Whitney Tilson ‘Capitulates’ On Shorts; Compares TSLA To NFLX
The following post is from an email which Whitney Tilson sent to investors. It appears that Tilson has thrown in the towel on shorts – he also discusses HHC and compares and contrasts TSLA and Netflix, Inc. (NASDAQ:NFLX).
Whitney Tilson
1) Howard Hughes Corp (NYSE:HHC) (HHC) has been my largest position for a few years and I bought more recently after it pulled back due to concerns about the possible impact that the decline in oil prices might have on the company’s two properties in Houston. Blogger and analyst Todd Sullivan did a nice job addressing this in particular and, I general, showing how cheap the stock is in the attached presentation that he gave last week at the Boys and Girls Harbor conference.
2) Last week, I sent this email to some friends comparing Netflix and Tesla (neither of which I have a position in):
Amazing how similarly TSLA is playing out so far just like NFLX did.
We shorted NFLX well below $100 and watched it skyrocket to nearly $200, at which point we re-evaluated our short thesis and decided the business and management were far superior to what we’d initially thought and thus decided it was a bad short and covered.
We felt very smart as the stock soon skyrocketed to over $300 – and then felt like total idiots as everything we’d predicted in our short thesis came true and the stock just as quickly collapsed to under $100 (finally bottoming at ~$53).
But having developed an appreciation for the business by being short it, we figured out how cheap it was at the bottom, bought it, and it turned into our most successful investment ever, returning nearly 9x in 18 months!
With TSLA, I was dumb enough to short it in the mid-$30s, took enormous pain until I FINALLY realized it was a bad short and covered at $205. It sure felt like the right move as the stock continued to rocket until nearly $300, but now the stock is back to $202.88....MORE
