Tesla has made a lot of investors rich. In turn, it’s also made a lot of short-sellers less wealthy. David Einhorn of Greenlight Capital Re is one of the latter.
The Hedge Fund Manager notorious for big runs at the World Series of Poker and online jabs at Tesla CEO Elon Musk reported his Q3 Earnings on Thursday, November 5th, blaming Tesla “mania” for his fund’s mediocre showing during the third quarter of 2020.
Einhorn admitted that Greenlight’s bearish position against the electric automaker “detracted from performance” of his fund negatively affected its performance throughout 2020. According to a press release from Greenlight, which was released the day before its earnings, gross written premiums were down 14.9% compared to the first three quarters of 2020. Additionally, net premiums also decreased by 10.7%. However, the biggest loss occurred with the company’s total investment portfolio, which lost $22.8 million during the first nine months of the year, accounting for a total loss of 6.5%.
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Tesla’s total growth through 2020 has been remarkable and has been the buzz of most investors in a year filled with financial and economic uncertainty. As the large-scale pandemic halted normal life in 2020, investing gained popularity, especially among first-time and relatively inexperienced retail investors.
If you fit this description, Einhorn is blaming you.
Einhorn blamed retail investors for Greenlight’s loss through the first nine months of 2020, labeling TSLA’s performance and growth in the market so far this year as “mania,” even though the automaker has experienced the largest and most successful year in its short but storied history.
Not only has Tesla managed to turn a profit in each of the three quarters of 2020 so far, but it also has extended its profitable streak to five-straight quarters. After beginning deliveries of its mass-market sedan, the Model 3, in China earlier this year, Tesla has also announced the groundbreaking of two other vehicle production facilities: One in Germany and another in Texas.
The increase in production facilities is in reaction to the widespread acceptance of EVs and Teslas in specific. The company has gained notoriety as the leader in electric vehicle tech, offering affordably-priced cars with top-notch performance aspects and industry-leading range ratings. Because of this, Tesla has experienced sharp growth in not the only stock price but also vehicle production and delivery figures. In Q3, Tesla produced and delivered more cars than ever before, nearing a one million vehicle per year production rate.
Einhorn’s losses can be attributed to the 568% increase in stock price since last year, but that won’t stop him from shorting stocks that he considers “highflying.” According to statements made during the Earnings Call and Barron’s, he has no intention to remove his positions.
Disclaimer: Joey Klender is a TSLA Shareholder.
Greenlight Capital Re’s Q3 Earnings Report is available below.
Greenlight Capital Re Press Release 2020 Q3 FINAL by Joey Klender on Scribd