"At some point it has to fall to gravity," he said. "It's been trading on a different planet for years and now it has to trade on Earth."
Tesla shares are up 54% since the start of the year, but are near bear market territory, down 14% from its peak for the year on June 23. The company's stock fell 0.4% to $328.14 per share on Thursday morning.
But O'Leary is a fan of CEO Elon Musk is a modern day Michaelangelo.
"He is a genius - I can't say enough good things about what he does for all sectors that he gets involved in," O'Leary said. "I'm an investor and at the end of the day, I look at each opportunity to put money in harms way - one stock at a time and that's not a stock I own," he said.
O'Leary is also the Chairman of O'Shares ETF Investments.
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