Tesla Valuation Ignores Heavy Dilution As Musk’s Trillion Dollar Pay Plan Signals More Share Erosion, Michael Burry Warns

Benzinga

Michael Burry warned that Tesla’s valuation ignores the long-term damage from stock-based compensation, which he says dilutes shareholders by 3.6% annually with no buybacks to offset it. He argued Musk’s $1 trillion pay package guarantees further dilution and criticized companies like Tesla, Palantir, and Amazon for excluding stock comp from adjusted earnings. Burry highlighted these risks as part of his broader view that AI stocks are in a bubble.

Transcript

00:00It's Benzinga, bringing Wall Street to Main Street.

00:03Michael Burry warned that Tesla's valuation is too high because investors underestimate the

00:07long-term cost of stock-based compensation and the dilution it creates, according to CNBC.

00:13Burry said, Tesla dilutes shareholders by 3.6% each year and does not offset the impact with

00:18buybacks. He argued that the vote approving Elon Musk's $1 trillion compensation package

00:24ensures further dilution and present value destruction for shareholders.

00:28Burry said companies like Tesla, Palantir, and Amazon penalize investors when they exclude

00:34stock-based compensation from adjusted earnings. Burry launched his $379 per year substack

00:40Cassandra Unchained after deregistering Scion Asset Management, focusing on why he believes

00:46artificial intelligence is a bubble. For all things money, visit Benzinga.com.

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