Not all economists foresee a rosy future for electric cars and Tesla, in particular. For example, Dr. Michael J. Burry, a famous investor and a founder of hedge fund Scion Capital, made a large bet against Tesla.
Michael Burry has gained popularity due to his accurate forecasts. It was he who predicted the US mortgage crisis, which ballooned into the global financial catastrophe. What is more, he managed to make a fortune during the crisis. This time, the investor bought bearish put options on over 800,000 Tesla shares. It means that he is planning to make money when the stocks decline. He holds shares worth more than half a billion US dollars.
According to the declaration sent by Scion to the US Securities Exchange Commission (SEC), Michael Burry purchased the options on March 21, 2021. By the end of the first quarter, hedge fund Scion owned Tesla options on the sum of $534 million. “Tesla has depreciated 14% since the end of the first quarter, so these puts end up being profitable, although it’s impossible to know for sure,” said Steve Sosnik, chief strategist at Interactive Brokers LLC. He also noted that the yield depended on various facts. Notably, it is not the first time that Mr. Burry bet against Tesla. During the pandemic, the company’s shares surged by 700%, reaching the peak of $883.09 per share on January 26, 2021. Not so long before that, Mr. Burry advised Elon Musk to sell part of the company’s shares to attract additional capital. The founder of the hedge fund supposed that Tesla shares hit the sky-high price.
