Tesla investors are shrugging off warnings from prominent short seller Michael Burry that the electric vehicle giant is "ridiculously overvalued." Burry has been warning about mounting dilution as a result of CEO Elon Musk's massive pay package, which could see existing shareholders' ownership reduced by 3.6 percent annually.
However, Tesla bulls are convinced that the company's long-term prospects justify its lofty valuation. With Musk's $1 trillion stock-based compensation plan set to significantly dilute existing shares, some investors are dismissing Burry's concerns, with one analyst calling it "short at your peril."
Burry's warning was based on his claim that Tesla's management hasn't adequately informed shareholders about the impact of this share dilution. The massive pay package is structured in 12 tranches totaling 425 million shares, and some investors believe Tesla could reach a valuation of $2 trillion as early as next year if its robotaxi service takes off.
Tesla bulls argue that the company's broad technological footprint - encompassing EVs, autonomous vehicles, energy storage, and software - means it can't be valued purely on automotive metrics. If any one of these options "hits at scale," the stock could remain expensive for a long time, according to Tuttle Capital Management CEO Matthew Tuttle.
In contrast, Burry believes that Tesla's market capitalization is indeed overvalued and has been so for a long time. He argued that with recent news of Musk's $1 trillion pay package, dilution is certain to continue, which could negatively impact the company's profitability and value on a per-share basis.
Despite this warning, investors remain optimistic about Tesla's future growth prospects, with some analysts calling the dilution "not much" and arguing that it will result in a huge valuation boost.
However, Tesla bulls are convinced that the company's long-term prospects justify its lofty valuation. With Musk's $1 trillion stock-based compensation plan set to significantly dilute existing shares, some investors are dismissing Burry's concerns, with one analyst calling it "short at your peril."
Burry's warning was based on his claim that Tesla's management hasn't adequately informed shareholders about the impact of this share dilution. The massive pay package is structured in 12 tranches totaling 425 million shares, and some investors believe Tesla could reach a valuation of $2 trillion as early as next year if its robotaxi service takes off.
Tesla bulls argue that the company's broad technological footprint - encompassing EVs, autonomous vehicles, energy storage, and software - means it can't be valued purely on automotive metrics. If any one of these options "hits at scale," the stock could remain expensive for a long time, according to Tuttle Capital Management CEO Matthew Tuttle.
In contrast, Burry believes that Tesla's market capitalization is indeed overvalued and has been so for a long time. He argued that with recent news of Musk's $1 trillion pay package, dilution is certain to continue, which could negatively impact the company's profitability and value on a per-share basis.
Despite this warning, investors remain optimistic about Tesla's future growth prospects, with some analysts calling the dilution "not much" and arguing that it will result in a huge valuation boost.
. I mean, Elon Musk is literally making himself richer by $1 trillion 
, which is basically a never-ending supply of Tesla stock 
. Meanwhile, investors are all like "yeah, this is fine" 
. It's like they're not thinking about the bigger picture... what if it actually hits at scale? What if robotaxi becomes a huge thing and suddenly Tesla's valuation skyrockets 
? That's just gonna make existing shareholders poorer 
.
. You gotta separate the hype from reality 
. It's like when you're too excited about a new iPhone release and you forget to check the fine print 
. I'm not saying Tesla will fail or anything 
, but just being cautious, you know? Maybe investors should be shorting at their peril 
.
Like, if you're gonna give Elon Musk this massive pay package, it's only natural that existing shareholders' ownership is gonna get hit hard. And it's not like he's being transparent about the impact, which is pretty shady imo.
.
. And if anyone thinks Tesla can reach $2 trillion valuation next year, they're smoking some good stuff 
.
. It's like, dude's stock is gonna be worth less than it is today by the time he's done with this pay package 
. And while I get why some analysts are optimistic about Tesla's growth, I'm like, "Guys, let's not forget the numbers" 
. The pay package is just too much 
. It's like people are just trying to predict which way it'll go next, but nobody really knows for sure.
. I mean, $2 trillion valuation? That's like something out of a fantasy novel 
. Still, I guess that's what makes Tesla so fascinating - we'll just have to wait and see how it all plays out