Michael Burry slams Tesla as “Ridiculously Overvalued” in new warning to investors

Core Viewpoint - Michael Burry, a notable short seller, has criticized Tesla for being "ridiculously overvalued," citing excessive stock-based compensation and potential dilution from Elon Musk's $1 trillion pay package [1][7][10]. Tesla Stock Dilution Concerns - Burry highlighted that Tesla dilutes its stock by approximately 3.6% annually and does not engage in stock buybacks to mitigate this dilution [1][7][10]. - He expressed skepticism about Tesla's shifting focus from electric vehicles to autonomous driving and now to robotics, suggesting that this pattern may continue as competition increases [2][13]. Market Reactions and Analyst Opinions - Despite Burry's criticisms, some Wall Street firms have become more optimistic about Tesla, with Melius Research labeling it a "must own" and Stifel raising its price target due to Tesla's strengths in full self-driving and robotaxis [6][13]. - Tesla shares have increased by 6.5% this year, which is significantly lower than the 21% rise in the Nasdaq-100 Index, indicating a stretched valuation as Tesla trades at nearly 200 times its expected profits for the next year [9][13]. Controversial Pay Package - Tesla is facing scrutiny over Musk's $1 trillion pay package, which is contingent on performance milestones, with Norway's sovereign wealth fund voting against it due to concerns about its size and risk [8][13]. - Analyst Tareck Horchani remarked that Tesla shares are priced as if they are part of an "AI or robotaxi moonshot," indicating that many factors must align quickly to justify the current valuation [8][13].