‘Big Short’ investor Michael Burry reveals he’s short on Tesla, tells Elon Musk to issue more shares at his ‘ridiculous price’

• Michael Burry, whose bet against the housing market was made famous by “The Big Short,” revealed Tuesday night Tweeter that he is short Tesla.
• The hedge fund manager has advised CEO Elon Musk to issue more stocks while they are at their “ridiculous” levels.
• “It is not a dilution. You would cement the permanence and the incalculable faculty,” he added.
• Tesla plunged to 7.1% on Wednesday before cutting losses and trading around 3% lower.
• Watch Tesla Trade Live Here.

---

Famous investor Michael Burry has revealed he’s running out of Tesla and has advised CEO Elon Musk to issue more stocks while they are at their “ridiculous current” levels.

Tesla shares have risen more than 575% year-to-date, boosted by the company’s upcoming inclusion in the S&P 500 and diminishing profitability concerns. Some of Wall Street’s more bearish analysts have become more bullish on the stock, and the favor of waves of retail investors has further supported Tesla’s high valuation.

However, not all bears have been converted. Burry reiterated his pessimistic outlook for the company on Tuesday evening Tweeter, adding that Musk should take advantage of the exorbitant share price to raise more liquidity.

“So, @elonmusk, yeah, I’m running out of TSLA $, but some free advice for a good guy … Seriously, issue 25-50% of your stock at the current ridiculous price. This isn’t dilution.” , Burry tweeted.

He continued, “You would cement the permanence and the incalculable faculty. If there are buyers, sell this #TeslaSouffle.”

Read more: Creator of new volatility index for the Nasdaq 100 explains how investors can protect portfolios laden with tech names – and why he thinks it is superior to the VIX

The hashtag appears to refer to a letter Musk sent to Tesla employees on Tuesday, in which he warned that the automaker’s stock could “be smashed like a blast from a hammer” if profit margins do not improve.

The automaker fell 7.4% Wednesday morning before cutting losses and trading around 3% lower.

Burry rose to fame after the financial crisis for his then unusual bet against the real estate market. His craft was captured in Michael Lewis’ bestselling novel “The Big Short”. He was played by Christian Bale in the 2015 film adaptation.

The hedge fund manager included a spreadsheet in the tweet detailing Tesla’s financial performance against older automakers. The company claims a high market capitalization in the sector, but posts profits and total revenue well below those seen by Toyota, Volkswagen and other major auto companies.

Burry has espoused his bearish outlook online in the past. Ahead of Tesla’s Battery Day event, the investor pointed to Tesla’s low margins and questioned the rationality of its industry-leading market capitalization. Although the automaker has steadily posted quarterly profits since the late September event, its valuation has only gone up.

Tesla traded at $ 566.25 per share at 3:30 p.m. ET on Wednesday. The company has 22 “buy” ratings, 42 “hold” ratings and 19 “sell” ratings from analysts.

Now read more market coverage from Markets Insider and Business Insider:

Salesforce Down 11% After Confirming $ 27.7 Billion Acquisition of Slack, Forecasting Slower Growth

Value and growth stocks may climb together in 2021 as investors divide between vaccine rollout and virus scarring, Wall Street strategist says

Zoom has climbed 497% this year. 3 analysts – including one of the most tech-specific – determine whether you should buy, hold, or sell the stocks as a vaccine becomes widely available.

Insider markets