Retreat or lie in wait? Harsh criticism of Tesla, Inc. (TSLA.US) high valuation, "big short" denies shorting.

The prototypical character Michael Burry from the movie "The Big Short" denied shorting Tesla, Inc. (TSLA.US) stocks, although he had previously stated earlier this month that the company was "absurdly overvalued." Burry replied to a user on the social platform X who asked him if he would short Tesla, Inc., saying, "I am not shorting (Tesla, Inc.)." This well-known hedge fund manager became a market legend for accurately predicting the 2008 U.S. subprime mortgage crisis and heavily shorting subprime mortgage-backed securities through credit default swaps. This bet brought him nearly $100 million in personal profits and earned his investors between $700 million and $725 million. In the industry, Burry is famous for his extreme contrarian investments as he can endure significant drawdowns and eventually achieve victory after several years. After years of staying out of the public eye, Burry returned to public attention in November this year. He had previously issued several warnings about the overvaluation of tech stocks in the U.S. due to an AI-driven bubble. He disclosed his short positions in NVIDIA Corporation and Palantir while accusing major AI spenders of misrepresenting the depreciation of their data center assets. Towards the end of November, Burry directed his criticism towards Tesla, Inc., stating in his column that the company's market value was "absurdly overestimated" and had been for quite some time. In the column, Burry not only questioned Tesla, Inc.'s valuation but also argued that the company's ownership structure and business strategy were problematic. He pointed out that if Musk's proposed $1 trillion compensation plan were to go through, it would further dilute existing shareholders' equity in Tesla, Inc. and diminish the earnings per share value. Burry also noted that Tesla, Inc.'s business focus had shifted multiple times in recent years: from early focus on electric vehicle manufacturing to subsequent bets on autonomous driving technology, and currently increasing investment in humanoid Siasun Robot & Automation development. Each strategic change was accompanied by market volatility, and the company had consistently failed to escape the pressure from continuous new entrants, indicating that the company's core business moat was still not solid. This was not the first time Burry had taken a bearish stance on Tesla, Inc. In 2021, he had established a short position in Tesla, Inc. worth $530 million through his fund Scion Asset Management, but closed it out after holding it for just a few months, stating that the move was "a short-term trading strategy and not a representation of his long-term view." It is worth mentioning that since Tesla, Inc.'s stock price hit a year low in April due to Musk's political actions and controversies causing consumer dissatisfaction, as well as increased competition in the electric vehicle market leading to weak delivery data and profit pressure, the stock price has seen a remarkable rebound and reached a historic high in December. However, concerns about Tesla, Inc.'s high valuation and sluggish electric vehicle business continue to linger. In terms of valuation, Tesla, Inc.'s current price-to-earnings ratio (TTM) is as high as 313 times, significantly higher than the other six companies in the U.S. stock market's "seven giants" (Apple Inc., Microsoft Corporation, Alphabet Inc. Class C, Amazon.com, Inc., NVIDIA Corporation, Meta, Tesla, Inc.). Among them, Apple Inc. has a P/E ratio of about 37 times, Amazon.com, Inc. about 33 times, and Microsoft Corporation about 35 times. Even NVIDIA Corporation, which Burry had previously shorted, has a P/E ratio of only about 46 times. Meanwhile, despite the growth in global electric vehicle sales, Tesla, Inc.'s electric vehicle sales base has remained weak this year and may face a situation of consecutive year-on-year sales decline for the second year. In addition, Tesla, Inc. recently published analyst estimates of vehicle delivery volumes on its official website, with the average expectations for the fourth quarter of 2025 being more pessimistic than the market compilation data. According to Tesla, Inc.'s own statistics, analysts on average expect the company to deliver 422,850 vehicles in the fourth quarter, a 15% decline from the same period last year. In comparison, the market average estimate is 445,061 vehicles, representing a 10% decline year-on-year.