Tesla’s (TSLA) market capitalization is “ridiculously overvalued,” the Big Short investor Michael Burry has said, adding that the EV maker’s CEO Elon Musk’s record $1T pay package would worsen shareholder dilution.
In his Substack newsletter, Burry estimated that Tesla (TSLA) dilutes its shareholders at around 3.6% per year as a result of employees’ stock-based compensation, with no buybacks to offset the impact.
“With recent news of Elon Musk’s $1T pay package, dilution is certain to continue,” Burry warned. “Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time.” To note, Tesla’s market cap is currently $1.35T.
Musk’s pay plan could give him at least tens of millions of additional Tesla (TSLA) shares, but is conditioned on the EV maker achieving certain targets.
Burry also criticized the shifting narrative around Tesla’s (TSLA) business. “As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots – until competition shows up.”
Burry had bet against Tesla (TSLA) back in 2021, when his hedge fund shorted about $530M of its stock before exiting the position a few months later.