Michael Burry is warning that Tesla is deeply overvalued, arguing that the electric carmaker’s heavy use of stock-based compensation is masking its true profitability. In a post to subscribers of his paid Substack, the “Big Short” investor said Tesla dilutes shareholders by about 3.6% annually and noted that the company conducts no buybacks to offset the effect.
He said the recent shareholder approval of Elon Musk’s $1 trillion compensation package guarantees even more dilution.
Burry pointed to Tesla’s $1.43 trillion market cap and said its valuation ignores the long-term destruction caused by issuing more shares.
Short seller Michael Burry says $TSLA is "ridiculously overvalued."https://t.co/A0crKPHX09 pic.twitter.com/E8yWBk6q7w
— Yahoo Finance (@YahooFinance) December 1, 2025
He also criticized tech giants like Palantir and Amazon for using stock-based compensation to inflate “adjusted” earnings that downplay real expenses.
Quoting Warren Buffett, Burry said treating stock grants as anything other than a cost is essentially a “gift from shareholders.”
His Substack, launched after deregistering Scion Asset Management, has focused heavily on what he sees as an emerging AI-driven market bubble.
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TIPP Staff
