May 19, 2022

One of the investors who became famous for predicting the epic collapse in the housing market in 2008, which was chronicled in the book and movie “The Big Short,” Michael Burry, has a new favorite stock to bet against Tesla.

As of the end of the first quarter, Scion Asset Management, Burry’s firm, revealed in a Securities and Exchange Commission filing on Monday that it held bearish put options on more than 800,000 Tesla (TSLA) shares, worth about $534 million.

Put options will give investors the right to sell a stock at a specified price. It is a sign that an investor has projected that the store will go down in the near future. No reason was given in the filing for why Burry thinks Tesla’s stock is due for a fall.

Shares of Tesla have taken a hit recently, plunging nearly 25% in the past month. The plunge was caused in part by concerns about CEO Elon Musk focusing more on bitcoin, dogecoin, and other cryptocurrencies instead of the company’s core electric vehicle market.

Musk recently became the guest host of “Saturday Night Live.” And on the side, he is running SpaceX as well. Needless to say, Musk is far too stretched with his attention, which worries some investors.

Burry bet against the housing bubble in the mid-2000s and profited from the eventual demise of the subprime lending market and many big financial firms in 2008. His prescient forecasts were detailed in the Michael Lewis book and subsequent movie, in which Burry was played by Oscar winner Christian Bale.

But Burry is not just looking to profit from stocks that he thinks are ripe for a fall. According to the SEC filing, Scion also holds call options, which give an investor the right to buy a stock at a specific price, on Google owner Alphabet (GOOGL), CVS (CVS), and Facebook (FB).