“The Big Short” investor Michael Burry said he is no longer betting against Tesla Inc.(NASDAQ:TSLA) and that his position in the electric vehicle maker was only a trade, CNBC reported Friday.
What Happened:“I was never short tens or hundreds of millions of any of these things through options, as was reported. The options bets were extremely asymmetric, and the media was off by orders of magnitude,” Burry was quoted by CNBC as saying.
Burry’s private investment firm Scion Asset Management, which was reported to have 800,000 bearish put options on Tesla shares in May,disclosed in August that it has 1.1 million put options on the company worth around $731 million.
A put option gives an investor the right to sell a stock at a certain price in the future.
Why It Matters:Burry is a former hedge fund manager who gained notoriety on Wall Street by predicting and profiting from the subprime mortgage crisis. He was depicted by Christian Bale in “The Big Short” movie in 2015.
Burry said in December last year that he was shorting Tesla stock and is skeptical of the company’s lofty valuations. He had earlier said that Tesla relies on regulatory credit sales rather than auto sales to turn a profit.
Tesla’s stock rose on Friday after Jefferies analyst Philippe Houchois maintained a Buy rating on the stock and raised the company’s price target from $850 to $950. The stock’s year-to-date returns are 19.47%.
Tesla is scheduled to release its financial results for the third quarter after market close on Oct. 20.
Price Action:Tesla shares closed 3.0% higher in Friday’s regular trading session at $843.03 and further gained 0.7% in the after-hours session to $849.00.
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