"The Big Short investor who predicted the 2008 housing market crash said EV maker Tesla is "ridiculously overvalued" and warned Musk's $1 trillion pay plan will only make it worse. Michael Burry, who last month deregistered his hedge fund Scion Asset Management, took to a newly launched Substack account to reveal a bet against Elon Musk's Tesla. "Tesla's market capitalization is ridiculously overvalued today and has been for a good long time," he wrote in a post."
"Burry said Tesla dilutes its shareholders at an estimated rate of 3.6% per year thanks to the stock-based compensation it awards employees without buybacks to offset the impact. CEO Musk's gargantuan compensation would make matters worse, he added. The 2025 pay plan, overwhelmingly approved by shareholders last month, could give Musk at least tens of millions of additional Tesla shares that could further dilute existing shareholders' holdings."
Tesla's market capitalization is described as ridiculously overvalued and has remained elevated for an extended period. Shareholder dilution occurs at an estimated 3.6% annually due to stock-based compensation granted to employees without offsetting buybacks. The 2025 compensation plan could award Elon Musk tens to hundreds of millions of additional shares, potentially increasing his stake from 15% to as much as 29% if ambitious targets are met. Achievement of some of the plan's more attainable goals may benefit Musk disproportionately relative to other shareholders. Tesla's stock traded near $426, with a modest intraday decline but positive year-to-date performance amid earlier volatility. Superfan priorities have shifted across electric cars, autonomous driving, and robots as competition emerged.
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