Michael Burry Builds A Bear Army With Tesla “Wildly Overvalued” Call

Quick Read

• Tesla (TSLA) trades at 294x trailing earnings and 192x forward earnings with a $1.43T market cap.

• Tesla’s net income fell 36.6% year-over-year to $1.37B despite 11.6% revenue growth.

• Michael Burry called Tesla ridiculously overvalued as operating margin compressed to 5.8%.

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Shares of Tesla Inc (NASDAQ: TSLA) slipped 1.2% to $424.98 on December 2, 2025, as retail investors rallied behind Michael Burry's latest call that the electric vehicle maker is "ridiculously overvalued." The famed investor's assessment ignited a viral discussion on Reddit's r/investing, where a post titled "Michael Burry Calls Out Tesla Stating They Are 'Ridiculously Overvalued'" exploded to 1,550 upvotes and 295 comments in under 24 hours. The sentiment score registered at 12, marking "very bearish" territory as traders increasingly question whether Tesla's $1.43 trillion market cap can hold.

Michael Burry Calls Out Tesla Stating They Are 'Ridiculously Overvalued' by u/[user] in investing

The Reddit discussion captured the retail investing community's growing skepticism. One top commenter observed: "Burry has been right before when everyone else was wrong. The Big Short wasn't a fluke." Another user added: "At 294x earnings, you're not buying a car company - you're buying a religion. And religions don't trade on fundamentals." A third pointed out: "The math is simple: Tesla would need to become more profitable than Apple and Google combined to justify this valuation."

The Valuation Math Behind the Bear Case

Burry's thesis finds substantial support in Tesla's fundamental metrics. The company trades at 294x trailing earnings and 192x forward earnings, multiples that dwarf traditional automakers by a factor of 30 or more. With a price-to-sales ratio of 14.96 and EV/EBITDA at 108, investors are paying extraordinary premiums for a business generating just 5.31% profit margins. The PEG ratio of 8.59 suggests massive overvaluation relative to growth, particularly troubling given that quarterly earnings declined 37% year-over-year in Q3 2025.

Reddit's investing community is connecting the dots:

• Net income fell 36.6% YoY to $1.37 billion despite 11.6% revenue growth

• Operating margin compressed to 5.8%, down from healthier levels a year ago

• Analyst consensus price target of $392.93 sits 9% below current levels

Trading Activity Reflects Growing Doubt

Tesla experienced extreme volatility through November, dropping 16.5% from $468 to $391 in three weeks before recovering to current levels. Insider activity tells a revealing story: while Elon Musk acquired 423.7 million shares in November (likely compensation-related), director James Murdoch disposed of 60,000 shares at $422.68 in September. The stock now trades 12% below its 52-week high of $488.54, with prediction markets showing upside price targets already achieved. Burry's call crystallizes concerns that have been building across retail forums for weeks, from Chinese robotics competition to political risks surrounding Musk's government involvement.

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