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- Michael Burry said Elon Musk is selling Tesla stock to profit from its surge, not to raise cash.
- "The Big Short" investor noted that Musk has raked in cash and cut his tax bill in recent months.
- Burry disclosed that he's never shorted crypto, and warned this is the biggest bubble of his career.
Elon Musk isn't selling Tesla stock because he's short of cash; he just wants to capitalize on the automaker's eye-watering valuation, Michael Burry tweeted on Sunday.
"Let's face it. @elonmusk borrowed against 88.3 million shares, sold all his mansions, moved to Texas, and is asking @BernieSanders whether he should sell more stock. He doesn't need cash. He just wants to sell $TSLA," Burry said.
The investor of "The Big Short" fame noted last week that Musk has taken out personal loans against his stock, and suggested the Tesla CEO might be selling shares to service those debts. Musk recently committed to selling 10% of his Tesla stock based on the results of a Twitter poll, and promptly cashed in nearly $7 billion worth of shares last week.
Burry's tweet highlights that Musk cut his tax bill by moving from California to Texas last year, sold most of his $100 million real estate portfolio, and told Sen. Bernie Sanders on Sunday that he would sell more stock at the lawmaker's request. The investor's view is that Musk doesn't need cash, but wants to profit from Tesla's stock price rising nearly 12-fold since the start of last year.
Tesla and Scion didn't immediately respond to requests for comment from Insider.
In a follow-up tweet on Sunday, the Scion Asset Management boss pointed to Tesla's stock chart, and the fact that Musk tweeted the stock price was "too high" when the electric-vehicle company's valuation was less than one-fifth of its current level. "Just think about it," he said.
It's worth noting that Burry declared he was short Tesla in December 2020, and Scion held bearish put options on the stock as recently as June 30 this year. The investor told CNBC last month that he was no longer betting against Musk's company, but that may have changed now, especially as the 15% slump in Tesla's stock price last week was partly blamed on an Insider report highlighting Burry's theory about Musk's stock sales.
Burry has repeatedly singled out Tesla as emblematic of a massive asset bubble. He called its stock price "ridiculous" in December 2020, predicted at the start of this year that the shares would collapse like the mid-2000s housing market, and suggested the stock could plummet 90% like Amazon and other high-flying tech stocks did when the dot-com bubble burst.
Crypto, bubbles, and bonds
Burry said he knows better than to bet against the cryptocurrency boom, warned that assets are more overvalued today than during the dot-com or housing bubbles, and hinted he's betting against long-dated government bonds in a now-deleted tweet on Sunday.
"FWIW I've never shorted any cryptocurrency," he said. "This is my third bubble, and the biggest. I've learned a thing or two. 30 year Treasuries on the other hand…"
Burry jokingly asked how to short crypto in a tweet in October, and later told CNBC that the asset class is in a bubble. However, he added that he sees value in blockchain and non-fungible tokens (NFTs), and has even dabbled in crypto by purchasing a few tokens.
The Scion chief's tweet suggests he may have taken a short position against 30-year Treasuries, likely because he expects soaring inflation to force the Federal Reserve to hike interest rates, driving down bond prices.