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

[TruckElectric]

Michael Burry.
Jim Spellman / Getty Images

• Michael Burry compared the Tesla boom to the dot-com and housing bubbles.
• The "Big Short" investor said he'd spoken to mechanics, dealers, and other Tesla experts.
• Burry is short Elon Musk's electric-vehicle company and is a frequent critic.

The hype around Tesla reminds Michael Burry of the dot-com bubble in the late 1990s and the housing bubble of the mid-2000s, he said in a tweet on Monday.

"In the SF Bay Area, $TSLA vehicles are everywhere," the investor said in a tweet that has since been deleted.

"Everyone I know owns 1+, though some have gone back to ICE," he said, referring to the internal combustion engines of conventional cars.

"I've talked to industry players, down to the mechanics," he continued. "Remarkably similar to 1999 and 2006."

Burry's billion-dollar bet on a US housing-market crash was immortalized in the book and movie "The Big Short."

The Scion Asset Management boss, who has been a vocal critic of Tesla for several months, revealed in December that he was short Elon Musk's electric-vehicle company.

"I live in the land of $TSLA," Burry said in another tweet on Monday. "I know what a Tesla car is. I talk to the mechanics and dealers. But being short is so much more than that."

Tesla's stock price has rocketed more than 800% since the start of 2020, lifting its market capitalization to north of $780 billion.

Burry also tweeted last month that the striking rally was similar to past bubbles in internet stocks and housing.

Of the idea that Tesla's lofty stock price is self-fulfilling because the business can issue shares to fund its growth, Burry said, "Saw this same thesis many times while partying in 1999."

"My last Big Short got bigger and Bigger and BIGGER too," he said in another tweet. "Enjoy it while it lasts."

The Scion chief has slammed Tesla's sky-high valuation, paltry sales, minimal profits, and massive market capitalization relative to other automakers.

Burry has also described the company's battery technology as "inferior" and flagged reports of its cars catching fire.

"What do $TSLA, $BTC, option gamma traders have in common? Rhymes with Rubble," he tweeted in November.

Tesla didn't immediately respond to a request for comment from Insider.


SOURCE: Business Insider

 

[Crissa]

Why do people write articles about these guys?

Yes, there's a bubble. No, no one knows when it will pop. No, it's nothing like the bubbles he's mentioning, and I noticed the article doesn't bother to look into his statements.

ugh.

-Crissa

 

[VI Tesla]

Why do people write articles about these guys?

Yes, there's a bubble. No, no one knows when it will pop. No, it's nothing like the bubbles he's mentioning, and I noticed the article doesn't bother to look into his statements.

ugh.

-Crissa

Agreed,

How does the housing boom/dot com bubble change the world for the better?

 

[LoPro]

Agreed,

How does the housing boom/dot com bubble change the world for the better?

I have no idea what the value should be, but the valuation can’t be compared to the old car manufacturers as Tesla’s price also includes bold visions, proven ability to execute, and balls. And synergy with a spaceship company for f-s sake.

Balls and rockets!

Disclaimer: This (obviously) does not constitute financial advice ?

 

[showmemo]

There were lots of shorts that died at the 'valuation alter' when looking at Amazon, too. Disrupting companies can't be compared to standard companies..

This statement also sounds a bit desperate since anyone looking at the technology sees Tesla as years ahead of it's competition.

'Burry has also described the company's battery technology as "inferior" and flagged reports of its cars catching fire.'

 

[Crissa]

How does the housing boom/dot com bubble change the world for the better?

Oh! Lots of ways. We wouldn't have had so many online resources for the pandemic without it.

The current bubble is mostly different because it is entirely in the market - the companies underlying the bubble are not using ipos and stock sales to pay for their operations. Many of the failing dot-com companies not only didn't have funding independent of their stock price, they had no way of making revenue. Look at Uber's shedding of divisions during 2020 and shredding competing units, like literally destroying most of the rental bicycles in the US. That's like the dot-com bubble.

But Tesla, Arcimoto, Lucid... they all have real products with real budgets and revenue and without the stock could stand on their own.

'Burry has also described the company's battery technology as "inferior" and flagged reports of its cars catching fire.'

Exactly! The article didn't even ask him to support these vapid assertions.

I'm not even defending Tesla here: Empty assertions make for bad journalism. This is a bad article and a bad investor, and this journalist should be ashamed for being paid to write this article.

-Crissa