Michael Burry and Elon Musk
- Michael Burry bet against two of Elon Musk’s companies last quarter.
- “The Big Short” investor bought Tesla puts and backed Rocket Lab, a SpaceX rival.
- Burry may be trolling Musk with his Rocket Lab wager.
- For more stories go to www.BusinessInsider.co.za.
Michael Burry is betting against Elon Musk, one of the world’s richest and most powerful men, on two fronts. The contrarian investor didn’t just buy options that pay off if Tesla’s stock falls, he also backed one of SpaceX’s biggest rivals.
Burry’s Scion Asset Management revealed this week that it bought bearish put options against 800,100 Tesla shares last quarter. It also snapped up 462,000 shares in Vector Acquisition that were worth $5.5 million (R82 million) at the end of March.
Vector is a special-purpose acquisition company (SPAC) that struck a deal in March to buy Rocket Lab, a business that designs and manufactures rockets to carry satellites and other cargo into space. Rocket Lab’s flagship Electron rocket is second only to SpaceX’s Falcon 9 in annual launches, and the upstart is venturing further into Musk’s sphere by developing reusable and crewed rockets.
Burry might be genuinely bullish on Rocket Lab’s prospects, but it’s much more likely that he’s trolling Musk. The Scion chief is skeptical of SPACs, mostly invests in value stocks like Kraft Heinz, and probably isn’t on board with Rocket Lab’s targeted public valuation of $4.1 billion (R61.5 billion) – an astounding four times its projected revenue in 2026.
The investor has also targeted Musk before. He announced he was short Tesla in December, and suggested Musk capitalise on the automaker’s “ridiculous” stock price by issuing more shares. He later compared the hype around Tesla to the dot-com and housing bubbles, telling shareholders to “enjoy it while it lasts.”
Burry also dismissed Tesla’s $1.5 billion (R22.5 billion) purchase of bitcoin earlier this year as “digital confetti,” intended to distract from the company’s clash with Chinese regulators over car-quality issues.
The Scion boss shot to fame after his billion-dollar bet against the US housing bubble was featured in the book and the movie “The Big Short.” Burry also helped pave the way for the meme-stock boom earlier this year – his GameStop investment in 2019 and letters to the company’s board stoked enthusiasm among retail investors.
Burry warned of mass speculation in markets earlier this year, highlighting Tesla, the GameStop buying frenzy, bitcoin, and Robinhood as examples. He vowed to stop tweeting in mid-March, citing a visit from federal regulators, and deleted his Twitter profile in April.
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