Michael Burry, who made $800 million shorting the housing bubble in 2008 (famously documented in the book and film, "The Big Short"), recently made perhaps up to $270 million going long GameStop. I don't know much about Burry's long-term track record but he seems to be an astute contrarian investor with a knack for being in culturally important financial events.
So, it's interesting that he's shorting Tesla...and warning about the #gamification of investing due to apps like Robinhood. Burry believes:
- Tesla shares could fall 90% without crashing the financial system--for perspective, that means Tesla's share price would go back to what it was...a year ago. Yup, that's how crazy the rally has been.
- That such a drop would be good for the market because it would temper the speculative behavior of retail investors, who are being had by Wall Street via investing apps (click to enlarge):
It'll be interesting...Tesla is a cult as much as a car company. In the past, we've marveled at how despite producing only a tiny fraction of the cars as other major automakers its market cap is larger than most of them combined. And many a hedge fund manager has been burned shorting Tesla...So, Burry may get a get a pair of comfy satin shorts for his efforts. We shall see...
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