Michael Burry of ‘The Big Short’ fame has bet US$534 million against Tesla

May 18, 2021 11:07 AM AEST

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Furquan Moharkan

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Michael Burry of ‘The Big Short’ fame has bet US$534 million against Tesla — Image source: Recently launched Model S of Tesla is pictured at a showroom in Paris, France. © Ifeelstock | Megapi

Summary

Burry is long puts against 800,100 shares of Tesla worth US$534 million.

The value, strike price, or expiry of the put contract is unknown.

Tesla shares fell 2.19% in NASDAQ overnight.

Micheal Burry, the investor famous for foreseeing the subprime mortgage crisis and profiting from it, has a short position worth US$534 million against the electric vehicle maker Tesla Inc (NASDAQ:TSLA), a regulatory filing has revealed.

According to the form 13-F of Scion Asset Management, the company is long puts against 800,100 shares of billionaire Elon Musk-headed company – that translates to US$534 million by the end of the first quarter ended March 2021.

As the owner of a put option can sell 100 shares per contract held, Burry owns 8,001 put contracts. The value, strike price, or expiry of the put contract is, however, unknown.

An agreement that gives seller an option to sell the shares at a pre-determined price, is more valuable when the price of the asset decreases – which, in a way conveys a bearish position on a particular stock by that investor.

Mr Burry, the CEO of Scion Asset Management, shot to fame after he bet against mortgage securities before the 2008 crisis – which is chronicled in the book named ‘The Big Short’ and an Oscar-winning movie of the same name.

Earlier in February, Mr Burry had tweeted that according to him, Tesla may have timed its US$1.5 billion purchase of Bitcoin to distract from its China woes – where regulators had summoned the company over quality concerns. Interestingly, his Twitter profile doesn’t exist anymore, after months of public tweets warning investors about market bubble. The move had come just weeks after he told his followers that his tweets about market trends had summon from the US Securities and Exchange Commission.

Also Read: Has Tesla dumped Bitcoin holdings? Elon Musk drops a hint

Tesla, which has seen turbulent times in 2021, has seen its share slump 34% in past four months from its life-high – taking it officially into the bear zone. Overnight as well, the company’s shares tanked 2.19% in New York.

After today’s fall in the share prices, Mr Musk, once world’s richest for a brief time, has ceded the second richest slot to French tycoon Bernard Arnault. In the overnight trade of shares, Mr Musk lost US$3.16 billion of his wealth, according to Bloomberg Billionaires Index.