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Michael Burry From ‘The Big Short’ Has Made A $530 Million Bet Against Tesla

by : Niamh Shackleton on : 18 May 2021 11:39
Michael Burry From 'The Big Short' Has Made A $530 Million Bet Against TeslaPA Images

Michael Burry, the famed investor depicted in The Big Short, has made a ginormous bet against Tesla.

Burry made it big in the mid-2000s following the subprime mortgage crisis that he predicted would happen, as demonstrated in 2015’s The Big Short starring the likes of Brad Pitt, Steve Carrell and Ryan Gosling.

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Now, Burry is going against the grain once again and has bet a staggering $530 million against Elon’s Musk’s Tesla company – made up of 800,100 long puts against the electric car manufacturer.

Michael Burry (PA Images)PA Images

What on earth is a long put, I hear you ask? Investopedia defines it: ‘A long put refers to buying a put option, typically in anticipation of a decline in the underlying asset… A long put has a strike price, which is the price at which the put buyer has the right to sell the underlying asset’. For example, if someone buys stock at the strike price of $50, this can still be later sold for that price even if the stock’s price drops to $20.

However, it can come back to bite a person if their predictions don’t come true because, if they want to sell their stock but it’s value goes up to $60, they’ll still only be able to sell it for $50.

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This means Burry will make a hell of a lot of money out of Tesla’s demise, if it happens.

Burry was said to have owned the mass amount of puts against Tesla as of March 31, CNBC reports. However the value, strike price and expiry remain unknown.

Elon Musk on Saturday Night Live (PA Images)PA Images

Last week, Musk’s net worth nosedived by $20 billion after Tesla stocks dropped by 15%, so arguably Burry could be on to something. The fall in Tesla’s stock price came after Musk’s debut on Saturday Night Live.

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As of yesterday, May 17, the electric car company’s stock had fallen a further 4%, according to CNBC.

Burry has previously expressed his concerns surrounding the so-called Tesla boom, and even went as far as comparing it to the subprime mortgage crisis he cashed in on and the late 1990s’ dot-com bubble.

He tweeted in February, as per Markets Insider:

In the SF Bay Area, $TSLA vehicles are everywhere. Everyone I know owns 1+, though some have gone back to ICE. I’ve talked to industry players, down to the mechanics. Remarkably similar to 1999 and 2006.

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In a follow-up tweet he boasted that his Big Short had gotten ‘bigger and Bigger and BIGGER’ and warned people to enjoy Tesla’s success ‘while it lasts’.

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Niamh Shackleton

Niamh Shackleton is a pint sized person and journalist at UNILAD. After studying Multimedia Journalism at the University of Salford, she did a year at Caters News Agency as a features writer in Birmingham before deciding that Manchester is (arguably) one of the best places in the world, and therefore moved back up north. She's also UNILAD's unofficial crazy animal lady.

Topics: News, Elon Musk, finance, Now, stock market, Technology, Tesla, US News

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CNBC and 1 other
  1. CNBC

    Michael Burry of ‘The Big Short’ reveals a $530 million bet against Tesla

  2. Markets Insider

    'Big Short' investor Michael Burry says the Tesla boom is 'remarkably similar' to the dot-com and housing bubbles