Michael Burry calls Tesla 'ridiculously overvalued' and knocks tech industry for a widely used practice

Core Viewpoint - Michael Burry critiques Tesla's valuation, arguing that the company's stock-based compensation practices inflate its earnings results and lead to an overvaluation of its market capitalization [2][3]. Group 1: Valuation Concerns - Burry asserts that Tesla's market capitalization is excessively high and has been for an extended period [2]. - He emphasizes that when accounting for stock-based compensation, Tesla's true profits are lower, suggesting a need for a reevaluation of its valuation [2]. Group 2: Shareholder Dilution - Tesla dilutes its shareholders at a rate of 3.6% annually and does not engage in share buybacks, which negatively impacts shareholder value over time [3]. - The approval of Elon Musk's $1 trillion compensation plan, with 75% support from voting shares, indicates that further dilution is expected, worsening the situation for existing shareholders [3][4].