The Big Short Guy Made a Massive Bet Against Elon Musk

Magna International could be an ideal bet in the EV space as Elon Musk and Tesla face a big bet from Michael Burry.

| More on:

Michael Burry is a name that most investors, if not all, know well. Famously known as the Big Short guy, he is an investor who earned his reputation for making billions off his bets against mortgage securities during the financial crisis in 2008. While staying out of the headlines for most of the time since the financial crisis, Michael Burry is making big moves again.

According to a recent regulatory filing, Michael Burry’s company, Scion Asset Management, owned bearish puts against 800,100 shares of none other than Elon Musk’s Electric Vehicle (EV) company, Tesla, giving Michael Burry the right to sell Tesla shares on or before an unidentified date in the future.

Today I will discuss the bet on Tesla and a Canadian stock that you can consider if you want to capitalize on the growing EV space.

This is not the first bet against Tesla

Michael Burry tweeted in December that his firm was short on Tesla shares. The hedge fund manager also advised Elon Musk to sell shares to raise capital when his EV stock was on a torrid run from its pandemic lows. However, Michael has since deleted his tweet, and Tesla earned record-breaking profits in the first quarter.

The company improved its manufacturing operations and made substantial money off of Bitcoin. TSLA is down by almost 20% on a year-to-date basis at writing. While it’s unclear when Michael Burry made the bearish put, the move has likely been profitable for the Big Short guy.

A Canadian EV bet to consider

Regardless of what is currently happening for Tesla, EVs are now picking up the momentum. Major automotive markets like the U.S., Europe, and China are focusing their attention on EVs. The EV industry will play a critical role in reducing greenhouse gas emissions. The EV automotive sector is growing worldwide, and a Canadian EV play could be ideal for you to consider adding to your portfolio today.

A top TSX EV stock

Magna International (TSX:MG)(NYSE:MGA) could be the ideal EV stock for your investment portfolio if you are bullish on the EV automotive sector. While the stock is not as volatile as tech or automotive stocks, it’s not as resilient as a dividend stock.

Magna stock surged by over 150% between January 2011 and 2020, before the pandemic struck and the EV sector gained momentum. Its decade-long growth over the last decade represents an average of 10% growth per year.

Magna International is trading for $115.94 per share at writing. Its current valuation represents a 111% growth in the last 12 months alone. The stock covered an almost decade-long growth within a year.

Foolish takeaway

Whether Michael Burry’s bet against Tesla bears fruit for the Big Short guy remains to be seen. As far as the EV space is concerned, investors can count on the industry to become increasingly popular in the coming years. If you’s looking to capitalize on the sector’s growth, Magna International could be an ideal stock to consider right now.

It is in a high-growth phase right now and could be worth grabbing its shares before it slows down to normal growth. Magna could be the ideal pick to play the EV space to enjoy wealth growth while protecting your capital.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Magna Int’l.

More on Investing

ETF stands for Exchange Traded Fund
Investing

Passive Income Investors: This TSX Fund Has a 7.6% Yield With Monthly Payouts

Here's all you need to know about the Canoe EIT Income Fund (TSX:EIT.UN)

Read more »

stock research, analyze data
Tech Stocks

Apple vs. Shopify: Which Stock Is the Better Buy for the Next 3 Years?

Apple (NASDAQ:AAPL) and Shopify (TSX:SHOP) are great tech titans, but they're ending the year with huge momentum.

Read more »

Investor reading the newspaper
Dividend Stocks

Emerging Investment Trends to Watch for in 2025

Canadians must watch out for and be guided by emerging investment trends to ensure financial success in 2025.

Read more »

RRSP Canadian Registered Retirement Savings Plan concept
Dividend Stocks

Watch Out! This is the Maximum Canadians Can Contribute to Their RRSP

We often discuss the maximum TFSA amount, but did you know there's a max for the RRSP as well? Here's…

Read more »

nvidia headquarters with grey nvidia sign in front with nvidia logo
Tech Stocks

If You’d Invested $100/Month in Nvidia Starting a Decade Ago, Here’s How Much You’d Have Now

Nvidia has helped long-term investors create generational wealth. But is the tech stock still a good buy right now?

Read more »

chart reflected in eyeglass lenses
Tech Stocks

Is Shopify Stock a Buy, Sell, or Hold for 2025?

Shopify (TSX:SHOP) still looks like a tempting growth stock going into a new year with strength.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

Outlook for Fortis Stock in 2025

Fortis stock is up 10% in 2024. Are more gains on the way?

Read more »

Canadian energy stocks are rising with oil prices
Dividend Stocks

3 Low-Volatility Stocks for Cautious Investors

As uncertainty grips the market, here are three low-volatility stocks you can buy and hold with confidence.

Read more »