“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Michael Burry, who last month deregistered his hedge fund Scion Asset Management, wrote in a post on a newly launched Substack account.

Burry said Tesla dilutes its shareholders at an estimated rate of 3.6% per year thanks to the stock-based compensation it awards employees without buybacks to offset the impact. Musk’s gargantuan compensation would make matters worse, he added. 

The 2025 pay plan, overwhelmingly approved by shareholders last month, could give Musk at least tens of millions of additional Tesla shares that could further dilute existing shareholders’ holdings. At the high end, Musk would receive hundreds of millions of shares that would raise his Tesla stake to 29% from a current 15%, as long as he meets rigorous goals.

Yet by reaching two of the more achievable goals needed to unlock his pay, Musk could potentially benefit more than the shareholders who have backed him, reported Fortune’s Shawn Tully.

The company’s stock was trading at about $426 Monday, down less than 1% after Burry’s blog post was published, but still up more than 6% year to date on the rebound from a major stock slump earlier in the year. 

Apart from Tesla’s being overvalued, Burry also took a shot at the company’s superfans, saying Tesla’s top priority is a moving target.

“As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots—until competition shows up,” the legendary investor said.

Tesla did not immediately respond to Fortune’s request for comment. 

Still, Burry’s stance is not the consensus among Wall Street. Despite his bearish predictions, about three-quarters of analysts have a buy or hold rating on Tesla.

After Tesla shareholders approved Musk’s pay package last month, Tesla bull Dan Ives and his team at Wedbush Securities reaffirmed their support of the CEO and his vision for the company.

Correction, Dec. 2, 2025: A previous version of this article misstated Burry’s position on Tesla stock. He did not announce a short bet.