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'Big Short' investor Michael Burry says he is no longer short Tesla stock

Markets Insider
Markets Insider
 2021-10-18

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Michael Burry and Elon Musk.

Michael Burry's Scion Asset Management is no longer short Tesla stock via puts, according to a Friday report from CNBC.

Burry told CNBC by e-mail that the media had blown his Tesla short bet out of proportion and that it was just a trade.

"No, it was a trade," Burry told CNBC when asked if he was still short Tesla. "The options bets were extremely asymmetric, and the media was off by orders of magnitude."

At the end of the first quarter, Scion Asset Management revealed a 800,000 put position in Tesla worth $534 million at the time, according to a 13F filing. By the end of the second quarter, that position had ballooned to more than 1 million Tesla puts worth $731 million at the time.

A put option gives its holder the right to sell shares at a certain strike price set in the future. If the stock falls below the strike price before expiration, the value of the put will increase.

Shares of Tesla are up 24% year-to-date and recently reclaimed the $800 price level following a strong third-quarter delivery number from the electric vehicle manufacturer.

Tesla's rise in 2021 makes it less likely that Burry scored a profit on the put position, but the stock did experience a near-40% decline from its record high as growth stocks fell out of favor with investors amid a resurgence in cyclical stocks earlier this year.

Additionally, not knowing the strike price or expiration date of Burry's puts makes it impossible to gauge whether the position turned out to be profitable or not.

Burry has previously called Tesla's valuation of more than $800 billion "ridiculous" and told CEO Elon Musk over Twitter that he should raise more capital and sell stock to take advantage of such high prices.

Read the original article on Business Insider

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