To The Moon

I am certain everyone would have known about Michael Burry’s latest short on $Tesla Motors(TSLA)$. The man made no attempt to hide. He blogged about it from his Substack newsletter - Cassandra Unchained, calling Tesla “ridiculously overvalued”. Then again, recent short activity is not Burry’s first and certainly would not be his last. Burry's history with shorting Tesla is a notable example of a value-investing thesis being early, and the differences between his past and current positions, highlight an evolving debate around TSLA's valuation. 2021 Short: 📅 In early 2020, Burry's hedge fund, Scion Asset Management, first disclosed a large-scale short position on Tesla using ‘put’ options, as shown in its May 2021 - 13F filing. The bet was reportedly worth over $530 million at the time (equivalent to 800,100 shares), and the true loss/gain would have depended on the strike prices and expiration dates of the options. Burry did not come out a winner on that short. By October 2021, Scion Asset Management has fully closed the position. Why It Bombed ? The short failed because TSLA's stock price continued its powerful rally: Driven by retail enthusiasm. TSLA inclusion in the $S&P 500(.SPX)$ index, resulted in a spike. Expanding market capitalization that shrugged off traditional valuation metrics. On hindsight, shorting a high-momentum stock like TSLA requires perfect timing and Burry's early bet was simply, overwhelmed by market's euphoria. 2025 Short: 🤔 Burry has renewed his short bet in late 2025. Key difference this time centred on (a) the refined bearish thesis and (b) context of US market: Thesis Shift to Dilution: Burry’s latest argument, detailed in his paid Substack newsletter, focuses heavily on the "tragic” algebra of stock-based compensation (SBC)." Back in 2021, Burry’s focus primarily on TSLA fundamental overvaluation of the auto business compared to competitors. This time though Burry’s focus on structural issues, arguing that: TSLA dilutes shareholders by about -3.6% per year without buybacks. Re-instatement of Musk's massive (up to $1 trillion) stock option package will ensure continued value destruction for current equity holders. Contextual Narrative: Burry explicitly mocks the shifting justifications for TSLA's valuation. The Elon cult was : All-in on EVs until competition showed up and better Tesla’s EVs. Then all-in on autonomous driving until competition showed up and superseded Tesla’s delayed rollout. Now is all-in on robots, until competition shows up. This suggests Burry’s short is targeting the narrative bubble supporting the stock. US Market Sentiments. Equally important, there is a marked difference in US market sentiments, comparatively speaking. In late 2025, there are more tangible signs of pressure, permeating US market. Near-term vehicle demand & profitability have become challenging, amidst (a) incentive removal, (b) slowing EV growth and (c) margin compression. TSLA’s valuation is still trading at an extremely high multiple, nearly 200x its expected next-year profits. This makes TSLA, highly susceptible to any fundamental weakness. Who Dares Win ? The likelihood of Burry "beating” Musk" (i.e., TSLA stock price falling significantly) remains a high-risk, high-reward proposition. Current landscape is arguably more favourable for a bear now than back in 2021. (1) Valuation & Fundamentals. TSLA trades at a massive premium, with its price-to-earnings ratio (P/E) still pricing in "massive success" in AI and autonomy. Investors will do well to know that TSLA has reported falling YoY net profit margin since Q4 2024. This works in Burry’s favour. With valuation is stretched, any fundamental disappointment (eg, slow robotaxi expansion rollout, continued margin pressure) could trigger a severe correction. (2) Brand Equity & Cult Status. TSLA, the brand remains a dominant force, and the "cult" around Musk continues to drive strong retail and institutional enthusiasm; despite its latest product Cybertruck, failed to launch. This has allowed TSLA to trade as an AI / Tech play rather than a traditional automaker. This works against Burry. This is because sentiment can defy fundamentals for long periods and Musk's ability to pivot the narrative (eg, to robots/AI) can sustain a high stock price. Musk has never allowed himself to be out of the limelight for extended period of time. He understands the theory behind “bad publicity is better than no publicity”. (3) Competition. Global competition in the EV space is intensifying, particularly from Chinese EV makers, placing a ceiling on Tesla's core auto growth. This works in Burry’s favour. BYD is already the world's top EV seller and keeps expanding into new countries. Thanks to past & present US government usings leverage to "protect" US car industry, including TSLA. This leverage includes tariffs on EVs, EV batteries, steel, aluminum, solar cells, and other critical minerals - driving up import costs for Chinese EVs. The government also cites national security concerns to justify potential bans or heavy regulations. Without these protections, TSLA sales in the US would have been massively eroded by Chinese EVs, that are technically far superior, even for TSLA. Technical Analysis. As of 02 Dec 2025 closing, TSLA is : Trading above its 20-day moving average (ma), signaling short-term bullish momentum, as price exceeds the average over recent trading days Slightly below its 50-day ma, indicating minor intermediate-term weakness or consolidation, with the stock down about -1.14% relative to that level. Strong outperformance against its 200-day ma (over +20%) indicating a sustained long-term uptrend. With 14-day Relative Strength Index (RSI) at 52.49, TSLA is neither overbought (above 70) nor oversold (below 30). In short, a Burry win could mean further pullback for Tesla in the short to medium term. Other than that, TSLA’s Q4 2025 earnings will determine its trajectory into 2026. Agree ? Remember to check out my other posts. (See below). Help to Repost ok, Thanks. Due to creative differences and bias, I will scale back my posting. My 2,430 ‘timeless’ posts remain available (for now) for those who value fundamentals as Mr Buffett had pointed — invest in businesses, not pick stocks. To new subscribers, no flashy screens to entice blind investing. I aim to share on how to fish, not fish for you. I’m grateful to share what I know. In the alternate moo moo universe, where I am valued & appreciated, I will still be sharing. Good luck on your i-journey. Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks. US Economic Reports - Fed's Focus Before FOMC ? NU : Bank Stock To Have and To Hold ! Goldman Says US Market Sell-Off Far From Over ? Do you think MIchael Burry’s concerns about Tesla are valid ’? Do you think TSLA’s stock price will undergo further pullback in December 2025 ? If you find this post interesting, give it wings! ️ Repost and share the insights ? Do consider “Follow me” and get firsthand read of my daily new post. Thank you. @Daily_Discussion @TigerPM @TigerStars @Tiger_SG @TigerEvents