Michael Burry isn’t afraid to share his opinion, and he certainly doesn’t shy away from interesting, alternative, and controversial explanations and analyses.
For example, Burry’s take on why Elon Musk is suddenly interested in selling some of his stock in Tesla the past week or so.
Two big stories emerged in the past week. One was how Musk would be willing to liquidate $6 billion of his shares to help with the world hunger crisis, providing the UN can show him exactly how that money would make a difference.
The second was his Twitter poll over the weekend, where Musk was essentially asking his followers to become his financial advisor. He wanted to know if he should sell 10% of his holdings, with the premise that he was feeling the heat from the talk of a “billionaire’s tax” Congress was kicking around for the uber-rich.
Well, in an Insider story Tuesday, Burry proposed a different reason why Musk might be so interested in selling stock now.
To pay off the massive personal loans, he backed with Tesla stock.
Here’s precisely what Burry tweeted.
“Regarding what @elonmusk NEEDS to sell because of the proposed unrealized gains tax, or to #solveworldhunger, or … well, there is the matter of the tax-free cash he took out in the form of personal loans backed by 88.3 million of his shares at June 30th.”
Here’s the back story. In the tweet, Burry also posted a link to an SEC filing this past August, which shows Musk used 88 million shares of his Tesla stock as collateral for personal loans. At the time, that translated into 36% of his total stake of Tesla shares he owns.
If you’re wondering why he would be borrowing so much money where it tied up that much stock? According to a report by ProPublica, that is how some of the world’s wealthiest people minimize their tax burdens – by borrowing against their stock.
It sure seems more exciting and full of drama when Musk does it instead of a Walton heir.