Elon Musk’s Tesla took a hit from “Big Short” investor Michael Burry, who claimed the electric vehicle maker is “ridiculously overvalued” just days after voicing concern about the market’s AI boom.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry wrote in his Substack newsletter “Cassandra Unchained” on Sunday, Reuters reported.
Burry further calculated that Tesla reduces existing shareholders’ stakes by roughly 3.6% annually through continued share issuance and the absence of buybacks. He added that Musk’s massive compensation plan will add to that dilution.
Last month, Tesla shareholders voted to approve Musk’s $1 trillion pay package — the largest executive compensation plan on record. Under the plan, Musk would receive up to about 12% of Tesla’s stock, subject to restrictions, and worth about $1 trillion if the company reaches a market capitalization of $8.5 trillion and meets other performance milestones over 10 years. As of late November 2025, Tesla’s market value stood around $1.43 trillion — making it the world’s most valuable automaker and more than five times larger than Toyota’s roughly $260 billion valuation — while CEO Elon Musk holds about 13% of the company’s outstanding shares.
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The revised compensation plan followed a Delaware judge’s decision in January 2024 voiding Musk’s earlier $56 billion pay package, which remains the subject of ongoing litigation.
As of Monday afternoon, Tesla shares were trading around $427–$430, a slight dip from the prior session. Over the past year, Tesla’s share price has climbed sharply, reflecting investor optimism about its growth plans, though it remains below its 52-week-high.
Tesla did not return Fox News Digital’s request for comment.
Burry rose to prominence after correctly predicting the collapse of the U.S. housing market in 2007–08, a bet he executed through early, controversial short positions against subprime mortgage securities.
His foresight was later immortalized in Michael Lewis’ “The Big Short” and its Oscar-winning film adaptation, cementing his reputation as one of Wall Street’s most famous contrarian investors.
Reuters also reported that Burry recently increased his criticism of tech sector giants like Nvidia and Palantir, “questioning the cloud infrastructure boom and accusing major providers of using aggressive accounting to inflate profits from their massive hardware investments.”
Conversely, Musk said in a new interview Sunday that he believes robotics and artificial intelligence (AI) will be essential to solving the nation’s more than $38 trillion national debt.
“I think that’s pretty much the only thing that’s going to solve for the U.S. debt crisis, because currently the U.S. debt is insanely high,” Musk said. “The interest payments on the debt exceed the entire military budget of the United States – just the interest payments, and that’s at least in the short-term going to continue to increase.”
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FOX Business’ Eric Revell contributed to this report.
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