2 decades ago, changed its whole biz, and thrived much later," Burry tweeted.
"May 1, 2020 - $TSLA at $163/share is 'too high' and he was not kidding, said @elonmusk," Burry tweeted, linking to a Wall Street Journal article about the Tesla CEO's comment.
Tesla stock has slumped 16% over the past two trading days, erasing nearly $200 billion from its market capitalization. The sell-off followed Musk's launch of a Twitter poll to determine whether he should sell 10% of his Tesla stock. The poll garnered 3.5 million votes, and 58% of the respondents voted for a sale.
Burry proposed on Monday that Musk might want to cash out some stock to service his personal debts. He noted the executive had 88 million Tesla shares, or 36% of his total stake, pledged as loan collateral as of June 30 this year.
The Scion chief announced he was short Tesla in late 2020, and his fund held bearish put options on the stock as recently as June 30 this year. But Burry told CNBC in October he was no longer betting against Musk's company and that the puts represented a trade, not a long-term position.
The contrarian investor has taken several shots at Tesla over the past year. He described its stock price as "ridiculous" in December 2020, when it was below $600 - a fraction of its $1,024 close on Tuesday.
Burry predicted in January this year that Tesla stock would collapse like the mid-2000s housing bubble and told shareholders to "enjoy it while it lasts."
Moreover, he asserted in February that if the automaker's stock fell below $100, there wouldn't be any major fallout, and it would put an end to zealous, reckless speculation on overhyped
It might seem extreme for Burry to suggest Tesla's stock price could fall 90% to about $100 a share, but it's worth noting the stock traded at that level (on a split-adjusted basis) as recently as April 2020.
Scion and Tesla didn't immediately respond to requests for comment from Insider.
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