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Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

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Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#151

Post by pvarangot »

eaenki wrote: post #53
ve55 wrote: post #9

As options can grant the buyer significant leverage with each option representing 100 shares, the sum they came up with for the article title is likely a misrepresentation, and if the bet goes wrong notably less money will probably be lost. Either way I don't think articles of this nature are particularly useful however.

So how would you go about making an educated reverse engineering claim on the stake at risk without knowing his other legs nor expiry dates? Is it even possible? How about a wide range?

I don't think it's possible. He's also not saying if he's actively managing his puts. He may be actively rolling the date or the price to cash in on red days and re-buy on green days. There's many ways to make a big short bet on a volatile stock pay for itself with day trading until it's no longer a bet and just a free lottery ticket.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#152

Post by mirekrusin »

He plays classic, shorting overpriced, buying under-priced by raw books. You can get surprise on reality benders like Steve Jobs, Elon Musk or bitcoin.

Betting against Elom Musk seems like betting from first principles against first principles guy. Popcorn and watch.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#153

Post by HWR_14 »

Havoc wrote: post #8

>Michael Burry is long puts ....so short?

I mean, you can also say he has Tesla investments. Long puts are a type of short position which is a kind of Tesla position. However, since it is far more specific it conveys far more information.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#154

Post by seem_2211 »

fullshark wrote: post #136
rubyn00bie wrote: post #98

Earlier quoted context omitted.

I'm not one to typically paraphrase billionaires, or think they're too connected to reality... but something I heard Mark Cuban say the other day was kind of "oh, shit that's true" moment for me. It was something to the affect of (I can't find the clip at the moment), "Back in 2010 we never thought we'd see a company hit $1 trillion. We never thought Apple or Amazon (et. al) would be able to continue their growth yea…

> I'd be more skeptical but EVs are eventually going to cost way less to make than typical ICE (internal combustion engine) cars, and per unit that savings translates into a lot of fucking profit. What's the basis for this? Battery tech evolution and ICE cars have no more (safe) optimizations to make to get costs down?

This is also predicated on the idea that every part of Tesla's operations are substantially better than existing automakers.

Do people really believe that Tesla is literally run 10x better than Toyota, Volkswagen, Daimler, BMW or Honda? I don't think so.

Then there's the nightmare of trying to appeal to two wildly different consumer groups.

At the low end: does Tesla have a meaningful reliability advantage versus Honda and Toyota? From what I have seen, it appears not. This matters less when you're dealing with premium buyers, but will not work with the mass market. Fans will put up with hassle (I own an AMG... I'm more than aware of the extra expense I am constantly paying for - and that's a trade-off I'm happy to make in return for a powerful v8).

Secondly from a clout point of view: why would anyone buy a Tesla over a comparatively priced Audi, Porsche, Mercedes or BMW. The people who talk about their Model 3 with a burning passion aren't trading in a 911, or an E Class or a Q7. They're excited to upgrade from a 2015 Camry. Massive expectation gap.

Plus, all of these companies are valued far more realistically. Tesla being worth more than every other automaker or whatever gives them very little room to breathe. If Tesla is ever valued as the hardware manufacturer with relatively low margins (when compared to say a tech stock like Facebook or Salesforce).. is the day that we will see an enormous valuation haircut.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#155

Post by clomond »

notJim wrote: post #131
clomond wrote: post #114

Earlier quoted context omitted.

While I won't dispute that Tesla's share price is high given where the company is at right now when valued as an auto business, there are a few things I think are worth mentioning and commenting on in your post. > Building an electric car is not that hard, especially if Tesla already did all the hard lifting for you. This couldn't be further from the truth. While making a prototype EV is relatively easy, yes. EV indu…

I don't follow this very closely, but hasn't Volkswagen already shown they're not that far behind, and aren't they already outselling Tesla in Europe? I've watched a lot of the ID4 reviews (since I'm in the US and we don't get the ID3), and the issues with the car seem very minor, and potentially fixable with OTA updates. If they end up selling a lot of them, that should take a lot of the wind out of Tesla's sails IM…

I am hoping that VW and others can get to scale quickly. If priced correctly (not too high), I don’t see why VW won’t be able to sell every car they are able to make. The key thing when looking at these metrics are that it is primarily a supply defined market rather than a demand defined one. And, it is about offering a low enough price such that the market will buy it - while hopefully gaining some positive margin on each.

The outselling of Tesla I’m not going to take at face value yet until Tesla’s Berlin factory comes online. Note that Europe sales thus far have been dependent on imports and that it’s quite likely Tesla has been focused on delivering and collecting cash on NA/Asia sales and having the European customers wait a few quarters.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#156

Post by HWR_14 »

rootusrootus wrote: post #95
988747 wrote: post #57

Earlier quoted context omitted.

It's not even about that. It's just about not wasting an opportunity to make money. Some stocks go through cycles: growth, then correction, then growth again. Shorting stock during market corrections helps you maximize your profits. I mean, I can imagine Michael Burry cashing $200M profits when Tesla price goes down, and then switching sides and going long. The most important thing in the stock markets is to remain r…

> I can imagine Michael Burry cashing $200M profits when Tesla price goes down, and then switching sides and going long. Does he have some supernatural ability to time the market when everyone else fails?

He seems to have an excellent sense of the underlying value of assets and enough cash to hold plays for a few years until they are where he thinks they should be. On timing, he seems to be far too early to maximize profits, but I seem to recall him saying something to the effect of he'd rather be too early than too late.

However, I could be very wrong. All I know about the man is what I've read about him.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#157

Post by mbgerring »

mbgerring wrote: post #148
jsnell wrote: post #116

Earlier quoted context omitted.

How does that theory explain Tesla having 20x the market cap of Panasonic?

Is Panasonic building replacements for gas fired power plants?

It looks like Panasonic has been planning the deployment of a 10MW energy storage system at its own facility in India since 2016. Nothing I can find says whether they actually built it or not, or what phase the project is in. Tesla is capable of mass-producing 10MW battery packs and shipping them today, with manufacturing in the US, and is winning contracts to deploy them internationally.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#158

Post by agloeregrets »

cduzz wrote: post #104
agloeregrets wrote: post #60

Earlier quoted context omitted.

> I think they will be very successful and become a big, dominant car maker. I'm not sure really. They keep throwing the entire company at insanely poorly leveraged bets with unfulfilled promises. (Cybertruck is on track to be delivered at a longer timeframe than any car tesla has ever made, they haven't even built the factory or unveiled the final design, same for Semi and Roadster, the new Model S was supposed to b…

They bet the company on the OG roadster, S, and 3. They don't need to now. The 3 and Y are quite successful and quite profitable. The Truck, Semi, Roadster, Leaf Blower, and such are all distractions that aren't worth building until they've managed to establish much larger battery volumes and aren't selling every Y and 3 they make months before they make them. What's their run rate? They've got a ton of cash and viab…

They already are betting the company on a bunch of things. Their cash on hand is almost entirely debt.

Additionally, they are merely meeting demand on Model 3 sales right now, don't forget that they spun down production rate on the 3/Y and are slowing China production as well. US charging networks are growing at a faster rate than Superchargers as well, so in roughly 2 years you are looking at a market where Electrify America is as big as the Supercharger network, the current NY to LA EV record is held by a Taycan on EA's network, not a Tesla.

The Model 3 is not very profitable at all either, sure it sells well (as it should, it's a great car being sold at almost a loss!) but a M3 without AP is not profitable. Still, to this day, they haven't made a penny on their business other than with selling credits but they are not even investing that heavily back into the business right now. Finally, the Cybertruck was told to reservation holders to be shipping in 2021... which isn't happening.

What I find kinda funny is this: You call the truck a distraction..when it is the #1 best selling category in the US AND they have fast encroaching competition that owns the market. That's like calling the Rav4 a distraction for Toyota. The Ford F150 Lightning will likely outsell the cycbertruck in the US as Ford will have two years to scale and keep it in that scale by time the Cybertruck does actually launch. It has been Ford's #1 R&D goal for the last three years as it should be, it's their #1 selling vehicle. Ford sells two F150s in the US for every car Tesla makes globally and the margin is way more per unit.

I'm not saying they are going to go out of business today or this decade. I'm just saying that their differentiation will disappear, customer's will to deal with terrible timelines will evaporate when they can go the next door over and get it today, and once Elon is gone from TSLA (which will happen and should terrify shareholders; he clearly wants little to do with Tesla), the stock will fall like a rock and the debt leverage will fall with it finding Tesla way upside down on a LOT of money that they can't borrow more to cover and without the market and profit explosion the company is betting on.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#159

Post by yumraj »

fleetingmoments wrote: post #92
yumraj wrote: post #66

Earlier quoted context omitted.

And, they have a genius but an unstable genius as a CEO where no one knows what he will do next. Not sure how the stock market quantifies that.

Are you saying they should get a stable genius in?

Stable person yes. The stable genius, hell no.

Stable genius, if they can find one, yes!!

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#160

Post by hindsightbias »

notJim wrote: post #131
clomond wrote: post #114

Earlier quoted context omitted.

While I won't dispute that Tesla's share price is high given where the company is at right now when valued as an auto business, there are a few things I think are worth mentioning and commenting on in your post. > Building an electric car is not that hard, especially if Tesla already did all the hard lifting for you. This couldn't be further from the truth. While making a prototype EV is relatively easy, yes. EV indu…

I don't follow this very closely, but hasn't Volkswagen already shown they're not that far behind, and aren't they already outselling Tesla in Europe? I've watched a lot of the ID4 reviews (since I'm in the US and we don't get the ID3), and the issues with the car seem very minor, and potentially fixable with OTA updates. If they end up selling a lot of them, that should take a lot of the wind out of Tesla's sails IM…

With ICE vehicles being 98% of the market it's not about competition for a sliver of the market. It's about who can scale. And that is a function of batteries and car bodies.

Tesla probably leads in batteries, whereas VW leads in factory capacity.

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