Investor's Corner
Tesla’s 3rd-largest shareholder discusses legacy auto’s ‘Kodak moment’
Amidst Tesla’s continuous rise, its disruption of the car industry is becoming more prevalent. This point was reiterated recently by a major Tesla shareholder, who noted that legacy automakers, with their decades of experience, might be facing their very own “Kodak moment.”
In a recent statement to Morningstar UK, Baillie Gifford manager Iain McCombie remarked that Tesla’s immense growth and potential remains remarkable. McCombie noted that despite short-term noise about Model 3 production, volume is beginning to come through, as evidenced by the company’s pleasantly surprising third-quarter results. The Baillie Gifford executive added that Tesla had already surpassed Daimler’s car sales in the US — a feat that seemed impossible just a few years ago.
“Now, Daimler’s been in the market for 100-plus years and here’s this upstart and they’re outselling them in the US. If you’d said that a few years ago, you’d probably have been locked up, but that’s happening,” he said.
While McCombie admitted that Baillie Gifford might be wrong about its optimistic outlook on Tesla, the finance veteran stated that at this point, it is legacy automakers that are currently feeling the pressure. With the success of Tesla and the apparent strong demand for electric vehicles, veteran carmakers are at risk of losing a core part of their business — the internal combustion engine. McCombie noted that this is reminiscent of what Kodak faced during the advent of the digital camera.
“They spent hundreds of years building up their know-how in industrial combustion engines, and they do a great job with that, but what happens if all of us are suddenly saying ‘oh, I want an electric car’? Suddenly, that know-how is useless. What happened with Kodak is they actually discovered the digital camera, but they buried it because it was too frightening for them. They thought it would kill their film business. But the fact that they didn’t innovate killed Kodak,” he said.
Faced with their very own “Kodak moment,” the Baillie Gifford manager stated that veteran carmakers, at least for now, remain centered on their legacy products. Amidst a market that is changing its preference, though, traditional auto is running the risk of being pushed out during the transition.
“Maybe they are launching electric vehicles, but the bulk of their sales are still coming from legacy products. They’ve built wonderful businesses for themselves, but what happens when the business is changing? That’s why your Tesla is exciting, because they don’t have those legacy issues,” McCombie said.
Baillie Gifford is among Tesla’s largest shareholders, third only to Elon Musk and T. Rowe Price. As of September, Baillie Gifford held a 7.8% stake at the electric car maker.
The absence of compelling electric vehicles from Tesla’s competitors was a key driver for some skeptics when they changed their stance on the company. Ahead of Tesla’s third-quarter earnings call, for one, Andrew Left of Citron Research, one of the electric car maker’s most vocal critics, turned bullish on the company, citing the dominance of the Model 3 in the US passenger car market. Left also noted that there is no “Tesla Killer” coming from rival automakers.
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- The Jaguar I-PACE.
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- The new Mercedes-Benz EQC – the first Mercedes-Benz under the product and technology brand EQ. With its seamless, clear design, the EQC is a pioneer for an avant-garde electric look with trailblazing design details and colour highlights typical of the brand both inside and out. [Credit: Mercedes-Benz]
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- The Audi e-tron. (Credit: Audi)
Brad Cornell, a hedge fund manager who believes that Tesla is overvalued, recently admitted that he had overestimated the company’s competition as well. Cornell admitted that in his past analyses and forecasts, he did not expect Tesla’s competition to roll out electric vehicles in such a slow manner. Apart from this, Cornell noted that legacy auto’s entries into the zero-emissions market have been largely uninspired. As such, vehicles like Teslas, which are green, attractive, and powerful, are becoming the EVs of choice for customers looking to buy an electric car.
“One thing I did not evaluate accurately when I began constructing valuation models for Tesla in early 2014 was how slow the competition would be to produce electric cars that people would want to drive. Tesla competitors, to the extent that any appeared, seemed to be saying that the point of an electric car was to be green and efficient, not sexy or exciting. Only Tesla had the design, the pizzazz, and the performance to make driving special and not a chore.
“My mistake in 2014 was thinking that competition for Tesla was just around the corner. Now, at the end of 2018, it is still just around the corner. Although Jaguar has been promising the I-PACE for some time, my visits to dealers have been rewarded only with promises. The same is true for the Porsche Taycan. There is not a meaningful Tesla competitor available today or in the near future,” Cornell said.
Tesla, for its part, continues to move forward. In Elon Musk’s recent interview with Kara Swisher at the Recode Decode podcast, the Tesla CEO stated that Tesla would be cash-flow positive in all quarters moving forward. Musk was also optimistic about Model 3 production, stating that Tesla is currently capable of producing 6,000-6,500 units of the electric sedan per week, though it would require employees to do a lot of overtime.
Tesla short sellers won big following the company’s massive fall on Wall Street after it reported subpar Earnings on Wednesday.
Tesla short sellers collected about $4.12 billion in single-day profits on Thursday, according to Bloomberg. Shares fell as much as 15 percent during Thursday’s session. It closed as one of the worst days for Tesla on Wall Street in the past three years.
Investors sold off the stock after Tesla said it would aggressively direct its spending toward AI and its Optimus robot project. The company had record revenues, which were driven by one of the strongest quarters in terms of vehicle deliveries in company history.
However, it missed EPS estimates by reporting just $0.33, a far cry from the $0.53 analysts expected.
S3 Partners reported that about 3 percent of Tesla’s outstanding stock is sold short. Managing Director at S3, Ihor Dusaniwsky, provided the short seller’s potential profit, as well as another figure: shorts have likely had paper gains of $8.92 billion this year, as Tesla shares are down 30 percent in 2026.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Tesla has burned short sellers many times in the past, but the company’s latest Earnings Call was a chance for those skeptics to taste some payback. Although the company gave some very transparent information regarding future projects, the rollout of Robotaxi, Optimus, and Semi, many investors took their profits on Thursday.
Notable short sellers like Michael Burry have been transparent about their skepticism around Tesla shares. Burry just revealed three weeks ago that he had opened up a new short on the stock, stating he shorted Tesla shares at $416.22. “Happy it jumped back to this level,” he said in a blog post.
At the time of publication, Tesla shares were down about 3 percent and the stock was trading at $309.92.
Tesla stock (NASDAQ: TSLA) endured one of its sharpest single-day declines in years on July 23, tumbling approximately 14.5 percent and closing near $320 after opening the session around $374. The drop erased more than $140 billion in market value amid heavy trading volume and left the shares at multi-week lows.
The sell-off followed the company’s second-quarter 2026 results, released the previous evening. Tesla reported record revenue of $28.2 billion, up 26 percent year over year, driven by a Q2-record 480,126 vehicle deliveries. Energy storage deployments also rose strongly.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Yet profitability disappointed sharply. Operating income fell 57 percent to $398 million, compressing the operating margin to just 1.4 percent. Non-GAAP earnings per share came in at $0.33, well below the roughly $0.53 analysts had expected. Free cash flow turned negative by $1.1 billion as capital expenditures surged 142 percent to $5.8 billion, largely tied to accelerated spending on artificial intelligence, robotics, and autonomous systems.
The losses on capex were expected, as Tesla said it would be spending heavily in 2026.
Investors also reacted to lingering uncertainty surrounding key product timelines. During the Earnings Call, management reiterated ambitions for Robotaxi deployment and the Optimus humanoid robot, but offered limited new concrete milestones, renewing questions about execution pace that have long accompanied Tesla’s ambitious roadmap.
The magnitude of the decline places it among Tesla’s more severe one-day percentage losses since its 2010 initial public offering. Historically, the two largest single-day drops (split-adjusted) remain September 8, 2020, when shares fell 21.1 percent amid broader market volatility and valuation concerns, and January 13, 2012, with a 19.3 percent plunge during the company’s early growth struggles.
Other notable declines include an 18.6 percent drop on March 16, 2020, at the onset of pandemic-related market turmoil. Thursday’s move ranks roughly ninth on the all-time list but stands out as the steepest in more than a year.
Despite the short-term pain, Tesla’s long-term trajectory has repeatedly recovered from such volatility. The latest results underscore both the strength of its core automotive and energy businesses and the near-term costs of heavy investment in next-generation technologies.
In a striking revelation that underscores the lucrative crossover between Big Tech and space exploration, Alphabet Inc., Google’s parent company, disclosed a massive $94.1 billion equity stake in SpaceX following the rocket company’s blockbuster initial public offering earlier this year.
The disclosure came in Alphabet’s quarterly filing, marking the first time the long-held private investment has been publicly valued at market prices. Google was an early backer, investing alongside Fidelity in 2015 with roughly $500-900 million at a time when SpaceX was valued around $12 billion.
That bet has delivered extraordinary returns, roughly a hundredfold, transforming a strategic play on satellite internet and launch capabilities into one of Alphabet’s largest assets.
Google, $GOOGL, has said they hold $94 billion in SpaceX, $SPCX, shares after IPO.
— unusual_whales (@unusual_whales) July 23, 2026
Of the total holding, approximately $80 billion remains subject to short-term post-IPO lockup restrictions, preventing near-term sales. An additional $14.1 billion faces longer-term restrictions, extending into the third quarter of 2027. This structure limits immediate liquidity but protects against market volatility as SpaceX transitions into public trading.
The SpaceX position contributed significantly to gains in Alphabet’s broader investment portfolio, which also includes a major stake in AI leader Anthropic. Combined, these holdings helped drive nearly $100 billion in investment gains during the second quarter, providing a substantial boost to net income amid ongoing AI spending pressures.
Analysts view the disclosure as validation of Alphabet’s venture strategy beyond its core search and cloud businesses. The investment aligns with deeper ties, including reported multi-billion-dollar deals for AI computing capacity on SpaceX infrastructure. As SpaceX advances Starship flights, Starlink expansion, and ambitious Mars goals under Elon Musk, Google’s stake positions it to benefit from the commercialization of space.
For Alphabet, the windfall highlights how patient, forward-looking bets in transformative sectors can yield outsized rewards. While lockups temper short-term impact, the holding cements SpaceX as a cornerstone of Alphabet’s diversified portfolio in an era where aerospace, AI, and connectivity increasingly intersect. Investors will watch closely as restrictions lift and SpaceX’s public performance unfolds.
Tesla’s Supercharger Diner probably just secured more locations
Tesla short sellers win big after shares fall after earnings
