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Michael Burry, the well - known American "short seller", has placed a short bet on Tesla's stock. He points to what he deems as the company's "absurd valuation" as one of the key factors. Moreover, he raises a red flag, warning that the proposed $1 trillion compensation package for founder Elon Musk is set to worsen the dilution of shareholders' equity.
As reported by Fortune, which referenced an article Burry published on Substack, he makes an estimate. Without stock repurchases to counterbalance the effect, Tesla's stock - based compensation plan will lead to an annual dilution of shareholders' equity by roughly 3.6%. Burry has long held a pessimistic view on tech stocks with high valuations. In the past, he also took a short position on leading chipmaker Nvidia, voicing similar worries about the dilution of shareholders' equity.
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