Movie 'Big Short' Protagonist Also Bets 600 Billion Won on Tesla Decline

Predicted 2008 US Housing Market Collapse and Massive Short Selling
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Michael Burry, Founder of Scion Asset Management

[Asia Economy Reporter Kim Suhwan] Michael Burry, founder of Scion Asset Management and famous as the protagonist of the movie The Big Short, has reportedly bet on the decline of Tesla.

According to CNBC on the 17th (local time), Burry is known to hold put options on Tesla stock worth $534 million (approximately 600 billion KRW). Burry reported to the U.S. Securities and Exchange Commission (SEC) that he held put options of this scale as of the end of March.

Put options are a type of derivative product that bets on a stock price decline.

On the day, Tesla's stock price fell about 2% to $576.83. This marks a drop of over 15% since the beginning of the month and nearly 35% down from the peak on January 26 of this year.

Burry has previously warned of a market bubble and predicted a crash through his Twitter account. He is known for foreseeing the collapse of the U.S. housing market before the 2008 global financial crisis, making huge profits by short selling. Now, he is warning of a bubble in the U.S. stock market, and on February 22, he tweeted, "Rampant speculation and 'debt investing' have driven the stock market to the brink of collapse."

Burry has also consistently posted critical tweets about Tesla, on which he has bet against. He revealed that he shorted Tesla in December last year and criticized the soaring Tesla stock price as "absurd." In his tweets, he explained that the decline in Tesla's stock price is due to concerns about uncertain future growth prospects.

Currently, Tesla's main source of revenue is regulatory credits. Regulatory credits are a type of point system provided by the government to companies that contribute to solving environmental issues. The government provides regulatory credits to companies like Tesla, which are electric vehicle manufacturers or companies that do not cause environmental problems. Tesla profits by selling these credits to companies that emit more pollutants than government-set standards.

In the first quarter alone, Tesla recorded $518 million in regulatory credit sales, and through regulatory credit sales exceeding $400 million in the fourth quarter of last year, it was able to earn an operating profit of $270 million.

CNBC reported, "So far, Tesla has earned over $1.6 billion in regulatory credit sales, enabling it to achieve four consecutive quarters of profit," adding, "As leading automakers focus on electric vehicle investments, it is expected that the need to purchase regulatory credits will disappear, which could impact Tesla's regulatory credit sales."

Tesla is also facing delays in the release of new versions of its premium sedan and SUV models, Model S and X, and regulatory pressure from Chinese authorities.

Additionally, investors believe that CEO Elon Musk's comments related to cryptocurrencies and the resulting sharp price fluctuations have negatively affected the stability of Tesla's stock price.

Elon Musk, CEO of Tesla
[Photo by Reuters]

Meanwhile, Tesla's stock price decline has also reduced Musk's wealth. According to Bloomberg, Musk has dropped one rank from second to third place in the global billionaire rankings, yielding the second spot to Bernard Arnault, chairman of Louis Vuitton Mo?t Hennessy (LVMH). Musk's wealth is estimated at $160.6 billion (approximately 182.76 trillion KRW), down 24% from its peak in January.

Bloomberg pointed out, "Musk's tweets continue to drive down Bitcoin prices, and Musk's wealth is moving in the same direction."