Investor's Corner
Tesla investors should ‘enjoy it while it lasts,’ says man who predicted 2007 housing collapse
Tesla stock will come crumbling down, at least that’s what Michael Burry, the man who predicted the 2007 United States housing bubble’s collapse in 2007, says.
Burry’s status as a financial prediction guru was captured in “The Big Short,” a novel turned into a Hollywood hit starring Steve Carrell and Christian Bale, who played Burry in the film. After putting an over $5 billion short on the housing market to collapse in 2007, Burry and his investors took away billions of dollars in gains, and he is predicting the same thing to happen to Tesla soon.
“Well, my last Big Short got bigger and bigger and BIGGER too,” Burry said in a now-deleted Tweet. “Enjoy it while it lasts,” he added.
In December, Burry became the most recent big-time investor to publicly admit that he was shorting Tesla stock, a move that cost those in the position over $38 billion in 2020 due to the electric automaker’s over 700% gain on Wall Street during the year. It was an unlikely scenario: a car company with limited production facilities trying to sell electric cars in the middle of a pandemic. Despite this, Tesla shares continued to rise, and 2021 is appearing to be no different.
Earlier this week, Tesla officially passed Facebook for the sixth-most valuable company in the world based on market capitalization. Additionally, the surge in stock price so far in 2021 has made Elon Musk, the company’s CEO, the richest person in the world. He officially passed Amazon frontman Jeff Bezos for the #1 spot on Thursday.
Burry’s December tweet that revealed his short position was reminiscent of an email that was sent out by CEO Elon Musk, where he stated the company could be “crushed like a souffle.” “Sell that #TeslaSouffle,” Burry tweeted after stating the company had “a current ridiculous price.”
Tesla is no stranger to short-sellers, though. Through the years, the automaker has been called every name in the book by notorious hedge fund managers and investment gurus who are convinced that Tesla is on its way down. Several of these investors have admitted defeat in their mission to make money off of Tesla’s downfall. Still, several are sticking to their guns, even though it has already cost them millions of dollars.
David Einhorn of Greenlight Capital Re is one of them. Einhorn has traded barbs with Musk on Twitter for the public to feast on in the past, but despite his very public losses that he reported during his fund’s Q3 Earnings, he still cannot seem to trim back his short position. Tesla was a main contributor to the 14.9% decrease Einhorn saw in gross written premiums, the 10.7% decrease in net premiums, and a $22.8 million loss during the first nine months of 2020.
Tesla has continued to scale its production, figure out efficiencies in manufacturing, and continue on an already widely-successful product with its electric vehicles. The automaker’s focus in 2020 was battery cells and production, and it outlined its roadmap to making EVs affordable in the coming years through mass-production of EV cells. Tesla is the most successful EV company globally, dominating market share in many countries, and contributing to an accelerated transition to sustainable transportation. While some in the world are telling you to sell, the big winners are reiterating their desire for investors to get in while they can, supporting a company whose mission is much larger than money.
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.
Will Tesla join the fold? Predicting a triple merger with SpaceX and xAI
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.
SpaceX officially acquires xAI, merging rockets with AI expertise
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.
Investor's Corner
Tesla (TSLA) Q4 and FY 2025 earnings call: The most important points
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Tesla’s (NASDAQ:TSLA) Q4 and FY 2025 earnings call highlighted improving margins, record energy performance, expanding autonomy efforts, and a sharp acceleration in AI and robotics investments.
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Key takeaways
Tesla reported sequential improvement in automotive gross margins excluding regulatory credits, rising from 15.4% to 17.9%, supported by favorable regional mix effects despite a 16% decline in deliveries. Total gross margin exceeded 20.1%, the highest level in more than two years, even with lower fixed-cost absorption and tariff impacts.
The energy business delivered standout results, with revenue reaching nearly $12.8 billion, up 26.6% year over year. Energy gross profit hit a new quarterly record, driven by strong global demand and high deployments of MegaPack and Powerwall across all regions, as noted in a report from The Motley Fool.
Tesla also stated that paid Full Self-Driving customers have climbed to nearly 1.1 million worldwide, with about 70% having purchased FSD outright. The company has now fully transitioned FSD to a subscription-based sales model, which should create a short-term margin headwind for automotive results.
Free cash flow totaled $1.4 billion for the quarter. Operating expenses rose by $500 million sequentially as well.
Production shifts, robotics, and AI investment
Musk further confirmed that Model S and Model X production is expected to wind down next quarter, and plans are underway to convert Fremont’s S/X line into an Optimus robot factory with a capacity of one million units.
Tesla’s Robotaxi fleet has surpassed 500 vehicles, operating across the Bay Area and Austin, with Musk noting a rapid monthly expansion pace. He also reiterated that CyberCab production is expected to begin in April, following a slow initial S-curve ramp before scaling beyond other vehicle programs.
Looking ahead, Tesla expects its capital expenditures to exceed $20 billion next year, thanks to the company’s operations across its six factories, the expansion of its fleet expansion, and the ramp of its AI compute. Additional investments in AI chips, compute infrastructure, and future in-house semiconductor manufacturing were discussed but are not included in the company’s current CapEx guidance.
More importantly, Tesla ended the year with a larger backlog than in recent years. This is supported by record deliveries in smaller international markets and stronger demand across APAC and EMEA. Energy backlog remains strong globally as well, though Tesla cautioned that margin pressure could emerge from competition, policy uncertainty, and tariffs.
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