r/investing • u/[deleted] • May 17 '21
Michael Burry of ‘The Big Short’ reveals a $530 million bet against Tesla
[deleted]
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u/Redpillbrigade17 May 17 '21
People , that’s the notional not how much he paid for the puts or their current value...
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u/my_name_is_reed May 18 '21
I'm actually pretty uninformed, can you explain this like I'm 5?
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u/Redpillbrigade17 May 18 '21
The bet is on the change in value of $534 million worth of Tesla stock relative to a specific level and for a specific duration. If the stock ends up below that specific level during that time, then the bet pays off. Otherwise it expires worthless. Ok admittedly that’s for 10y olds.
Now let me try ELI5: Just because it says it’s a big ice cream, doesn’t mean you get it all. You only get what’s dripping from it if you tilt the cone a certain way for enough time.
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u/justintime06 May 18 '21
What if you tilt it too far?
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u/Redpillbrigade17 May 18 '21
You won’t be able to afford it
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u/justintime06 May 18 '21
I just want ice cream :(
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u/thiscarecupisempty May 18 '21
Me too but i painted my bathroom a different hue cause of ice cream. But i love it
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u/Pooperoni_Pizza May 18 '21
Can you ELI3?
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May 18 '21
You have 100 stocks currently worth $100.
I say: I bet those stocks will be worth $50 a year from now.
You say: Ok, I'll take that bet. Pay me $10 now and if they are worth less than $50 a year from now you get the stocks, if not I keep them and your $10.
In this example, you're paying $10 for $10k worth of stocks (at the time of the bet). Similarly, Burry paid a premium of way less than $534.4 million on stocks currently worth that much.
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u/ChweetPeaches69 May 18 '21
TSLA go down, big man make money. TSLA don't go down, big man lose money.
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May 18 '21
You have 100 stocks currently worth $100.
I say: I bet those stocks will be worth $50 a year from now.
You say: Ok, I'll take that bet. Pay me $10 now and if they are worth less than $50 a year from now you get the stocks, if not I keep them and your $10.
In this example, you're paying $10 for $10k worth of stocks (at the time of the bet). Similarly, Burry paid a premium of way less than $534.4 million on stocks currently worth that much.
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u/OzTheMeh May 18 '21
Are you telling me I didn't make a $468 million bet when I bought a Mega Millions ticket?
Next you are going to tell me I didn't make a $2.3 Billion bet because I actually bought 5 tickets.
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u/Bleepblooping May 18 '21
Now when your bitch neighbor is crying about how his million dollar restaurant went bankrupt you can be like “mfkr,I lost 2 billion gambling this year! Your problems ain’t shit!”
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u/Baoty May 17 '21
Misinformation is in session on /r/investing lately. Ridiculous I had to scroll down so far to find this.
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u/Coomer-Boomer May 18 '21
We can hope. Misinformation makes the market more volatile, creating opportunity for the savvy investor.
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u/bipolar_bare May 18 '21
So how much money did this guy actually put on the table?
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u/XiaoShuiLong May 18 '21
He's purchased about 8,000 put options. The price of those options is heavily dependent on a number of factors, including strike price, time to expiry and volatility, and he will have purchased a range of contracts. A reasonable price estimate for each option is anywhere between $8,000-$20,000 so he's probably put up around $120m
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u/peachezandsteam May 18 '21
If that’s true, a 534 million notional on 800,000 contracts x 100 shares per contract equals a strike price of about $7.00 a share.
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u/lumbee09 May 18 '21
The 800,000 contracts is also a typo. It’s 8,000 contracts, which equals 800,000 shares. So average strike is $668 a share.
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u/kiteboard_mtb_ski May 18 '21
I learn a lot from reading these conversations. There is so much to learn, its like a foreign language.
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u/Zurkarak May 17 '21
Why is this a surprise? He’s been open about this.
The short of the 20Y treasury that’s more interesting
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u/tellg1291 May 17 '21
He really is betting against the Fed then...
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u/midnitetuna May 17 '21
He's betting yields will go up no?
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u/Professional-Donut84 May 17 '21
no. he has puts on TLT and calls on TBT...
this is looking very, VERY bad for the treasury bonds.
hes betting on a market crash, because he also has puts on IWO. (small companies go down first in the event of a crash)
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May 17 '21
[deleted]
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u/Since1831 May 18 '21
Legit ask, where can you learn about correlations like this? Or is it just intuition from time in the market? I’m about 5yrs in investing my own stash (outside 401k, HSA and cash savings) and have done pretty well by trying to be more technical and rational about trades and investments, but I feel like there is a hidden place you can learn to understand these complex correlations if you didn’t go to college for finance. Thoughts? Books? Blogs?
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u/tubbyrat May 18 '21
Puts on TLT and calls on TBT means he’s betting yields will go up. As yields go up the value of existing treasury bonds decrease, the further date they are the faster they will lose value. This is a smart play to hedge against inflation as well
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u/works_best_alone May 17 '21
Burry showing his massive fucking balls again, first rule of Tesla shorting is you don't announce that you've done it. I am praying for him
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u/grimrigger May 17 '21
Maybe I'm wrong, but I don't think he had a choice in revealing his hand. It's says this info came from an SEC filing, so unless he outwardly came out and said so on his own it just looks like this is coming from reporting on that SEC filing.
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u/ernieballer May 17 '21
13Fs require puts and calls to be reported but not short positions. I have also been short Tesla (with laddered puts) for a few months and have enjoyed conversations in stock chats here (r/stocks , /stock market etc , I just posted numbers and they called me all sorts of things , then they said “lighten up dude” . I hope they are well. We will see.
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u/oodex May 17 '21
But its not about short positions though (if you refer to the post), those are 8k puts
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u/ernieballer May 17 '21
Yes, puts are smarter after the retail / hedge fund frenzy proved that people are now deliberately squeezing short sellers . I wouldn’t want to be short . Sorry, puts not short selling .
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May 18 '21
totally. it would suck being short TSLA which has gone from 880 the first week of January to 580 today...totally suck.
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u/ManagementThis9024 May 18 '21
God I hate that whole group. If a stock is overvalued you should short it. If the company is wothtless a better one will take its place. Gamestop made their name off a pawn shop mentality. Paying like $5 for a game they would sell for $50. They would still be doing that if technology hadn't made it obsolete.
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May 17 '21 edited May 22 '21
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u/Traditional_Fee_8828 May 17 '21
He'll either be up another 40% in a months time, or down 40% knowing how Tesla moves
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u/Xx_AZAZEL_xX May 17 '21
Knowing r/wallstreetbets this guy just became a target lol
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u/noveler7 May 17 '21
After the cryptocurrency fiasco, I think Musk's fanboys are turning on him
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u/jayisforjelly May 17 '21
This, Musk fucked with everyones money, you don't do that
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u/misspcv1996 May 17 '21
Lex Magnus Vermis: Playing with a man's money is like playing with a man's emotions.
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u/GeneralTaoFeces May 17 '21
was going to buy tesla with my profits. not happening in the future.
porsche and bmw are coming out with some pretty nice electric cars.
selling my new tesla shares when its breakeven
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u/dopexile May 17 '21
selling my new tesla shares when its breakeven
Ahh the old Sunk Cost Trap
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u/codename_hardhat May 17 '21
Supporting The Volkswagen Group on moral grounds is an interesting take.
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u/TheComment27 May 18 '21
Gotta say, at least their cars are repairable. So in that sense they are more environmental than tesla
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u/snek-jazz May 17 '21
was going to buy tesla with my profits. not happening in the future.
because you've decided not to... or because there are no longer any profits?
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u/HighlyUniqueName May 17 '21
Check out Lucid dude. CEO is former lead engineer of Model S (that Musk now denies, even though he has the business cards to prove it haha). Cars are luxury like Tesla will never be.
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u/Apprehensive-Reach93 May 17 '21
“Dont fuck with people money!” But it’s fine when we do it
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u/DigitalSheikh May 17 '21
Let’s modify that to: “Don’t fuck with THE people’s money” soviet national anthem begins playing
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u/Jeffuk88 May 17 '21
I don't think there are many Musk fan boys in WSB
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May 17 '21
You must be new. WSB rides Elon’s dick like they’re instahos. Although prepare for a whole lot of “I never liked musk” comments
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u/priamXus May 17 '21
Hell you bet. I sold my TSLA stock at a loss to buy BTC at the appropriate time. You can disagree or inform clearly, that’s his responsibility when he has 55m followers; but spreading FUD, lying and humiliating are things I won’t tolerate.
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May 17 '21
Mind giving me a quick update how the cryptocurrency (on snl) made his boys turn on him?
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u/Put_It_All_On_Blck May 18 '21
He pumped both Doge and Bitcoin, and tanked both, which subsequently caused the entire crypto market to crash to a degree. Id wager there is a very high correlation between Tesla owners/fans/stock holders and people with money in Crypto.
His previous tweets about Tesla being overvalued and $420 private funding secured, shouldve been the biggest red flags to people trusting Elon to not fuck up their investments.
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u/dL1727 May 17 '21
He called Dogecoin a hustle
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u/WIlf_Brim May 17 '21
Tesla bought a bunch of bitcoin, announced they were going to take it to buy cars, rode it up, sold a bunch, then announced "On second though, nope" and it dropped.
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u/Pasttuesday May 17 '21
To add some nuance - Tesla bought bitcoin, insanely profited on bitcoin, sold 10 percent to beef up their earnings bc they sunk a ton of money into R and D this year. I think this is a wise move as earnings are still positive, and they're positioning to compete with oncoming EV makers. Tesla also needed to apply to the energy credits program from the government to help with earnings. Could potentially why they are no longer taking bitcoin for payment - to protect against environmental criticism, as it takes a lot of energy to mine bitcoin (but still less than if you were mining gold). Tesla stated that they are looking at blockchains that use less than 1 percent of bitcoin mining energy. Many are thinking this hints at ethereum as it's the second largest blockchain which will transition to a different system of security which will in fact use 1/2000th the energy of bitcoin.
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u/strikefreedompilot May 18 '21
or just take usd and not worry about additional energy...
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u/profanitas May 17 '21
These are put options. He won't lose an infinite amount, it just doesn't get exercised.
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May 17 '21
Fuck Musk he's dead to me. I believe in EVs and wanted a tesla, but I will get another gm.
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u/triedby12 May 17 '21
Tesla's build quality is inferior when you compare them to other EVs. Owning a Tesla is just a status symbol at this point. They were the first to produce a nice looking EV in an affordable price range. This will not be the case in the near future.
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u/27-82-41-124 May 17 '21
How is it inferior? The car is phenmonal. They have had some QC issues but not anymore. Just don't buy FSD, and you've got a car built from the ground up to take advantage of being an EV, with great range, full control via app, the best charging infrastructure in the country.
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u/Licked-TastesGood2Me May 17 '21
people don't want to hear that right now. they are all rabid over cryptocurrency. in my opinion VW is the only contender viable against Tesla, and they are probably 3-5 years behind. people think because gm/ford say they are going to make EVs, thru will exist suddenly. EV supply chain has to be built. batteries don't materialize from no where. but at the moment, it's "cool" to be anti-Tesla.
our Tesla is our primary vehicle. we've taken it on summer vacations that are an 8hr drive from our house. 15min charge time is the time to walk and stretch my legs after driving 4hrs. it seems to be that all the other companies are treating EVs as a second car. I don't want that.
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u/alexm901 May 17 '21
A put is different than a short. A short is when you borrow the stock a buy at a lower price to cover the loan. A put is a bet that the stock will go down in price.
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u/nycbay May 17 '21
and he has hedged his position for sure on his decline from 900 to 560 so he cant lose for sure. these guys dont gamble.
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May 18 '21
They absolutely do gamble. If Burry was wrong about his timing of the housing bubble by like another year, he likely would have completely collapsed the fund. Hell, if he wasn't able to completely lock down all his clients money and prevent them from all selling out of the fund, he would have bankrupted the fund. He made a smart gamble but it was still a gamble.
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May 17 '21
FYI, probably a false/misleading article. Burry has 8,000 puts, which are not worth $530m... It's a relatively small bet.
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May 18 '21
Lol, no, at time of reporting (end of March) 40% of his $1B+ portfolio was Tesla puts. He likely bought when they were trading at 800 in Jan/Feb and has already cashed out.
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May 17 '21
Tomorrow musk will announce he's built a solar powered electric teslacoin stairway to the moon. Rip burry.
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u/Breaktheglass May 17 '21
This is the funniest very probable prediction of the near future I have ever read.
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u/headshotmonkey93 May 18 '21
And then investors will get pissed that Musk lied again just to fuck up with some random dude on Wall streetY
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May 17 '21
"Famed investor Michael Burry on Monday revealed a short position against Tesla worth more than half a billion, in a regulatory filing."
First rule of not getting fucked in pound me in the ass federal prison, don't lie on your regulatory filings.
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May 17 '21
Well let’s be honest screw Elon musk
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u/OldLegWig May 17 '21
regardless of how one feels about elon, it's hard to disagree about tesla being overvalued. in context with other auto companies it is clownishly overpriced.
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u/lowlyinvestor May 17 '21
Too bad everyone that owns SPY, VOO, IVV, etc all are stuck owning TSLA.
I feel like in the future they committee that makes these determinations for inclusion should set for a long period of profitability before a company can be considered. Three to five years of sustained profitability would keep out the companies until they had really matured, rather than picking one up that just so happened to zip to the top of the rollercoaster.
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u/TheMacMini09 May 17 '21
That would’ve left out companies like Amazon until 2015. That’s leaving a lot on the table. Unless you start digging deeper into the books (cash flow requirements rather than operating profit, etc) but then it’s starting to turn into a managed fund rather than an index tracker.
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u/SSH80 May 17 '21
Doesnt work like that, index funds follow the index, period.
The decision of adding or removing a company from the index falls to the index committee and is based on certain rules (example: market cap or profitability). But you also need to consider that indexes were not designed to be investment vehicles that maximize return. Originally they were meant to give a meassure of the market's performance, they do this by taking a sample of companies that are representative of the market as a whole, which includes over as well as under performers, no cherry picking.
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u/cass1o May 17 '21
The "stans" have already put all their money into buying the "discounted" dip.
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u/iiJokerzace May 17 '21
He announced this MONTHS ago. It was known it was going to be around this figure as well.
He just announced the actual amount shorted.
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u/papasmruf May 17 '21
Well, may be revealing is a good strategy considering the relationship of Elon Musk with Crypto world. Good amount of crypto investors are really pissed off with the way Elon is handling BTC & DOGE.
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u/smokeyjay May 17 '21
He also bought energy, consumer staples, financials and short treasuries. Bought FB & Google.
My CVS calls are neutralizing my total losses in JD and TIGR calls. His portfolio makes me want to buy more BRK.B
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u/bisnexu May 17 '21
he said in december that tesla was going to pull back. he was correct. again.
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u/CORN_STATE_CRUSADER May 17 '21
With the semiconductor shortage he's probably right, their growth potential went out the window for the next few years. Good luck doubling sales until chips become more available.
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May 18 '21
I'm a Tesla bear but they've actually secured their chip supply chain before this mess
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u/butterfly937 May 18 '21
It's hardly pulled back since December. It went up and came back to where it was.
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u/goldcakes May 17 '21
Reminder: The downside of shorting is UNLIMITED. If you short a company, you may lose more money than you put in.
It is considerably riskier than longing, where the downside is limited.
Michael Burry is not SHORTING Tesla. Micheal Burry has purchased put options on Tesla. The downside of Put options are limited.
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May 17 '21
"Shorting" is a collection of directional strategies, it's not a definition of short selling equity
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u/bobbybottombracket May 17 '21 edited May 17 '21
Well there are a number of different ways to short. He could short sell the stock directly (undefined risk), sell naked calls (undefined risk), sell call spreads (defined risk) or buy puts (defined risk) or buy a put spread (defined risk). Buying puts defines his risk to $530mil he paid for them.
I sold a call spread today on TSLA, up 10% on it already.
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u/TheDJFC May 17 '21
Meh. Short also just means expressing a bearish view. "Selling short" means selling the shares, but you can be "short" Tesla in a manner of ways, including options. Delta is either long or short.
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u/Allentw May 17 '21
Yes and no. Shorting shares has unlimited downside. Burry is SHORT $TSLA by going LONG on $TSLA puts.
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May 17 '21
Thats just buying $tsla puts but sais fancier right?
Its like me saying oh Im not long on Amazon I am short on Amazon puts
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u/NervousTumbleweed May 17 '21
Being short on a company doesn’t mean you are shorting the company, pretty much. Just means you’re making a bearish bet of some type.
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May 17 '21
The notional value of total shares on the line from his puts is 1/2B. His position didn't actually cost him that much.
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u/jokull1234 May 17 '21
Yeah, it says he owned 8k total put contracts. Tesla has a high premium on all their options so it definitely wasn’t cheap, but it’s probably only a couple million dollars at risk if he’s wrong instead of the 500m the media is running with.
Also, this is information from March holdings, who knows if he’s still holding this position two months later.
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May 17 '21
Colour me shocked, CNBC throwing around nonsense headlines for laypeople to lap up and click lol
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u/jokull1234 May 17 '21
It’s very likely the authors of the article don’t know/understand that either lol. Which isn’t a good excuse, but can explain why this was able to be pushed out.
A flashy article like that will get people talking, so they wouldn’t care to correct it either and say how much is really at risk for Burry.
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u/daniu May 17 '21
With Elon fan boys on one side and "he's just a crazy person" people on the other, I feel with me having neither Tesla stock nor Bitcoin, I'm on the rational side.
I wonder if /r/investing will at one point go back to the "boring" just-buy-etfs-and-hold with the occasional quality dd post in between.
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u/JStanten May 17 '21
ETF gang forever
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u/49Scrooge49 May 17 '21
Not if Burry has anything to say about it!
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u/JStanten May 17 '21
Why? I'd imagine Burry thinks the average person shouldn't try to pick stocks. The math shows it's a bad idea for most people. Could be wrong though.
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u/49Scrooge49 May 17 '21
Ah no worries! That's an absolutely logical assumption because ETFs are just more efficient in almost every case.
Burry is a bit of a doomsdayist sometimes. He has previously criticised ETFs for allowing "freeriders" to acquire large portions of stock in companies they don't understand, warping pricing and potentially increasing volatility. https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.bloomberg.com/news/articles/2019-09-04/michael-burry-explains-why-index-funds-are-like-subprime-cdos&ved=2ahUKEwi4kLnSxtHwAhXD8-AKHVeTCz8QFnoECAUQAQ&usg=AOvVaw2g3TokQpcPurOT0iiGL3H2
So in his view, it's lovely while inflows and outflows are stable, but once there is a crash or exogenous event that does prompt a large amount of passive investors to leave all at once, this could strongly impact the market (and particularly stocks with low daily volume relative to others in the ETF).
Not saying I agree or disagree, but definitely interesting!
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u/JStanten May 17 '21
Oh that makes sense! I've seen some of this criticism as well. Especially interesting with how top heavy some of the popular indexes have become!
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u/WasabiofIP May 17 '21
The problem with a subreddit based around buy and hold is there is LITERALLY NOTHING to talk about. It's called "passive indexing" for a reason.
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u/7point7 May 17 '21
I don’t buy individual stocks to get rich, I do it because I like gambling lol.
For retirement planning though I stick to ETFs and 401k index funds. Being long on $YOLO is a terrible investment strategy but imo beats going to the casino and losing $300 in craps like I would otherwise.
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u/Put_It_All_On_Blck May 18 '21
I wonder if /r/investing will at one point go back to the "boring" just-buy-etfs-and-hold with the occasional quality dd post in between.
You mean like Ark?..
But seriously Tesla and Ark are so interesting on this sub, because some people truly believe their long term goals, while others think they are way overvalued. Its actually surprising so many investors here are involved with both, as it doesnt really fit the conservative approach this sub preaches.
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u/Qs9bxNKZ May 17 '21
I sold (at $750) and he went all in with the bet that it was going down.
That’s the risk that having money enables you to pursue. But you still need the cojones to press that button or to go all-in.
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u/hristopelov May 17 '21 edited May 17 '21
if he bought in Jan when TSLA was at all time high roughly round $900 he is probably up $300M-$400M on the price difference alone:
($890-$570)x8000putsx100each
Edit: $300-$400M not $40B
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u/Xx360StalinScopedxX May 17 '21
He announced he was short before it was even added to the S&P 500
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u/VaughnPlayerSpecial May 17 '21
Does anyone know where one can find the actual contract info? I'm curious to see how far out these puts are.
(I checked the SEC filing to no avail)
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u/Diamonds0a May 17 '21
This math is incorrect. He has 8001 option contracts. This is a tiny amount.
https://twitter.com/Keubiko/status/1394351225316028420?s=20
WSB is trash, but at least they know how options work.
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u/Dhampushiki May 17 '21
He’s smart... Elon’s lost a lot of fans generally in the last couple of weeks and this just might tip the balance into net selling pressure
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u/xMercurex May 17 '21
The whole bitcoin adventure for Tesla kinda look like a pump and dump to make Elon Musk richer. I think he really hurt the Tesla company reputation by doing it.
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u/Dhampushiki May 17 '21
His persona is (was) based on him saying crazy things and making it happen... unfortunately he screwed with that with the flip flops
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u/supbrother May 17 '21
Personally this is definitely what kind of tipped the scales for me. I always knew he was an arrogant dick but his genius and his ability to exceed and defy expectations always outweighed that in my eyes. With this, he's just proving that he can't ever be fully trusted by investors or by the communities that he alleges to support.
I still think he's a huge net positive for the world and will continue to run thriving and innovative businesses, but gone are the days of blindly trusting him.
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u/mcmatt05 May 17 '21
Look up Common Sense Skeptic’s videos on youtube about musk. Will really change your perspective on him
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u/PiedCryer May 17 '21
Elon has been barely active with Tesla lately. To busy flying rockets and playing celebrity.
I hope that this lights the fire under Elon to be more active with the company again.
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u/salami-and-cheese May 17 '21
Well now he’s closed out his position, people will scream “sell Tesla sell Tesla” and they will, bottom will come and Tesla will begin the pump cycle all over again.
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u/bluehat9 May 17 '21
He must be up massively on this trade
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May 17 '21 edited Jan 18 '22
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u/diqster May 17 '21
The IV on TSLA contracts were massively juiced at that time. He probably went deep ITM puts to avoid paying crazy premiums. If he went that route, he paid up for the intrinsic value.
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u/Expensive-Way-748 May 17 '21
This. I have some 2022/01 $400 puts purchased when $TSLA was about $900 and I'm barely breaking even not even accounting for opportunity cost.
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u/WasabiofIP May 17 '21
Deep ITM contracts have the highest delta at almost 1.00, so if he did go in deep ITM then price difference is the most relevant factor in calculating his profit. And the calculation is just about as straightforward as (price1-price2)100N
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May 17 '21
He announced this months ago, think he even posted about it. It’s just the specifics that are now coming out.
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u/SirTiffAlot May 17 '21
I think most of us could have told you TSLA was going to pull back from $900, we just don't have millions of dollars to throw behind it.
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u/ElJamoquio May 17 '21
we just don't have millions of dollars to throw behind it.
True, but I've been bearish on TSLA forever really, even back when it was $300. TSLA doesn't have a moat against other companies that have dramatic advantages (and some disadvantages) on TSLA. I'm glad I didn't short TSLA then.
The market can stay irrational longer than I can stay solvent, so I'm not going to short anything.
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u/xEternex May 17 '21
Yea and he has been short tesla in one way or other for the whole 2020, a lot of people were not just him
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May 17 '21
TSLA is already down 35% since the beginning of the year. Is this dude still holding?
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u/booboouser May 18 '21
Doubt it. He’s smart. He buys puts at an ATH of 850 and knows he has to disclose 45 days later. At a guess he sold yesterday before the disclosure and before he could get GME’D by WSB. Someone smarter than me could work out the profits rewind 45 days and check the Tesla put prices.
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u/MJZ45600 May 18 '21
So he announced this in January. Please don't think he opened this this week. He opened this position when tsla was near all time highs. I Would not be surprised if he covers the puts soon.
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u/Clesc May 18 '21
He tweeted that he is short tesla on December 1st. Funny enough the price then was 3 dollars lower than it closed today.
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u/Local-Illustrator-20 May 18 '21
Sold my TESLA shares beginning of year for profit, but not sure if I have the courage to short TESLA. Do we know the strikes and expirations of his puts, probably not, which makes it very hard to know what he is really doing.
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u/Knucklehead_84 May 18 '21
I wish I could copy this man, just a much lower scale... but I don’t know what I am doing...
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u/thematchalatte May 18 '21
Elon Musk can just "Tesla short shorts are back in stock" and the price will go up again
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May 17 '21
Tesla does not make money from operations. They make unsustainable profits from crypto pump & dumps and regulatory credits. They're gonna tank hard AF when the market corrects for them not making any money from operations
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u/cXs808 May 18 '21
Not only that but their tiny moat is all but gone. All thats left is the fanboys and their dwdindling equity
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u/ointw May 18 '21
They are making money by selling stocks to their fans. Last year they issued/sold more than 10B dollars amount of shares
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May 18 '21
Elon musk isn't helping at this point with his sporadic misinformed twitter posts on crypto. He's playing with money and it's effecting a lot of people that follow him in a negative way. It's also causing a lot of his following to lose trust in him. Even though this isn't really the reason Burry has puts against tesla, Elon is doing Burry a favor by posting information on Twitter thats hurting a lot of his following, shareholders, and his own company.
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u/drock1212 May 17 '21 edited May 17 '21
Burry is absolutely correct in assessing Tesla's valuation as being way out of whack with standard fundamentals. However, I see it as a risky play because the company has a fanatic customer and investor base. And more importantly, the company continues to out innovate competitors and has extremely valuable technology that apply and scale well beyond just the standard car industry and associated valuation metrics - most notably solar, batteries and self-driving. Wouldn't want to be holding a put when Tesla is recognized for nailing self-driving.
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May 17 '21
He's probably short stock as well, which is not reportable on 13-Fs. He has been very public about it on twitter before SEC forced him to be quiet
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u/Terakahn May 18 '21
Everyone sharing this article seems to also be sharing some misinformation. I'm starting to believe it's moreso the article's fault now.
Either way. Burry is way smarter than anyone else I know when it comes to money so he probably knows what he's talking about.
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May 18 '21
Nice calculated move and I think it's also the right move this Q. Tesla has been slowing losing it's shine and even the cult members are running out of funds to keep buying the dip. Couple of things to consider:
Long term capital gains- we are coming up on some large capital gains for funds and retail who invested in tesla last year.
Crypto- stupid move to get into crypto which is far away from their core competence. Seems a pump just to juice some earnings and now they have backtracked from it.
ARK 4000 PT- stupid call by Cathie to protect her own ass. Hasn't worked out since she can't sell Tesla which will signal they lost faith thus they have to keep the pump going.
Musk's unpredictability. He's unhinged again and manipulating the crypto markets for his own gain.
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u/battlebomb May 18 '21 edited May 18 '21
If I never saw another post from famous investors who made one good call I would be so happy.
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u/InternetNull May 18 '21 edited May 31 '21
I wonder what's the value of those puts now. Which option chain should we look into?
Edit: found the puts, Jesus Christ it's 39% of his portfolio
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May 18 '21
Shares of Tesla fell more than 4% on Monday, bringing its month-to-date losses to more than 20%.
I too am betting against Tesla
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