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Michael Burry on Tesla Stock

Valuation skeptic (strong) Position evolved

TL;DR

Michael Burry believes Tesla stock is ridiculously overvalued but has confirmed he does not currently hold a short position against it.

Key Points

  • He views Tesla's market capitalization per vehicle delivered as vastly inflated compared to established rivals like GM and Ford.

  • His analysis highlights continuous shareholder dilution, estimating an annual dilution rate of approximately 3.6% due to stock-based compensation without offsetting buybacks.

  • In late 2025, he explicitly stated via social media that he was not shorting Tesla stock, despite his deep concerns about its valuation.

  • He criticized the multi-trillion dollar performance-based pay package approved for the CEO as contributing to further dilution.

Summary

Michael Burry has consistently voiced strong bearish sentiment regarding Tesla, frequently labeling the electric vehicle maker as "ridiculously overvalued" based on traditional financial metrics. His core skepticism centers on the belief that the stock price has decoupled from actual automotive and technology fundamentals, citing extremely high valuation multiples compared to legacy automakers.

However, the investor clarified a critical divergence between his opinion and his current trading action, stating in late 2025 that he did not hold a short position in Tesla stock at that time. A key supporting argument for his negative view is the company's history of significant shareholder dilution, primarily through stock-based compensation, without employing share buybacks to offset this effect, which he views as a stealth tax on existing owners. This recent lack of a formal short position, despite the strong negative critique, suggests he views the timing of a trade against the stock's powerful momentum as too risky.

Key Quotes

“ridiculously overvalued.”

"Tesla's market capitalization is ridiculously overvalued today and has been for a good long time,"

Frequently Asked Questions

Michael Burry's position is strongly negative regarding the stock's valuation, which he calls 'ridiculously overvalued.' However, he confirmed that he is not currently holding a formal short position against Tesla as of late 2025.

The investor focuses on metrics like market cap per vehicle, which he finds astronomical compared to competitors, and persistent shareholder dilution from stock compensation. He believes the stock price is sustained more by speculation than by sound operational fundamentals.

While he has been a vocal critic and has pointed out bearish factors for years, he explicitly stated in late 2025 that he was not shorting the stock at that time. His public commentary often precedes or follows changes in his actual trading positions.