Michael Burry, the investor famed from 'The Big Short,' criticized Tesla's valuation in a Substack post. He described the company's market capitalization as ridiculously overvalued and highlighted ongoing share dilution from Elon Musk's $1 trillion pay package. Burry also mocked shifting narratives among Tesla supporters amid rising competition.
Michael Burry, known for predicting the 2008 housing crisis and featured in the film 'The Big Short,' returned to public commentary after deregistering his hedge fund in November 2025 and launching his Substack, 'Cassandra Unchained.' In a post titled 'Foundations: The Tragic Algebra of Stock-Based Compensation' released late Sunday, December 1, 2025, Burry targeted Tesla alongside other tech firms like Nvidia and Palantir, where he holds bearish positions.
'Tesla's market capitalization is ridiculously overvalued today and has been for a good long time,' Burry wrote, noting the company's value at $1.38 trillion with shares trading at $427 as of Monday morning. He criticized stock-based compensation practices, arguing they dilute shareholders without offsets like buybacks. Tesla dilutes its shares by about 3.6% annually, compared to Amazon's 1.3% and Palantir's 4.6%. Burry warned that Musk's recently approved $1 trillion pay package, contingent on Tesla reaching an $8.5 trillion market cap over the next decade through milestones in robotaxis and humanoid robots, guarantees further dilution.
Burry also addressed Tesla's evolving investor narrative: 'The Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots—until competition shows up.' This echoes his 2021 short position on 800,100 Tesla shares, worth a notional $534 million at the time, which he later closed and described to CNBC as 'just a trade.'
Tesla shares trade at over 250 times earnings, far exceeding other automakers, and have risen 11% in 2025 despite a year-start dip linked to Dogecoin volatility. The company holds about 41% of the U.S. EV market as of August 2025, though this share has declined with increased competition from models by other automakers, as well as rivals like Waymo in autonomous driving and Unitree in robotics. Tesla did not immediately respond to requests for comment. Other skeptics, including Jim Chanos in 2023, have similarly called the stock overvalued, while Musk has repeatedly attacked short sellers, once labeling them 'jerks who want us to die.'
