Investor's Corner
Tesla bulls respond to ‘The Big Short’ and his massive bet against the stock
Tesla (NASDAQ: TSLA) bulls are responding to “The Big Short” Michael Burry’s massive bet against the electric automaker’s stock, indicating that their beliefs don’t align with the man who correctly predicted the 2008 collapse of the housing crisis.
Yesterday, a 13-F Filing with the SEC revealed that Burry has puts against over 800,000 shares of Tesla. The details of the puts, like value, strike price, or expiry, are unknown, and the filling only details the number of shares that Burry has puts against.
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However, Tesla bulls like Gene Munster of Loup Ventures and Pierre Ferragu of New Street Research aren’t aligning with Burry’s consensus on the stock.
Burry believes that Tesla’s stock is highly reminiscent of the housing market in 2007, just a few months before the crash that led to the first recession in the American economy in twenty years. The previous economic downfall occurred in 1987 when “Black Monday” struck, and stock markets around the world fell apart. Burry has told Tesla investors to “enjoy it while it lasts” and notes that the housing bubble also gained massive value in 2007 before falling apart in September 2008.
Betting against Tesla stock is a risky option, Munster believes. Tesla shares increased in value by over 700% last year, and while 2021 hasn’t yielded the same results, Munster’s analysis reveals that things like tax credits for owners can only lead to bullish outlooks for the automaker’s stock.
Munster believes the reintroduction of a $7,000 EV tax credit could be one of the biggest pieces of the bull story for Tesla in 2021. “In my view, it should be part of the bull thesis,” Munster said to CNBC’s Squawk Box. “I don’t think we’re at anything close to ending these tax credits. They will likely get restarted again for Tesla owners.”
Tesla lost its ability to offer a $7,000 EV credit after it surpassed the 200,000 vehicle threshold years ago. GM is the only other automaker to achieve this and have the tax credit expunged from its purchases, mostly due to the popularity of the Chevrolet Bolt EV.
Munster also reminds those who are focused on Tesla’s sub-par 2021 run that the stock is up considerably over the past twelve months. “The stock is still up a lot over the past year. It was $160 twelve months ago.”
Meanwhile, other bulls, like Pierre Ferragu, didn’t comment directly on Burry’s opinions of Tesla stock but did state that the “return on operating assets” is Tesla’s “bullet-proof metric.”
“We hear a lot of comments about Tesla’s profitability (or lack thereof),” Ferragu writes. “They usually happily mix considerations about gross margin, segment results, exceptional or financial items, regulatory credits…and rarely make any sense. Tesla builds factories to manufacture cars and sells them. As a result, the only appropriate way to evaluate its operational profitability is to look at cash return on operating assets: out of a dollar of assets immobilized in the group, how much cash can Tesla generate in one year.”
Ferragu says Tesla broke even in Return on Assets in 2018, and in 2020, the company got a 20% cash return. He sees this increasing to 40% in 2023 as new factories in Germany and Texas will increase Tesla’s cash generation as the Return on Assets continues to improve.
NEWS: New Street Research analyst, Pierre Ferragu sees Tesla in the league of TSMC when looking through lens of Return on Operating Assets. Return on Assets broke even in 2018 & is 20% in 2020. This is the bullet-proof metric & he says Tesla will have a 40% cash return in 2023. pic.twitter.com/ZNsiPi3OLC
— Sawyer Merritt ?? (@SawyerMerritt) May 18, 2021
At the time of writing, Tesla shares were trading at $589.44, up 2.16%.
Disclosure: Joey Klender is a TSLA Shareholder.
Investor's Corner
Tesla wins $508 price target from Stifel as Robotaxi rollout gains speed
The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Tesla received another round of bullish analyst updates this week, led by Stifel, raising its price target to $508 from $483 while reaffirming a “Buy” rating. The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Robotaxi rollout, FSD updates, and new affordable cars
Stifel expects Tesla’s robotaxi fleet to expand into 8–10 major metropolitan areas by the end of 2025, including Austin, where early deployments without safety drivers are targeted before year-end. Additional markets under evaluation include Nevada, Florida, and Arizona, as noted in an Investing.com report. The firm also highlighted strong early performance for FSD Version 14, with upcoming releases adding new “reasoning capabilities” designed to improve complex decision-making using full 360-degree vision.
Tesla has also taken steps to offset the loss of U.S. EV tax credits by launching the Model Y Standard and Model 3 Standard at $39,990 and $36,990, Stifel noted. Both vehicles deliver more than 300 miles of range and are positioned to sustain demand despite shifting incentives. Stifel raised its EBITDA forecasts to $14.9 billion for 2025 and $19.5 billion for 2026, assigning partial valuation weightings to Tesla’s FSD, robotaxi, and Optimus initiatives.
TD Cowen also places an optimistic price target
TD Cowen reiterated its Buy rating with a $509 price target after a research tour of Giga Texas, citing production scale and operational execution as key strengths. The firm posted its optimistic price target following a recent Mobility Bus tour in Austin. The tour included a visit to Giga Texas, which offered fresh insights into the company’s operations and prospects.
Additional analyst movements include Truist Securities maintaining its Hold rating following shareholder approval of Elon Musk’s compensation plan, viewing the vote as reducing leadership uncertainty.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Investor's Corner
Tesla receives major institutional boost with Nomura’s rising stake
The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Tesla (NASDAQ:TSLA) has gained fresh institutional support, with Nomura Asset Management expanding its position in the automaker.
Nomura boosted its Tesla holdings by 4.2%, adding 47,674 shares and bringing its total position to more than 1.17 million shares valued at roughly $373.6 million. The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Institutional investors and TSLA
Nomura’s filing was released alongside several other fund updates. Brighton Jones LLC boosted its holdings by 11.8%, as noted in a MarketBeat report, and Revolve Wealth Partners lifted its TSLA position by 21.2%. Bison Wealth increased its Tesla stake by 52.2%, AMG National Trust Bank increased its position in shares of Tesla by 11.8%, and FAS Wealth Partners increased its TSLA holdings by 22.1%. About 66% of all outstanding Tesla shares are now owned by institutional investors.
The buying comes shortly after Tesla reported better-than-expected quarterly earnings, posting $0.50 per share compared with the $0.48 consensus. Revenue reached $28.10 billion, topping Wall Street’s $24.98 billion estimate. Despite the earnings beat, Tesla continues to trade at a steep premium relative to peers, with a market cap hovering around $1.34 trillion and a price-to-earnings ratio near 270.
Recent insider sales
Some Tesla insiders have sold stock as of late. CFO Vaibhav Taneja sold 2,606 shares in early September for just over $918,000, reducing his personal stake by about 21%. Director James R. Murdoch executed a far larger sale, offloading 120,000 shares for roughly $42 million and trimming his holdings by nearly 15%. Over the past three months, Tesla insiders have collectively sold 202,606 shares valued at approximately $75.6 million, as per SEC disclosures.
Tesla is currently entering its next phase of growth, and if it is successful, it could very well become the world’s most valuable company as a result. The company has several high-profile projects expected to be rolled out in the coming years, including Optimus, the humanoid robot, and the Cybercab, an autonomous two-seater with the potential to change the face of roads across the globe.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Investor's Corner
Ron Baron states Tesla and SpaceX are lifetime investments
Baron, one of Tesla’s longest-standing bulls, reiterated that his personal stake in the company remains fully intact even as volatility pressures the broader market.
Billionaire investor Ron Baron says he isn’t touching a single share of his personal Tesla holdings despite the recent selloff in the tech sector. Baron, one of Tesla’s longest-standing bulls, reiterated that his personal stake in the company remains fully intact even as volatility pressures the broader market.
Baron doubles down on Tesla
Speaking on CNBC’s Squawk Box, Baron stated that he is largely unfazed by the market downturn, describing his approach during the selloff as simply “looking” for opportunities. He emphasized that Tesla remains the centerpiece of his long-term strategy, recalling that although Baron Funds once sold 30% of its Tesla position due to client pressure, he personally refused to trim any of his personal holdings.
“We sold 30% for clients. I did not sell personally a single share,” he said. Baron’s exposure highlighted this stance, stating that roughly 40% of his personal net worth is invested in Tesla alone. The legendary investor stated that he has already made about $8 billion from Tesla from an investment of $400 million when he started, and believes that figure could rise fivefold over the next decade as the company scales its technology, manufacturing, and autonomy roadmap.
A lifelong investment
Baron’s commitment extends beyond Tesla. He stated that he also holds about 25% of his personal wealth in SpaceX and another 35% in Baron mutual funds, creating a highly concentrated portfolio built around Elon Musk–led companies. During the interview, Baron revisited a decades-old promise he made to his fund’s board when he sought approval to invest in publicly traded companies.
“I told the board, ‘If you let me invest a certain amount of money, then I will promise that I won’t sell any of my stock. I will be the last person out of the stock,’” he said. “I will not sell a single share of my shares until my clients sold 100% of their shares. … And I don’t expect to sell in my lifetime Tesla or SpaceX.”
Watch Ron Baron’s CNBC interview below.
@teslarati :rotating_light: This is why you need to use off-peak rates at Tesla Superchargers! #tesla #evcharging #fyp ♬ Blue Moon – Muspace Lofi
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