‘Big Short’ investor Michael Burry tweeted recently that TESLA stock price is ridiculous, and he is shorting it. Tesla Already went down 6% today.
Tesla stock price has been going up like crazy lately and investors who bet against it have felt the pain. TSLA has gone up in price by more than 800% during last year, which means that short-sellers have lost billions. Tesla CEO Elon Musk has often warned people not to bet against Tesla on the stock market. He went as far as predicting a “‘next level short burn of the century,” and it now looks like his prediction could be coming to reality.
However, recently, a famous short seller, Michael Burry has revealed that he’s short Tesla. Michael James Burry is an American investor, and hedge fund manager. He was the founder of the hedge fund Scion Capital, which he ran from 2000 until 2008. Burry was the first investor to recognize and profit from the impending subprime mortgage crisis of 2008.
There are a lot of investors who think Tesla stock is overvalued. JPMorgan analyst Ryan Brinkman recently wrote: “Tesla shares are now dramatically overvalued and investors thinking of raising their holdings in the company ahead of its impending addition to the S&P 500 Index should not”
Just to clarify how much TESLA is overvalued we can compare it to Toyota. Toyota sells roughly 30 times more cars compared to Tesla, and its revenue is more than 10 times larger than TESLA`s revenue, however, at the moment Toyota’s market capitalization is just $193 Billion which is almost 3 times smaller than TESLA’s, with a market capitalization of $567 Billion.
This might be good news for investors who believe that the stock price might be going down soon. The Last time, when Michael Burry has shorted stocks during 2008 he had made around $800 million for his investors. This kind of opportunities might not be available frequently. If Michael is correct this time as well short-sellers might benefit greatly. IT might have already started, price of TSLA has already gone down 6%!
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