Tesla’s recent $1.5 billion investment into Bitcoin is a distraction from Chinese regulators looking into complaints of quality issues from consumers, Big Short investor Michael Burry said in a series of deleted tweets on Monday.
Burry, who predicted the 2007 housing collapse by recognizing a market bubble, has been notably bearish on TSLA stock in recent memory. In January, Burry took to Twitter to claim the automaker’s investors “should enjoy it while it lasts,” speaking of Tesla’s 700% rise in value on Wall Street last year.
Michael Burry was the subject of the Hollywood hit “The Big Short,” a novel turned into a Steve Carrell and Christian Bale-led film that showed the story of the 2007 housing collapse. Burry made billions in gains after placing a $5 billion short and says that Tesla’s situation is eerily similar to the housing crisis that occurred nearly a decade and a half ago.
“Chinese regulators summon Tesla on quality issues as consumers complain about quality…but $TSLA bought $BTC,” Burry said. “In my mind’s eye, so much #digitalconfetti.”
Five separate Chinese regulatory agencies summoned Tesla after complaints came forward from Model 3 buyers. The State Administration for Market Regulation, or SAMR, stated that battery fires and abnormal acceleration were two of the main concerns that were being addressed, CNN said. Battery fire concerns could deal with a recent parking garage fire that involved a Model 3 with battery damage after it was punctured during a drive. Tesla indicated that the vehicle in question likely had damage to its undercarriage and battery, Chinese outlets reported.
Regarding the Chinese regulators, Tesla released a statement on its official Weibo account:
Burry added to his flurry of tweets that disapproved of Tesla’s Bitcoin investment.
“$TSLA and $BTC correlation coefficient is 0.951967 over the last six months,” he said, according to Business Insider. “@elonmusk going for perfect unity? Nah, Elon dreams the impossible. He is determined to break unity. Correlation > 1. And he has history on his side. $TSLA and $BTC investors can make anything happen.”
However, Tesla’s $1.5 billion Bitcoin investment isn’t looked at negatively by all investors. ARK Invest’s Tasha Keeney indicated that the investment opens the doors for an easier international expansion, especially when dealing with corporate treasury issues. It is easier to deal with one form of currency accepted internationally than to have several forms of international currency to convert. The risk of dealing with only Bitcoin is less severe than dealing with the volatility of so many various internationally used forms of payment.
Tesla shorts are coming off of a significant year of defeat, reporting $38 billion in losses after the 700% gain in stock price last year.
Disclosure: Joey Klender is a TSLA Shareholder.