'The Big Short' investor Michael Burry says Elon Musk is selling Tesla stock to profit from its surge — and predicts this is the biggest bubble of his career

• Michael Burry said Elon Musk was selling Tesla stock to profit from its surge, not to raise cash.
• The "Big Short" investor noted that Musk had raked in cash and cut his tax bill in recent months.

Elon Musk isn't selling Tesla stock because he's short of cash; he just wants to capitalize on the automaker's eye-watering valuation, Michael Burry tweeted on Sunday.

"Let's face it. @elonmusk borrowed against 88.3 million shares, sold all his mansions, moved to Texas, and is asking @BernieSanders whether he should sell more stock. He doesn't need cash. He just wants to sell $TSLA," Burry said.

"Burry is a broken clock," Musk responded to the assertion on Twitter.

The investor of "The Big Short" fame said last week that Musk had taken out personal loans against his stock; he suggested the Tesla CEO might be selling shares to service those debts. Musk recently committed to selling 10% of his Tesla stock based on the results of a Twitter poll and cashed in nearly $7 billion worth of shares last week.

Burry's tweet highlighted that Musk had cut his tax bill by moving from California to Texas last year, sold most of his $100 million real-estate portfolio, and told Sen. Bernie Sanders on Sunday that he would sell more stock at the lawmaker's request. The investor's view is that Musk doesn't need cash but wants to profit from Tesla's stock price's rising nearly twelvefold since the start of last year.

Tesla and Scion Asset Management, which Burry runs, didn't immediately respond to requests for comment from Insider.

In a follow-up tweet on Sunday, Burry pointed to Tesla's stock chart and Musk's tweet that the stock price was "too high" when the electric-vehicle company's valuation was less than one-fifth of its current level. "Just think about it," Burry said.

It's worth noting both that Burry declared last December that he was short Tesla and that Scion held bearish put options on the stock as recently as June 30. The investor told CNBC last month that he was no longer betting against Musk's company, but that may have changed, especially as the 15% slump in Tesla's stock price last week was partly blamed on an Insider report highlighting Burry's theory about Musk's stock sales.

Burry has repeatedly described Tesla as emblematic of a massive asset bubble. He called its stock price "ridiculous" in December 2020, predicted at the start of this year that the shares would collapse like the mid-2000s housing market, and suggested the stock could plummet 90% like Amazon and other high-flying tech stocks did when the dot-com bubble burst.

Crypto, bubbles, and bonds

Burry said in a now deleted tweet on Sunday that he knew better than to bet against the cryptocurrency boom, suggested that assets are more overvalued today than they were during the dot-com or housing bubbles, and hinted that he's betting against long-dated government bonds.

"FWIW, I've never shorted any cryptocurrency," he said. "This is my third bubble, and the biggest. I've learned a thing or two. 30 year Treasuries on the other hand..."

Burry jokingly asked in a tweet in October how to short crypto, and he later told CNBC that the asset class was in a bubble — but he added that he saw value in blockchain and nonfungible tokens and had even dabbled in crypto by purchasing a few tokens.

The Scion chief's tweet suggested he might have taken a short position against 30-year Treasuries, likely because he expects soaring inflation to force the Federal Reserve to hike interest rates, driving down bond prices.

Read more: The founder of a Michael Burry subreddit explains 'The Big Short' investor's unique appeal — and reveals the stocks hidden in his tweets