Tesla becomes the next target of short-selling legend Michael Burry with a bet of half a billion USD

Michael Burry was one of the first investors to profit from the mortgage crisis. At the end of the first quarter, he had 800,100 put options on Tesla stock, or $534 million, according to an SEC filing.

Investors profit from put options contracts when the underlying stock falls in price. The filings show that, as of March 31, Burry owned 8,001 put options contracts, with undetermined value, exercise price or expiration date.

Burry, who owns Scion Asset Management, became famous for his bets on mortgage-backed securities before the 2008 crisis. He later became one of the main characters of the book and series. Oscar-winning film “The Big Short”.

Earlier, Burry said in a tweet that Tesla’s reliance on regulatory credits to generate profits was a threat. However, this content was later removed. As more and more companies make their own battery-powered vehicles, it’s clear that demand for Tesla’s zero-emissions certification will diminish.

Besides the “Big Short” with Tesla, Burry also made a large amount of money from a long bet on GameStop stock recently, when the Reddit investor group made “short” rounds. squeeze) caused hedge funds to wobble.

In trading session on May 17, Tesla shares fell more than 4%. In 2021, Tesla shares are down nearly 20%, after rising as much as 740% in 2020. Tesla has seen a tumultuous 2021 as car sales in China drop in April and shortages spare parts has caused production difficulties both in the US and China.

In the first quarter, Tesla’s revenue from the sale of zero-emissions certification was $518 million. In the fourth quarter of 2020, Tesla recorded a net profit of $ 270 million also thanks to selling this certification to other automakers.

Previously, Tesla made $1.6 billion selling regulated energy credits, mostly zero-emission vehicle certifications. This sector has helped Elon Musk’s company report profits for more than four consecutive quarters, qualifying for inclusion in the S&P 500.

Currently, Tesla has had to delay production and release updates of its high-end sedans and SUVs, the Model S and X. In addition, the company has also delayed commercial production of the kits. electric batteries for use in future vehicles, including Cybertruck and Tesla Semi.

Meanwhile, the company is also facing scrutiny in the US and China as the recent accidents receive negative public comments, along with investigations by the national security agency. vehicles in both countries.