<body><div><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=18QgQL_170XKP4500" alt="https://img.particlenews.com/image.php?url=18QgQL_170XKP4500" width="1920" height="1080" ><ul><li>"The Big Short" investor Michael Burry questioned Tesla's valuation in a weekend blog post.</li><li>The post is critical of Tesla and the technology industry as a whole for its use of stock-based compensation and then ignoring it as a legitimate expense.</li><li>Burry said Tesla share dilution should continue following shareholder approval of CEO Elon Musk's historic pay package.</li></ul>The investor argues that when accounting for the true profits that include the cost of this compensation and its negative dilution of the company's value over time, companies like Tesla should have lower valuations."Tesla's market capitalization is ridiculously overvalued today and has been for a good long time," Burry, who rose to fame for his call on a housing market bubble in the 2000s, wrote to subscribers of his new paid Substack.Burry pointed out that Tesla dilutes shareholders at a rate of 3.6% each year and doesn't offer buybacks. He posted a chart with subscribers that he said "shows the kind of present value destruction that this level of dilution can impart."He said the vote to accept CEO Elon Musk's $1 trillion compensation plan means investors should expect to get diluted further — meaning that that these additional shares water down their ownership of the company. The package had 75% approval among voting shares, despite proxy advisors Glass Lewis and ISS coming out against it."With recent news of Elon Musk's $1 trillion dollar pay package, dilution is certain to continue," Burry wrote.The newsletter post goes into an in-depth explanation of how stock-based compensation is not accurately reflected under Generally Accepted Accounting Principles (GAAP) and how companies used "adjusted" earnings to present a bottom line that wrongly ignores the practice as a real expense.Burry quotes Warren Buffett's view of stock-based compensation being treated as something other than a tangible expense: "What else could it be — a gift from shareholders?" wrote Buffett in his Berkshire Hathaway 2018 annual letter.Burry launched his Substack called "Cassandra Unchained" late last month after deregistering hedge fund Scion Asset Management. The blog, which has a $379 annual subscription fee, has so far focused on why he believes artificial intelligence is a bubble.</div></body>

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"The Big Short" investor Michael Burry questioned Tesla's valuation in a weekend blog post. The post is critical of Tesla and the technology industry as a whole for its use of stock-based compensation and then ignoring it as a legitimate expense. Burry said Tesla share dilution should continue following shareholder...

Michael Burry calls Tesla 'ridiculously overvalued' and knocks tech industry for a widely used practice

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"The Big Short" investor Michael Burry questioned Tesla's valuation in a weekend blog post. The post is critical of Tesla and the technology industry as a 

Michael Burry calls Tesla 'ridiculously overvalued' and knocks tech industry for a widely used practice

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