In a regulatory filing on Monday, investor Michael Burry revealed he has long puts against 800,100 Tesla (TSLA) shares, equating to about $534 million by the end of this year’s Q1, according to a filing with the U.S. Securities and Exchange Commission (via CNBC).
Update: According to Gary Black, the bet against Tesla may actually be in the $50 to $60 million range.
For the record, Michael Burry has NOT made a $534M bet against $TSLA. That is the notional value of the shares underlying the puts as of 3/31 (800,100 x 3/31 price of $668 = $534M). The actual size of the bet is likely $50-$60M. @lorakolodny @CNBCnow doesn’t know the difference.
— Gary Black (@garyblack00) May 18, 2021
Made famous by the book and later film “The Big Short,” Burry and his firm Scion Asset Management were early benefactors from the subprime mortgage crisis between 2007 and 2010.
In addition to the filing, Burry has tweeted in the past that Tesla’s regulatory credit profits may also hamper the company’s long-term prospects, an opinion that other experts have also expressed following the announcement of the company’s record-breaking Q1 earnings.
TSLA Touches $900 Per Share, Reaching New All-Time High Ahead of Q4 Earnings https://t.co/FvklPOgHVv
— TeslaNorth.com (@RealTeslaNorth) January 25, 2021
According to sources familiar with the subject, Tesla may also be planning to enter the U.S. Renewable Fuel Credit Market, an industry that generated 18 billion credits in 2020 alone.
When underlying securities for a stock fall in price, investors profit from any puts, effectively shorting the stock. At the end of March, Burry owned 8,001 put contracts, each with values, strike prices, and expiration dates unknown.
While Tesla’s shares have been dropping in recent months, following a decrease in sales in the Chinese market, the company has also been facing separate regulatory concerns in China, the U.S., and Germany.
