The Real Reason Elon Musk Is Dumping Tesla Stock, According to ‘Big Short’ Investor

The hedge funder who predicted the 2008 Financial Crisis has a different theory about Elon Musk's recent erratic trading activities.

Elon Musk sold $5 billion worth of Tesla stock last week. Patrick Pleul/picture alliance via Getty Images

Elon Musk’s heavy sell-off of Tesla (TSLA) stock lately is scaring his investors. After dumping $5 billion worth of his Tesla shares last week, the CEO hinted over the weekend that he’s going to sell more—this time through a tweet directed at Bernie Sanders.

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“Want me to sell more stock, Bernie? Just say the word…” Musk tweeted Sunday morning in response to a Sanders’ tweet calling on “the extremely wealthy” to “pay their fair share” of taxes.

But whether it’s launching a Twitter poll, saying his stock options are expiring, or taking a jab at one of the nation’s most popular politicians, they are all excuses according to one keen Wall Street observer. What the world’s richest man is really doing is practicing the classic buy-low, sell-high mantra.

“Let’s face it. Elon Musk borrowed against 88.3 million shares, sold all his mansions, moved to Texas, and is asking Bernie Sanders whether he should sell more stock. He doesn’t need cash. He just wants to sell $TSLA,” hedge funder Michael Burry, best known for predicting the 2008 Financial Crisis and inspiring Michael Lewis’ bestseller-turned-film, The Big Short, wrote in a now-deleted tweet early Monday morning.

He also tweeted a chart of Tesla’s share price since its IPO in 2011 with an arrow pointing to May 2020 when Musk publicly said Tesla stock was “too high.”

Burry deleted his Twitter account in October (for the nth time) after warning about a cryptocurrency bubble in the making. He rejoined the social media site last week, perhaps to comment on the real motivations behind Musk’s busy trading activities.

In a now deleted tweet last week, Burry posted a link to an SEC filing in August showing that Musk had pledged about 88 million Tesla shares as collateral for personal loans as of June 30. Musk owns 193.3 million Tesla shares, representing 20.7 percent of the company. Currently 36 percent of that stake is put up as loan collateral. Burry suggested that the most urgent reason Musk needs to cash out some Tesla stock is to service these loans.

“Regarding what @elonmusk NEEDS to sell because of the proposed unrealized gains tax, or to #solveworldhunger, or … well, there is the matter of the tax-free cash he took out in the form of personal loans backed by 88.3 million of his shares at June 30th,” Burry tweeted on November 9, according to Business Insider. He has deleted all his tweets since then.

Burry is an active investor in the electric vehicle sector, but has never a big fan of Tesla. He has revealed stakes in Porsche, Volkswagen and 10 other automakers that are not Tesla.

Telsa shares fell more than 4 percent on Monday morning after Musk’s Twitter interaction with Sanders. At press time, it’s trading at $991.

The Real Reason Elon Musk Is Dumping Tesla Stock, According to ‘Big Short’ Investor