Tesla TSLA Bear Michael Burry AKA ‘The Big Short’ Got Squeezed

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A number of analysts who follow Tesla (NASDAQ: TSLA) have long begun to warn that a short bet on the manufacturer is very risky, as EVs will have a strong growth trajectory over the next decade. It seems that their appeal, in one way or another, was heard, as one of the most famous Tesla bears—Michael Burry—said that he no longer plays against the manufacturer.

Investor Michael Burry of the famous "The Big Short" said he was no longer playing against Tesla and that his position was only a trade, CNBC reported on Friday. “No, it was a trade,” Burry was quoted as saying in an email to CNBC when asked whether he was still shorting Tesla. “Media really inflated the value of these things. I was never short tens or hundreds of millions of any of these things through options, as was reported. The options bets were extremely asymmetric, and the media was off by orders of magnitude."

According to the 13F filing with the SEC in May, the fund managed by Burry has purchased puts against 800,100 Tesla shares, which have a notional equivalent value of $534 million. This marks not only Burry's largest position, but it also nearly equates to 40% of his total portfolio in nominal terms. However, the price of the puts in the money remains unknown, or how much Burry's hedge fund paid for the positions.

Options analysts said at that time it was possible the puts disclosed in the filing might be part of a larger trade that would curb losses if the put position went against the fund.

© 2021, Eva Fox | Tesmanian. All rights reserved.

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Eva Fox holds zero shares of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.