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Michael Burry’s Next Big Short: Tesla

Michael Burry has a new big short: Tesla.

Burry has been skeptical of Tesla for the last few months, comparing it to the dot-com mania a few months ago. Now, Burry disclosed that his fund is short 800,000 shares of Tesla through puts. As of March 31st, the position was worth a total of $534 million.

Burry first revealed his Tesla short position on December 2nd, but the story is now picking up steam because Tesla stock has fallen several weeks in a row. Many short sellers believe now is the time for Tesla to finally come back down to earth.

The option flow has also turned increasingly negative, according to data from Vigtec. In 2020, option activity for Tesls was almost always predominantly bullish, even when the stock was falling. Now, Tesla continues to fall and options activity continues to turn more neutral and bearish.

On the other side of the argument, Tesla has experienced several similar corrections before rocketing upwards again. Every stock, no matter how good, has its corrections.

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