Same.*
From Business Insider, Oct 21, 2024:
- The famed short-seller Carson Block said he wouldn't bet against Elon Musk's Tesla.
- He argued that the EV maker's sheer size gave it a strong capital base that could weather turmoil.
- "Elon pulls rabbits out of the hat constantly," he said, adding, "I just won't bet against Elon."
Carson Block, known for his shrewd short bets against companies, says he won't bet against Tesla.
The famed Muddy Waters investor said he concluded in 2021 that shorting Tesla was a fool's errand. He said he realized the company's capital base was its safety net.
"What all of the bears missed" was that Elon Musk "understood that the scale he needed to have was capital base," Block told Bloomberg TV on Monday. "And so when he was able to yoke that stock price way up and have this enormous market cap — I mean, even if the company is bleeding billions of dollars and the stock is sinking, there's so much market cap that he can continue to raise money."
It's an about-face for Block, who said he had bet against Tesla in the past. He told Bloomberg that several years ago his firm held long-dated puts on Tesla designed to capitalize on a share-price drop that nearly materialized.
"It is a volatile stock, but, you know, it continues to get flows," Block said, adding: "Tesla's not going bankrupt for a very long time. And that's what the bears missed, because the bears were hung up on this 'Oh, it bleeds money, it's going to go bankrupt.'"....
As I try to remember how to work a slide rule (dad, what's a slide rule?) to figure the price equivalent on the pre-split stock here is ZeroHedge.......Let's see, take the $953 pre-market top-tick, move this thing to the left, squint to see the line and that's $4765 on the old stock. It came public at $17.
And for just about that entire time we've been saying "Don't short Tesla".
Not because of any deep insight into the technology, though we're better than the average analyst in an autodidactic sort of way, or because we know what's inside Elon Musk's head but rather, because we've been following the stock on the blog since before the IPO and realized, almost out of the gate, that this was a cult stock. And cult stocks can destroy short sellers.
Here's a repost from January 2020 (the FinViz chart is set to update the last twelve months, daily):
....the darn thing is approaching verticality.
Why We Don't Short Tesla: The stock is up 16% On The Day (TSLA)
April 22, 2013
Tesla Motors Trades At All-Time High (TSLA)
The stock is at $49.75, up 4%, after trading as high as $50.19.August 2015
The thing to remember with all-time highs is there is no overhead supply, no shareholders thinking "As soon as I get to breakeven I'm getting out"....
Short Selling and The Information Embedded In The Cost To Borrow Stock (TSLA)
August 2016
...For the longest time we had a Don't Short Tesla policy because it showed signs of being a cult stock and cult stocks can kill shorts. Plus it can be very hard to locate stock and very expensive to borrow when you do,
Morgan Stanley Gives a $465 Target For Tesla, Stock Jumps 5%...
We've publicly shorted Tesla twice on the blog, both times worked out because nothing like this happened during the holding period.However, after the SolarCity deal and Elon's purchase of SCTY debt (on top of his SpaceX buying SCTY debt) I'm more open to betting against the company, at least tactically if not to zero.
For the most part this April 2013 headline is operative "Why We Don't Short Tesla: The stock is up 16% On The Day (TSLA)". That was at $44.00, up $6.11.
Recently $255.30 up $12.15.
Morgan Stanley was one of the firms that sold the recent half-billion stock offering....
Remember, your mileage may vary, close cover before striking etc.
June 2017
"Einhorn Compares GM to Apple and Explains Why He’s Short Tesla" (TSLA; GM)
...It is just so dangerous to put valuation (as compared to fraud) shorts on in a bull market.Finally, if you do short, don't be this guy (no, seriously, don't be this guy):
We have had a general rule, "Don't short Tesla" virtually since the IPO, that we've violated on three occasions, fortunately profitable but it is tough to tell if it was worth the risk.
