Billionaire Former Medical Student Betting on Tesla's Decline [News Inside]

Michael Burry, Founder of Scion Capital Hedge Fund

▲Michael Burry

[Asia Economy Reporter Kwon Jae-hee] A billionaire former medical student who bet on the decline of U.S. electric vehicle maker Tesla's stock.

The living legend of the investment world, Michael Burry. He is also famous as the real-life protagonist of the movie "The Big Short," who predicted the subprime mortgage crisis and amassed enormous wealth.

According to the U.S. Securities and Exchange Commission (SEC), Burry's asset management firm Scion Asset Management reported holding 801,000 Tesla shares in put options worth $534 million (approximately 602 billion KRW) as of the end of March. Put options are financial products that bet on a stock price decline.

Previously, Michael Burry expressed skepticism about Tesla and Elon Musk several times. In January, he warned on his Twitter that Tesla's practice of profiting from carbon credits would be unsustainable. He pointed out that a significant portion of Tesla's revenue came from selling carbon credits. It is expected that as more automakers produce electric vehicles, this revenue will decrease. In fact, earlier this month, Stellantis, formed by the merger of Fiat Chrysler Automobiles (FCA) and Peugeot Citro?n (PSA), stated, "Due to the merger, there is no longer a need to purchase Tesla's carbon credits."

The fact that it was none other than Burry, and that he acted not just by words but with a large volume of put options, inevitably made Tesla shareholders nervous.

Indeed, after Burry exercised his put options, Tesla's stock price closed down about 2% at $576.83.

Burry first demonstrated his true value during the subprime mortgage crisis when everyone else was losing their entire fortunes, he made a huge profit. In 2005, when the U.S. housing market was booming, Burry saw through the weaknesses of subprime mortgages and made a fortune through short selling during the financial crisis. For this reason, he was portrayed as one of the main characters in the movie "The Big Short."

At that time, investors in Scion Capital, which he led, received dividends totaling $700 million (approximately 790 billion KRW). Burry himself earned $100 million (approximately 110 billion KRW). He later closed Scion Capital and re-established Scion Asset Management in 2013.

Also, Burry was one of the investors who had invested in GameStop since 2018, which became a craze among individual investors earlier this year. However, it is known that he sold all his shares by the second half of last year, when GameStop's stock price began to rise, so he did not make a large profit.

During the GameStop frenzy, Burry said, "If my investment helped you learn about GameStop and make a profit, congratulations," but also warned, "This is madness and dangerous."

Meanwhile, Burry graduated from UCLA and entered Vanderbilt University School of Medicine. Later, while working as a neurology resident at Stanford University School of Medicine, his stock market analysis gained significant attention. However, he did not complete his residency. Choosing to pursue investing as a hobby, he currently operates the asset management firm Scion Asset Management.