Investor's Corner
Tesla bulls respond to ‘The Big Short’ and his massive bet against the stock
Tesla (NASDAQ: TSLA) bulls are responding to “The Big Short” Michael Burry’s massive bet against the electric automaker’s stock, indicating that their beliefs don’t align with the man who correctly predicted the 2008 collapse of the housing crisis.
Yesterday, a 13-F Filing with the SEC revealed that Burry has puts against over 800,000 shares of Tesla. The details of the puts, like value, strike price, or expiry, are unknown, and the filling only details the number of shares that Burry has puts against.
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However, Tesla bulls like Gene Munster of Loup Ventures and Pierre Ferragu of New Street Research aren’t aligning with Burry’s consensus on the stock.
Burry believes that Tesla’s stock is highly reminiscent of the housing market in 2007, just a few months before the crash that led to the first recession in the American economy in twenty years. The previous economic downfall occurred in 1987 when “Black Monday” struck, and stock markets around the world fell apart. Burry has told Tesla investors to “enjoy it while it lasts” and notes that the housing bubble also gained massive value in 2007 before falling apart in September 2008.
Betting against Tesla stock is a risky option, Munster believes. Tesla shares increased in value by over 700% last year, and while 2021 hasn’t yielded the same results, Munster’s analysis reveals that things like tax credits for owners can only lead to bullish outlooks for the automaker’s stock.
Munster believes the reintroduction of a $7,000 EV tax credit could be one of the biggest pieces of the bull story for Tesla in 2021. “In my view, it should be part of the bull thesis,” Munster said to CNBC’s Squawk Box. “I don’t think we’re at anything close to ending these tax credits. They will likely get restarted again for Tesla owners.”
Tesla lost its ability to offer a $7,000 EV credit after it surpassed the 200,000 vehicle threshold years ago. GM is the only other automaker to achieve this and have the tax credit expunged from its purchases, mostly due to the popularity of the Chevrolet Bolt EV.
Munster also reminds those who are focused on Tesla’s sub-par 2021 run that the stock is up considerably over the past twelve months. “The stock is still up a lot over the past year. It was $160 twelve months ago.”
Meanwhile, other bulls, like Pierre Ferragu, didn’t comment directly on Burry’s opinions of Tesla stock but did state that the “return on operating assets” is Tesla’s “bullet-proof metric.”
“We hear a lot of comments about Tesla’s profitability (or lack thereof),” Ferragu writes. “They usually happily mix considerations about gross margin, segment results, exceptional or financial items, regulatory credits…and rarely make any sense. Tesla builds factories to manufacture cars and sells them. As a result, the only appropriate way to evaluate its operational profitability is to look at cash return on operating assets: out of a dollar of assets immobilized in the group, how much cash can Tesla generate in one year.”
Ferragu says Tesla broke even in Return on Assets in 2018, and in 2020, the company got a 20% cash return. He sees this increasing to 40% in 2023 as new factories in Germany and Texas will increase Tesla’s cash generation as the Return on Assets continues to improve.
NEWS: New Street Research analyst, Pierre Ferragu sees Tesla in the league of TSMC when looking through lens of Return on Operating Assets. Return on Assets broke even in 2018 & is 20% in 2020. This is the bullet-proof metric & he says Tesla will have a 40% cash return in 2023. pic.twitter.com/ZNsiPi3OLC
— Sawyer Merritt ?? (@SawyerMerritt) May 18, 2021
At the time of writing, Tesla shares were trading at $589.44, up 2.16%.
Disclosure: Joey Klender is a TSLA Shareholder.
Elon Musk
Tesla stock gets latest synopsis from Jim Cramer: ‘It’s actually a robotics company’
“Turns out it’s actually a robotics and Cybercab company, and I want to buy, buy, buy. Yes, Tesla’s the paper that turned into scissors in one session,” Cramer said.
Tesla stock (NASDAQ: TSLA) got its latest synopsis from Wall Street analyst Jim Cramer, who finally realized something that many fans of the company have known all along: it’s not a car company. Instead, it’s a robotics company.
In a recent note that was released after Tesla reported Earnings in late January, Cramer seemed to recognize that the underwhelming financials and overall performance of the automotive division were not representative of the current state of affairs.
Instead, we’re seeing a company transition itself away from its early identity, essentially evolving like a caterpillar into a butterfly.
The narrative of the Earnings Call was simple: We’re not a car company, at least not from a birds-eye view. We’re an AI and Robotics company, and we are transitioning to this quicker than most people realize.
Tesla stock gets another analysis from Jim Cramer, and investors will like it
Tesla’s Q4 Earnings Call featured plenty of analysis from CEO Elon Musk and others, and some of the more minor details of the call were even indicative of a company that is moving toward AI instead of its cars. For example, the Model S and Model X will be no more after Q2, as Musk said that they serve relatively no purpose for the future.
Instead, Tesla is shifting its focus to the vehicles catered for autonomy and its Robotaxi and self-driving efforts.
Cramer recognizes this:
“…we got results from Tesla, which actually beat numbers, but nobody cares about the numbers here, as electric vehicles are the past. And according to CEO Elon Musk, the future of this company comes down to Cybercabs and humanoid robots. Stock fell more than 3% the next day. That may be because their capital expenditures budget was higher than expected, or maybe people wanted more details from the new businesses. At this point, I think Musk acolytes might be more excited about SpaceX, which is planning to come public later this year.”
He continued, highlighting the company’s true transition away from vehicles to its Cybercab, Optimus, and AI ambitions:
“I know it’s hard to believe how quickly this market can change its attitude. Last night, I heard a disastrous car company speak. Turns out it’s actually a robotics and Cybercab company, and I want to buy, buy, buy. Yes, Tesla’s the paper that turned into scissors in one session. I didn’t like it as a car company. Boy, I love it as a Cybercab and humanoid robot juggernaut. Call me a buyer and give me five robots while I’m at it.”
Cramer’s narrative seems to fit that of the most bullish Tesla investors. Anyone who is labeled a “permabull” has been echoing a similar sentiment over the past several years: Tesla is not a car company any longer.
Instead, the true focus is on the future and the potential that AI and Robotics bring to the company. It is truly difficult to put Tesla shares in the same group as companies like Ford, General Motors, and others.
Tesla shares are down less than half a percent at the time of publishing, trading at $423.69.
There are a lot of Tesla bulls out there who have astronomical expectations for the company, especially as its arm of reach has gone well past automotive and energy and entered artificial intelligence and robotics.
However, some of the most bullish Tesla investors believe the company could become worth $100 trillion, and CEO Elon Musk does not believe that number is completely out of the question, even if it sounds almost ridiculous.
To put that number into perspective, the top ten most valuable companies in the world — NVIDIA, Apple, Alphabet, Microsoft, Amazon, TSMC, Meta, Saudi Aramco, Broadcom, and Tesla — are worth roughly $26 trillion.
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Cathie Wood of ARK Invest believes the number is reasonable considering Tesla’s long-reaching industry ambitions:
“…in the world of AI, what do you have to have to win? You have to have proprietary data, and think about all the proprietary data he has, different kinds of proprietary data. Tesla, the language of the road; Neuralink, multiomics data; nobody else has that data. X, nobody else has that data either. I could see $100 trillion. I think it’s going to happen because of convergence. I think Tesla is the leading candidate [for $100 trillion] for the reason I just said.”
Musk said late last year that all of his companies seem to be “heading toward convergence,” and it’s started to come to fruition. Tesla invested in xAI, as revealed in its Q4 Earnings Shareholder Deck, and SpaceX recently acquired xAI, marking the first step in the potential for a massive umbrella of companies under Musk’s watch.
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Now that it is happening, it seems Musk is even more enthusiastic about a massive valuation that would swell to nearly four-times the value of the top ten most valuable companies in the world currently, as he said on X, the idea of a $100 trillion valuation is “not impossible.”
It’s not impossible
— Elon Musk (@elonmusk) February 6, 2026
Tesla is not just a car company. With its many projects, including the launch of Robotaxi, the progress of the Optimus robot, and its AI ambitions, it has the potential to continue gaining value at an accelerating rate.
Musk’s comments show his confidence in Tesla’s numerous projects, especially as some begin to mature and some head toward their initial stages.
Elon Musk
Tesla director pay lawsuit sees lawyer fees slashed by $100 million
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
The Delaware Supreme Court has cut more than $100 million from a legal fee award tied to a shareholder lawsuit challenging compensation paid to Tesla directors between 2017 and 2020.
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
Delaware Supreme Court trims legal fees
As noted in a Bloomberg Law report, the case targeted pay granted to Tesla directors, including CEO Elon Musk, Oracle founder Larry Ellison, Kimbal Musk, and Rupert Murdoch. The Delaware Chancery Court had awarded $176 million to the plaintiffs. Tesla’s board must also return stock options and forego years worth of pay.
As per Chief Justice Collins J. Seitz Jr. in an opinion for the Delaware Supreme Court’s full five-member panel, however, the decision of the Delaware Chancery Court to award $176 million to a pension fund’s law firm “erred by including in its financial benefit analysis the intrinsic value” of options being returned by Tesla’s board.
The justices then reduced the fee award from $176 million to $70.9 million. “As we measure it, $71 million reflects a reasonable fee for counsel’s efforts and does not result in a windfall,” Chief Justice Seitz wrote.
Other settlement terms still intact
The Supreme Court upheld the settlement itself, which requires Tesla’s board to return stock and options valued at up to $735 million and to forgo three years of additional compensation worth about $184 million.
Tesla argued during oral arguments that a fee award closer to $70 million would be appropriate. Interestingly enough, back in October, Justice Karen L. Valihura noted that the $176 award was $60 million more than the Delaware judiciary’s budget from the previous year. This was quite interesting as the case was “settled midstream.”
The lawsuit was brought by a pension fund on behalf of Tesla shareholders and focused exclusively on director pay during the 2017–2020 period. The case is separate from other high-profile compensation disputes involving Elon Musk.
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