Photo: Tesla
Remember the late 2000s? Teams other than the Patriots were winning Super Bowls, Taylor Swift wasn’t quite “Taylor Swift” yet, and subprime mortgages were about to cause the real estate bubble to burst, which is where American investor Michael Burry comes in.
Burry was among the very few who anticipated what was about to happen with those mortgages and convinced Goldman Sachs, as well as other investment firms, to sell him credit default swaps against those subprime deals, which he deemed vulnerable. To say that he was right would be an understatement.
Despite not having all his investors on board with this strategy, he still made them more than $700 million in profit, to go with a personal profit of $100 million for himself. Since then, he’s been investing heavily in water, gold and farmland, as well as major companies such as Alphabet Inc and Facebook.
It’s also been reported that he took in short positions on Tesla roughly a year ago, while predicting that the carmaker's stock would eventually collapse just like the housing bubble. Some reports have him holding 'puts' on over 800,000 Tesla shares. By the way, a ‘put’ or ‘put option’ is a financial instrument that gives the holder the right to sell an asset at a specified price or time. Usually, to purchase a put option means basically betting against the underlying stock.
Well, now it seems that Burry is singing a slightly different tune, as per Reuters.
“No, it was a trade,” he was quoted as saying in an email to CNBC last week, 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.”
Does this mean he’s changed his mind about Tesla stock collapsing in the future? Not necessarily, but he’s not being all that “bearish” about it either.
I'm no Michael Burry, but if you ask me, one thing that might eventually impact Tesla stock is other carmakers catching up to them in terms of technology and overall sales. It’s somewhat of an inevitability.
Despite not having all his investors on board with this strategy, he still made them more than $700 million in profit, to go with a personal profit of $100 million for himself. Since then, he’s been investing heavily in water, gold and farmland, as well as major companies such as Alphabet Inc and Facebook.
It’s also been reported that he took in short positions on Tesla roughly a year ago, while predicting that the carmaker's stock would eventually collapse just like the housing bubble. Some reports have him holding 'puts' on over 800,000 Tesla shares. By the way, a ‘put’ or ‘put option’ is a financial instrument that gives the holder the right to sell an asset at a specified price or time. Usually, to purchase a put option means basically betting against the underlying stock.
Well, now it seems that Burry is singing a slightly different tune, as per Reuters.
“No, it was a trade,” he was quoted as saying in an email to CNBC last week, 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.”
Does this mean he’s changed his mind about Tesla stock collapsing in the future? Not necessarily, but he’s not being all that “bearish” about it either.
I'm no Michael Burry, but if you ask me, one thing that might eventually impact Tesla stock is other carmakers catching up to them in terms of technology and overall sales. It’s somewhat of an inevitability.
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