Finance, US News, Wall Street

Michael Burry Reveals Massive Tesla Short, Huge Inflationary Bet

Michael Burry Reveals Massive Tesla Short, Huge Inflationary Bet

Today is the deadline for 13F filings and while we already know what most of the marquee hedge funds have done during the quarter thanks to previously leaked investor letters (with the notable exception of the Soros Family Office which we learned over the weekend bought some $375MM of the Archegos shares liquidated by its prime brokers in late March), one filing was of particular interest, that of Scion Asset Management’s Michael “Big Short” Burry. And boy were there surprises.

First, there is not even a trace of Burry’s previous interest in Gamestop or any other “Reddit” stocks: it’s safe to assume that all profits there were monetized long ago. In fact, a comparison to Burry’s Q4 2020 13F reveals huge turnover, with just 8 of the fund’s legacy 23 positions as of Dec 31 still on Scion’s Books.

Turning to Burry’s new positions in the first quarter (whose long value according to EDGAR was $1.35 billion as of March 31 which includes a substantial amount of calls expressed as delta-equivalent share positions), we find quite a few surprises, starting with a massive Put position in Tesla, where Burry has purchased puts covering some 800,100 TSLA shares, whose notional equivalent value is just over $530 Million, making it not only his biggest position but also roughly equivalent to 40% of his entire portfolio in nominal terms.

The next thing that jumps out is Burry’s substantial bullish bet on FAAMG giants Alphabet and Facebook, where Scion now owns a little over $160 million in Call premium, or an equivalent of 80,000 shares of GOOGL and 550,000 shares of FB.

Other notable new sizable positions include calls in CVS and Netapp; Burry also doubled his existing Call position in Kraft Heinz where he owns a total of 1.174MM share equivalents via calls. Burry also added to his exposure in energy and financials, including Occidental, Precision Drilling, tanker company Scorpio Tankers, drybulker Genco Shipping, and several biotech/pharma names such as Zymeworks, Marinus Pharma, and Aerpio Pharma.

But perhaps what is most remarkable, along with Burry’s huge Tesla bearish bet, is his aggressive positioning for a surge in inflation (as a reminder, it was Burry back in February warned that Weimar hyperinflation is coming), which he is trading as follows:

  • PUT on the TLT 20+ Year TSY bond ETF, equivalent to some 1.266MM shares or $171.5 million
  • CALL on the TBT 20+ Year Treasury Ultrashort ETF, equivalent to 2.536MM shares or $55.1 million
  • CALL on the TTT 20+ Year Treasury Ultrashort ETF, equivalent to 100K shares or $4.6 million
  • CALL on the 3x levered TMV 20Y Treasury Bear ETF, equivalent to 38,400 shares or $3.1 million
  • Outright long in the TBT 20Y Treasury Ultrashort ETF, amounting to 300,000 shares or $6.5 Million.

To summarize: Burry sees lots of downside in Tesla,  upside in Alphabet and Facebook, and is betting on a surge in Treasury yields.

The table below summarizes the latest Scion 13F, with new positions in green, and reductions to existing positions in red.

Tyler Durden
Mon, 05/17/2021 – 13:20

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