According to a report from CNBC on Friday, prominent investor Michael Burry has said he is no longer betting against Tesla Inc., and that his ‘put’ position on 800,100 shares of the company’s stock was “just a trade”.
Back in May, regulatory filings from Burry’s investment firm, Scion Asset Management, revealed that the company had put options on 800,100 shares of Tesla stock by the end of the first quarter (worth around $534 million USD at the time).
According to analysts, the position had Scion betting anywhere between $50-60 million USD against Tesla.
Historically, Burry hasn’t been Tesla’s biggest proponent — following the company’s record-breaking Q1 earnings, the investor expressed major concerns over Tesla’s regulatory credit profits hampering the company’s long-term prospects, an apprehension shared by other experts as well.
When asked whether he was still shorting Tesla, Burry told CNBC he wasn’t, adding that his put position was “just a trade”.
Put options, which Scion had on $534 million USD worth of Tesla stock at the end of Q1, give investors the right to sell shares at a specified price in the future.
“Media really inflated the value of these things. I was never short tens or hundreds of millions of any of these things through options, as was reported. The options bets were extremely asymmetric, and the media was off by orders of magnitude,” said the investor.
Burry is one of the investors featured in the book and later film The Big Short. He and his firm were early benefactors of the subprime mortgage crisis between 2007 and 2010.
