Michael Burry Declares Tesla “Ridiculously Overvalued”

Famed investor Michael Burry has launched a scathing critique of Tesla. Labeling the electric vehicle maker “ridiculously overvalued” in a new public commentary. The short seller, renowned for predicting the 2008 financial crisis, specifically targeted Tesla’s stock-based compensation practices and Elon Musk’s controversial $1 trillion pay package in a Substack post published Sunday. Burry argued that Tesla dilutes its stock by approximately 3.6% annually while offering no buybacks to offset this dilution. Creating what he described as a “tragic algebra” for shareholders.

Critique of Tesla’s Strategic Direction and Valuation

Beyond valuation concerns, Burry questioned Tesla’s evolving business focus, suggesting the company shifts emphasis whenever facing increased competition. “The Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up,” Burry wrote. This criticism comes despite Tesla recently receiving bullish upgrades from Wall Street firms including Melius Research. Which labeled Tesla a “must own” stock, and Stifel, which raised its price target citing strength in full self-driving technology and robotaxi services.

Broader Short Positions in Tech Stocks

Burry’s Tesla critique follows his recent disclosure of substantial short positions against other technology leaders. Last month, his hedge fund Scion Asset Management took put options against both Nvidia and Palantir, indicating a broader skepticism toward high-flying tech valuations. These moves align with comments from fellow short seller Jim Chanos, who has also expressed concerns about Nvidia’s sales practices. Burry has since deregistered his hedge fund and now primarily shares his investment views through his Substack platform. Maintaining his reputation as a prominent market skeptic.

Michael Burry: Market Context and Conflicting Analyst Views

Burry’s bearish stance contrasts sharply with growing Wall Street optimism toward Tesla. The company recently secured shareholder approval for Musk’s massive compensation package, which Burry warned would further dilute shareholder value. Meanwhile, Tesla continues to trade at premium valuations despite increasing competition in the electric vehicle sector. The divergence between Burry’s criticism and analyst upgrades highlights the ongoing debate about whether Tesla’s ambitious growth projections in autonomy, robotics, and artificial intelligence justify its current market capitalization.

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