Tesla (TSLA) Stock: The Big Short Investor Just Bet Against Elon Musk

TLDR

• Michael Burry shorted Tesla stock, calling it “ridiculously overvalued” at nearly 200 times forward earnings
• Burry warns Tesla’s stock compensation dilutes shareholders by 3.6% annually with no buyback program
• Elon Musk’s proposed $1 trillion pay package could add 300 million new shares, increasing dilution concerns
• Tesla stock is trading at $428.59, stuck between $400 support and $440 resistance with fading momentum
• Tesla’s European sales fell sharply, with France registrations down 57.8% year-over-year in November

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Michael Burry has placed a bet against Tesla. The investor famous for predicting the 2008 housing crash disclosed his short position via his Substack platform, Cassandra Unchained.

Tesla, Inc., TSLA

Burry calls Tesla “ridiculously overvalued.” The stock currently trades at nearly 200 times projected earnings over the next 12 months. That valuation exceeds most tech companies and raises questions about whether the price matches reality.

The hedge fund manager points to specific numbers. Tesla’s stock-based compensation dilutes shareholders by approximately 3.6% each year. The company doesn’t buy back shares to offset this dilution.

Musk’s compensation plan adds another layer of concern. The proposed $1 trillion pay package could trigger the issuance of more than 300 million new shares. That would further dilute existing shareholders.

Burry previously shorted Nvidia on similar grounds. He’s building a track record of challenging tech stocks with high valuations and compensation-driven dilution. His latest move targets Tesla at a time when investors are already nervous about AI valuations.

Major Institutional Investors Voice Concerns

Norges Bank Investment Management voted against Musk’s pay package. The world’s largest sovereign wealth fund cited the plan’s size and dilution risks. Their opposition shows that criticism isn’t limited to short sellers anymore.

The Norwegian fund also noted concerns about Tesla’s dependence on Musk. That key-person risk adds uncertainty for long-term investors. When mainstream asset managers join critics like Burry, it suggests broader unease.

Tesla’s stock performance tells its own story. The shares are up just 6.5% this year. The Nasdaq-100 Index has rallied 21% over the same period. Tesla is badly lagging the broader tech market.

Technical Picture Shows Hesitation

Tesla stock closed at $428.59 on December 2. The price sits in a channel between $400 support and $440 resistance. Trading volume has declined from its October and November peaks.

The 50-day moving average is near $418. The 200-day average sits around $375. The stock remains in a medium-term uptrend but momentum is fading near the upper boundary.

The Relative Strength Index dropped to the mid-50s. That signals neither overbought nor oversold conditions. Traders are waiting for a clear breakout above $440 or a breakdown below $400.

A push above $440 could open a path toward $460 or $480. A drop below $400 might lead to a slide toward $375 or even $350. The next major move will likely define December’s trading pattern.

European sales data adds pressure. Tesla’s registrations in France fell 57.8% year-over-year in November. Only 1,591 units were registered. Year-to-date sales in France are down over 33%.

That decline outpaces the broader French auto market, which fell just 4.9%. Competition from BYD, Volkswagen, and Stellantis is eating into Tesla’s European market share.

Tareck Horchani of Maybank Securities says Tesla is “priced like an AI or robotaxi moonshot.” The market appears nervous about how stretched the valuation has become. A lot needs to go right very quickly to justify current prices.

Burry deregistered Scion Asset Management recently. That move suggests he wants to communicate directly with markets through his Substack. His public critique is helping shape the debate around tech valuations.

Market reaction on Monday was muted. The stock closed little changed and traded up about 1% on alternative platforms Tuesday morning in Singapore.

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