MICHAEL BURRY – CASE STUDY

Introduction:-

Michael James Burry is an American investor, hedge fund manager, and physician. He founded the hedge fund Scion Capital, which he ran from 2000 until 2008, before closing the firm to focus on his own personal investments.

Burry is best renowned for being the primary capitalist to foresee and benefit from the subprime mortgage crisis that occurred between 2007 and 2010.

Burry very rarely predicts trades but when he does he’s always right.

We all know him from the 2007 mortgage bond market and just like that he is now shorting on tesla.

Burry On Tesla:-

  • Famed investor Michael Burry recently revealed in a regulatory filing a short position against Tesla worth more than half a billion.
  • Michael Burry is long put against 800,100 shares of Tesla or $534 million by the end of the first quarter, according to a filing with the U.S. Securities and Exchange Commission.
  • Investors profit from puts when the underlying securities fall in prices. As of March 31, Burry owned 8,001 put contracts, with unknown value, strike price, or expiry, according to the filing.
  • In February, he tweeted “my last Big Short got bigger and bigger and BIGGER,” referring to Tesla’s surge in market capitalization. “Enjoy it while it lasts,” he said.

Shorting On Tesla:-

  • Burry previously mentioned in a tweet, which he later deleted, that Tesla’s reliance on regulatory credits to generate profits is a red flag, CNBC reported.
  • Besides his “Big Short,” Burry made a killing from a long GameStop position recently as the Reddit favorite made Wall Street history with its massive short squeeze
  • Earlier in December, Michael Burry, on Twitter had said that Tesla’s reliance on regulatory credits to generate profit was a red flag, CNBC reported. Tesla only generates profits at present by selling tax credits to other auto manufacturers. However, this could change as more and more car manufacturers come up with their electric cars and competition increases for Tesla.
  • Burry had back then said that Tesla stock price was “ridiculous”.

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