/ December 2, 2025 The investor who famously predicted the 2008 housing market collapse, Michael Burry, has issued a stark new warning, this time targeting electric vehicle giant Tesla. In his investment newsletter, the man immortalized in “The Big Short” dissects the automaker’s valuation, raising specific concerns about shareholder dilution linked to CEO Elon Musk’s unprecedented compensation plan. This critique forces investors to question whether turbulent times are ahead for the stock or if the star investor is mistaken once again. The Core Concern: Shareholder Dilution and a $1 Trillion Package Burry’s analysis, published in his “Cassandra Unchained” newsletter, leaves little room for ambiguity; he labels Tesla as “ridiculously overvalued.” His central thesis focuses on what he describes as the gradual erosion of shareholder equity. According to Burry’s calculations, investor ownership is being diluted at an annual rate of approximately 3.6%, a process the company is not countering with share buybacks. This situation is poised to intensify dramatically due to the recently approved compensation package for Elon Musk. Burry warns that this record-breaking plan, valued at $1 trillion, will significantly accelerate the dilution. Musk could potentially receive up to 12% of all Tesla shares over the next decade if the company hits specific performance milestones. A glance at key metrics underscores the basis for Burry’s skepticism. Tesla currently trades at 209 times its expected earnings, a stark contrast to the S&P 500’s price-to-earnings multiple of 22. With a market capitalization of $1.4 trillion, Tesla is valued at more than five times that of Toyota, despite the Japanese automaker remaining the world’s largest by sales volume.