Michael Burry, famed for his ‘Big Short’ move, saw his bet against Tesla pay off dramatically as the EV giant's stock plunged steeply. On June 30, Burry revealed he took a short position against Tesla when shares traded around $416.22. By July 24, Tesla’s stock had fallen to $319.69, marking a 23.19% decline since his announcement.
This tumble includes a sharp 14.52% drop following the company’s disappointing Q2 earnings report on July 22, which sent shockwaves through the market. Tesla reported earnings per share (EPS) of just $0.33, falling short of the $0.51 analysts expected. Although the company exceeded revenue forecasts with $28.24 billion compared to $25.71 billion projected, its shrinking profit margins raised concerns among investors.
Impact on Short Sellers and Market Context
While the exact size of Burry's short position remains undisclosed, Bloomberg estimates that short sellers who targeted Tesla prior to the earnings announcement collectively earned around $4.1 billion. This surge in short profits highlights a growing skepticism around Tesla’s valuation.
Beyond Tesla, Burry's other short bets also mostly showed results. Caterpillar shares dropped 16% from $1,064.90 to $894.54, and Applied Materials lost 22.16%, falling from $723 to $562.80 between June 30 and July 24. The exception was Nvidia, where Burry’s short positioned suffered as shares rose 4.33% to $208.76.
Investors facing Tesla's earnings miss may also recall similar earnings reactions in the tech sector, as seen recently when Google shares slid amid AI investment news. Tesla’s latest financial results shows the fine line between growth expectations and profitability, fueling volatility for its stock.
