Why has Michael Burry taken a $534 Million short bet against Tesla?

While the future of EV is incredibly promising, the reality is that it isn’t reflective of the present. TSLA’s 209x P/E reflects that the value being chased by current prices (Tesla’s potential) is way into the future.

I reckon Burry’s short thesis on TSLA isn’t actually company-specific. It’s a macro play like most of his portfolio.

Should inflation not be transitory and a rate hike be on the Fed’s mind or COVID-fueled supply chain disruptions keep plaguing the emerging markets, an excessively hyped growth stock like Tesla would be among the hardest hit.

It’s the same reason Burry shorted the CDOs pre-2008. He could have shorted the S&P, but it’s more profitable (and less risky) to short the thing that has the most room to fall!

This perspective also explains his $330M worth calls on GOOG and FB - firms with billions in real-time ad rev - good inflation hedges as a global rise in prices cascades down to ad expenditure.