‘Big Short’ investor Michael Burry says Tesla shares could shed 90% without major falls – and a fall could reduce speculation

Michael Burry.

  • Michael Burry says Tesla shares can shed 90% without going down on the financial system.
  • “The Big Short” investor suggested that a downturn could dampen speculation.
  • Burry, who is short Tesla, has criticized reckless investment in recent months.
  • Visit the Business Insider website for more stories.

If Tesla shares crash 90% this year, it will stop cult-like support from certain companies without jeopardizing the financial system, Michael Burry tweeted on Monday.

“$ TSLA below $ 100 / share later in the year will not go down over the system,” the investor said. “There is no reflexivity in such a case,” he continued, dismissing the risk of a positive feedback loop in which investors lose confidence and raise their money, hurt the economy and intimidate investors even more.

“But that would trigger the end of an era for a certain type of investment,” Burry added. His latest comments repeat his recent criticism of speculative bets on Tesla, bitcoin and GameStop and his warning of “dangerous” bubbles in markets last week.

Read more: GOLDMAN SACHS: These 40 highly shorted stocks could be the next GameStop if retailers target them – and the group has already almost doubled in the last 3 months

Burry is best known for his billion-dollar bet against the U.S. housing market in the mid-2000s, which was immortalized in author Michael Lewis’ book “The Big Short.” Scion Asset Management Manager too laid the groundwork for the recent GameStop short-squeeze when he invested in the video game retailer in 2019.

The investor has been skeptical of Tesla since at least last fall, when he began tweeting about the automaker’s limited profitability, reliance on sales of regulatory credits and sky-high valuation relative to its industries.

Burry revealed he was short Tesla in December and called the stock price “ridiculous.” Elon Musk’s electric vehicle company has increased in market value by 37% north of 780 billion. Dollars since then.

Read more: Tom Finke tells how he went from running a $ 345 billion money manager to participating in the SPAC boom as a sponsor – and shares 3 characteristics that investors should look for in a non-profit blank check company

Scion bosses compared his bet against Tesla for his bet on a collapse in the housing market in a January tweet. “My last Big Short got bigger and bigger and BIGGER too,” he said. “Enjoy it while it lasts.”

It may seem extreme for Burry to propose a drop in Tesla’s stock price from more than $ 815 from Friday’s close to under $ 100. However, the company’s shares traded at this level as late as April last year.

Here’s a chart showing Tesla’s remarkable stock performance over the past year:


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