"The Big Short" investor Michael Burry, known for his profitable bet against the U.S. housing market during the 2008 financial crisis, has slammed Tesla Inc.'s (NASDAQ:TSLA) valuation. Could the EV giant be his next target?
‘Ridiculously Overvalued,' Says Michael Burry
Sharing his thoughts in a blog post on Monday, the investor criticized the EV giant's valuation. "Tesla’s market capitalization is ridiculously overvalued today," Burry said in the blog post, adding that market cap and valuation have been overvalued for a long time.
Tesla did not immediately respond to Benzinga's request for comment.
He also outlined that CEO Elon Musk's trillion-dollar pay package, approved by investors, would lead to stock dilution; other entities have shared such concerns in the past in the buildup to last month's shareholder vote.
Burry added that the EV giant dilutes shareholders at approximately 3.6% annually, citing stock-based compensation for employees without buybacks to offset the impact.
Targeting supporters of Musk and his various enterprises, Burry said that they remain bullish until there's competition in the sector. "As an aside, 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 said, though he did not reveal any Tesla positions.
Michael Burry Vs Palantir And Nvidia
The investor has been a vocal critic of companies like Palantir Technologies Inc. (NASDAQ:PLTR) as well as chipmaker Nvidia Corp (NASDAQ:NVDA), with SEC filings suggesting that his position against both companies was valued at $912.1 million and $186.58 million, respectively. Burry also closed down his fund, Scion Asset Management, recently.
The investor has also commented on the recent artificial intelligence push in the tech industry, going as far as drawing parallels between the current industry trend to the dot-com bubble in the early 00s.
Elon Musk's Orbital Ambitions, Tesla's Falling Sales
Meanwhile, Musk recently doubled down on his ambitions of putting AI datacenters in space, predicting a convergence between his enterprises like Tesla, SpaceX and xAI. He also called Tesla a world leader in "real-world AI" during a recent interview.
However, Tesla sales have continued to fall across multiple regions in the globe, with the latest data suggesting that the automaker recorded a near 50% drop in sales in Europe.
Tesla scores well on the Momentum metric, while offering satisfactory Quality and Growth, but poor Value. Tesla also has a favourable price trend in the Medium and Long term. For more such insights, sign up for Benzinga Edge Stock Rankings today!
Price Action: TSLA slipped 0.01% to $430.14 at Market close, further declining 0.36% to $428.60 in the After-hours session, according to Benzinga Pro data.
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