The Big Short's Michael Burry just bet $530m against Tesla

The family office run by “Big Short” investor Michael Burry has disclosed a short position against Tesla Inc worth more than half a billion.

Scion Asset Management said in a regulatory filing on Monday that it had bearish put options on 800,100 shares in Tesla as of the end of the first quarter that were worth $534mn (roughly R7.5bn).

Put options give investors the right to sell shares at certain price in the future.

One of the investors profiled in the book “The Big Short' and the film of the same name for betting more than a billion dollars against the US housing bubble, Burry has been sceptical of Tesla's sky-high valuations.

In February, he tweeted “my last Big Short got bigger and Bigger and BIGGER”, referring to Tesla's surge in market capitalisation. “Enjoy it while it lasts,” he said.

Powered by strong sales and its first annual profit, Tesla shares jumped more than eight times last year and hit a record high of $883 per share (roughly R12,390) in January. But they have since fallen as hedge fund managers raise concerns that it is overvalued.

The shares closed at $576 per share (roughly R8,082) on Monday, valuing the electric car maker at around $555bn (roughly R7.8 trillion).

Burry also said last year that the green regulatory credits which Tesla has relied on to generate profits will dwindle as Fiat Chrysler increases sales.

Stellantis, formed through the merger of Italy's FCA and France's PSA, said this month it expects to achieve its European carbon dioxide emissions targets this year without environmental credits bought from Tesla.

Scion, which does not hold external capital, also lifted its exposure to energy last quarter, adding 530,000 shares in Golden Ocean Group, 323,823 shares in SunCoke Energy and 225,000 shares in Occidental Petroleum.