Popular investor Michael Burry took another shot at Tesla (TSLA) by calling the EV company “ridiculously overvalued” in a new Substack post. Burry, who is famous for predicting the 2008 housing crash, argued that Tesla’s heavy use of stock-based compensation is a major red flag. More specifically, he said that Tesla dilutes its shares by 3.6% each year and warned that Elon Musk’s recently approved $1 trillion pay package will dilute shareholders even further.
TipRanks Cyber Monday Sale
- Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
Burry also criticized what he sees as Tesla’s shifting priorities as competition increases. Indeed, he wrote that Tesla supporters were fully focused on electric cars until other automakers caught up. Then, they focused on autonomous driving until new rivals emerged. As a result, they are now promoting robots, at least until more competition appears. But even as Burry warns about Tesla’s valuation, many analysts are growing more optimistic.
For instance, firms like Melius Research have called Tesla a “must own” because of its progress in autonomy and chipmaking. Separately, Stifel raised its price target due to momentum in Tesla’s full self-driving technology and upcoming robotaxi service. Nevertheless, Burry’s negative tone on Tesla comes after he recently placed large short bets against Nvidia (NVDA) and Palantir (PLTR) through put options. He also deregistered his hedge fund, Scion Capital, and now shares his market views mainly through Substack posts.
What Is the Prediction for TSLA Stock?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 11 Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $383.04 per share implies 10.4% downside risk.
