Tesla shares dropped again on Monday, edging down nearly 4 percent as against a marginal 0.3 percent drop in the S&P 500 index and 0.5 percent fall in the Dow Jones Industrial Average.
Despite recording record profits in the first quarter, the company's stock has been on a falling streak. After hitting an all-time high of $883 by the end of January, the stock has now lost as much as 35 percent since then.
What is distracting investors? Some analysts say Elon Musk's all too frequent interventions in the fate of cryptocurrencies like bitcoin and dogecoin could be a factor.
Tesla Plunged 32% After Declaring Bitcoin Investment
It was in February that Tesla said it had invested $1.5 billion in Bitcoins. But since then, the electric car maker plunged 32 percent even as the Nasdaq Composite edged down only about 4 percent.
That has not stopped Musk from pushing himself into the center of things when it comes to the fate of cryptocurrencies. Last week, he said Tesla will not accept bitcoin for payment, going back on a promise that the car maker would do so. He said this as he expressed concerns over the environmental impact of bitcoin mining. The dramatic turnaround sent bitcoin plunging 15 percent.
Musk then followed up with a statement that he might sell Tesla's $1.9 billion bitcoin stake, sending bitcoin further down again.
But alongside, the bitcoin decline, Tesla stock is also going south.
Michael Burry's Prediction
Now it has emerged that a Wall Street investor who is known for making eerily uncommon bets has predicted a plunge in Tesla's stock in the near future. Bloomberg reported that Michael Burry, who made billions from bets against mortgage securities during the financial crisis, believes Elon Musk's Tesla Inc shares would crash.
The report says that Burry's Scion Asset Management has bearish puts against 800,100 shares of Tesla. Scion now has the right to sell Tesla shares on or before an unidentified date in the future.
According to calculations derived from a regulatory filing on Monday, Scion's Tesla puts are worth $534 million.
Many People Are Skeptic on Tesla
Burry's position might have been a smart call, analysts believe. "Tesla is down 14% since the end of the first quarter, so on balance, these puts have been profitable, though it's impossible to know for sure ... He's expressing the type of skepticism that many have on Tesla. I would have to believe that he accumulated various Tesla options at various strikes, and some of them probably have expired," said Steve Sosnick, chief strategist at Interactive Brokers LLC, according to Bloomberg.
Tesla, which makes electric cars, battery energy storage from home to grid-scale, solar panels and solar roof tile, and other similar products, reported record earnings in April, only to see the shares drop since then. Analysts believe that the company's failure to make a specific vehicle delivery estimate for 2021 may have been one reason.
Interestingly, in December last year, when Tesla stock was in the middle of a year-long rally that eventually led to a whopping 700 percent gain, Burry had advised Musk to sell the stock which, according to him was at 'ridiculous' levels.