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Genius Behind "The Big Short" Reveals Massive Bet Against Tesla

By Eric Volkman - May 17, 2021 at 7:56PM

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Michael Burry's put options totaled almost $535 million at the end of March.

Michael Burry, who famously profited from a contrarian bet against mortgage securities ahead of the financial crisis in the late 2000s, is attempting to do the same with Tesla Motors (TSLA 4.67%) stock. According to a regulatory filing cited in various media, Burry held put contracts for 800,100 shares of the company as of March 31. The market value of those 800,100 shares was just under $535 million at the time.

A put is the right to sell shares of a company's stock at a particular level called the strike price, by a specific date. The regulatory filing did not reveal the stock price set in Burry's puts, nor their expiration date.

A stock market trading graph.

Image source: Getty Images.

Burry is one of the central figures in the 2010 book The Big Short: Inside the Doomsday Machine by Michael Lewis, and the 2015 film The Big Short that was made from it.

He is one of the few investors who bet against mortgage securities before they helped trigger the financial crisis of the late 2000s. Mortgage securities were wildly popular prior to that collapse, and it was highly unusual for any major investor to be bearish about them.

Burry has not publicly commented on his Tesla puts.

Although Tesla continues to be a hot stock for many investors, the company has had its share of setbacks. Among numerous other negatives, one of its cars -- perhaps powered by its autopilot feature -- was recently in a crash that produced a fatality, and an upcoming company gigafactory in Germany will open later than originally planned.

Perhaps the revelation of Burry's move is giving Tesla bulls some pause to think. The company's stock fell by 2.2% on Monday, a steeper decline than the S&P 500's 0.3%.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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