Tesla Shares Gain as Buyers Look to 'Squeeze' Michael 'Big Short' Burry

Michael Burry, the hedge fund investor made famous by Christian Bale's portrayal in 'The Big Short,' unveils a $534 million bet against the clean energy carmaker.
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Tesla Inc.  (TSLA) - Get Report shares reversed earlier declines Tuesday as buyers looked to offset the impact of Michael Burry, made famous through his depiction by Christian Bale in 'The Big Short', who unveiled another significant bet against the clean-energy carmaker.

In papers filed with the Securities and Exchange Commission late Monday, Burry's Scion Asset Management revealed a short position worth around 800,100 shares, or just under $535 million, based on holdings of put options.

Put options give the buyer the right, but not the obligation, to sell a certain asset (such as Tesla stock) at a certain price at a defined point in the future. 

Burry, who made billions betting against the U.S. housing market in the mid-2000s, has recently expressed concern about the fact that Tesla generates a large portion of its profits from the sale of regulatory credits as opposed to the production of its Model 3 and Model S sedans.

Tesla stock received support early Tuesday, however, from details of President Joe Biden's plans to offer ""point-of-sale incentives that encourage EV deployment" that will "incentivize manufacturers who use good labor practices."

Tesla shares were marked 2.8% higher in late-morning trading to change hands at $593.14 each, a move that would trim the stock's year-to-date decline to around 16%. The shares traded at an all-time intra-day high of $900.40 on January 25.

Data from S3 Partners, which collects and tracks short interest positions on major stocks, notes that shot interest in Tesla has risen by around 4.3 billion shares this year to $23.7 million shares, or 5.18% of the total float. Mark-to-mark profits for short sellers, meanwhile, are up to around $470 million.

Late last month, Tesla's stronger-than-expected first quarter earnings were clouded by details showing that profits were flattered by $518 million in regulatory credit sales -- a 46% increase from last year -- and just over $100 million from the sale of bitcoins it purchased earlier this year.

Tesla said non-GAAP earnings for the three months ending in March were pegged at 93 cents per share, well ahead of the Street consensus forecast of 79 cents per share and compared to a pre-split tally of $1.24 share over the same period last year.