Retreat or hibernate? After criticizing Tesla (TSLA.US) for being overvalued, the “big short” denied shorting

The Zhitong Finance App learned that Michael Burry (Michael Burry), the prototype character in the movie “The Big Short,” denied shorting Tesla (TSLA.US) shares, even though he had earlier this month called the company's “ridiculously high valuation.” In response to a user asking if he would short Tesla on social networking platform X, Bury said, “I'm not shorting (Tesla).”

This well-known hedge fund manager became a market legend for accurately predicting the 2008 US subprime mortgage crisis and using credit default swaps to drastically short subprime mortgage bonds. The bet brought him nearly $100 million in revenue and earned his investors between $700 million and $725 million. In the industry, Bury is known for his extreme reverse investments; he was able to endure a huge pullback and triumph years later.

After years of fading out of the public eye, Bury returned to the public eye in November of this year. He has warned many times before that there is an AI-driven bubble in US stock technology valuations. He disclosed short positions with Nvidia and Palantir, while accusing major AI spenders of misrepresenting the depreciation of their data center assets.

Bury pointed the finger at Tesla at the end of November and claimed in his column that Tesla's market value was “ridiculously overvalued,” and that this has been going on for quite some time. In the column, Barry not only clearly questioned Tesla's valuation, but also believed there was a problem with the company's shareholding structure and business strategy. He pointed out that if Musk's previous proposed $1 trillion compensation plan is implemented, it will further dilute Tesla's existing shareholders' equity and weaken the earnings value per share.

Bury also mentioned that Tesla's business focus has changed many times in recent years: from focusing on electric vehicle manufacturing in the early stages, to later betting on autonomous driving technology, to currently increasing research and development of humanoid robots, every strategic adjustment has been accompanied by fluctuations in market popularity, but it has never been able to escape the pressure of competitors to continue entering the market, implying that the company's core business moat is still unstable.

This isn't the first time that Bury has taken a bearish stance on Tesla. In 2021, he established a Tesla short position worth $530 million through his fund Scion Asset Management, but chose to close the position after only a few months. At the time, his external response stated that the operation was “only a short-term trading strategy and did not represent a long-term view.”

It is worth mentioning that since Tesla's stock price fell to a low point during the year in April due to consumer dissatisfaction caused by Musk's political actions and disputes, and increased competition in the electric vehicle market, due to weak delivery data and pressure on profits, the stock price has rebounded amazingly and reached a record high in December.

However, concerns persist about Tesla's high valuation and the downturn in the electric vehicle business. In terms of valuation, Tesla's current price-earnings ratio (TTM) is as high as 313 times, which is significantly higher than the other six companies in the US “Big Seven” (Apple, Microsoft, Google, Amazon, Nvidia, Meta, and Tesla). Among them, Apple's price-earnings ratio is about 37 times, Amazon's price-earnings ratio is about 33 times, and Microsoft's price-earnings ratio is about 35 times. Even Nvidia, which was previously shorted by Bury, had a price-earnings ratio of only about 46 times.

Meanwhile, with global electric vehicle sales growing, Tesla's basic electric vehicle sales performance continued to be sluggish this year, and may face a second consecutive year of decline in sales. Furthermore, Tesla recently published a summary of analysts' vehicle delivery estimates on its official website. Among them, the average forecast for the fourth quarter of 2025 is more pessimistic than the data compiled by the market. According to Tesla's own statistics, analysts on average expect the company to deliver 422,850 vehicles in the fourth quarter, down 15% from the same period last year. In contrast, the average estimate compiled by the market was 445,061 vehicles, a year-on-year decrease of 10%.