Investor's Corner
Tesla (TSLA) short-sellers’ media publicity called out by high-profile finance veteran
The past few months have been challenging for Tesla and Elon Musk. As the company attempted to make progress in its efforts to ramp the production of the Model 3, a consistent stream of attacks from short-sellers and critics, as well as aftereffects of Musk’s own behavior on Twitter, have weighed heavily on Tesla stock.
Amidst the constant stream of negative reports against the company coming from mainstream media, James Anderson, co-manager of Scottish Mortgage and a senior partner at Baillie Gifford in Edinburgh, noted that while some of Elon Musk’s actions, particularly against British diver Vernon Unsworth, were “ethically unacceptable,” the CEO is not really one of the biggest problems of the company. Rather, it is the prevalent — and at times aggressive — attacks it consistently receives from critics and short-sellers.
Anderson was recently featured in a segment of Citywire Money, where he discussed Tesla’s expenses as it ramped the Model 3, the peculiar amount of publicity given to TSLA short-sellers, and Elon Musk’s actions online. The Baillie Gifford senior partner noted that it wasn’t particularly surprising to his firm that Telsa is spending a lot as it grows, considering that the electric car maker is “building a car company in a completely different way with a completely new technology.”
That being said, the financial industry veteran opted to call out the media coverage of Tesla’s short-sellers and critics, who have been given a surprisingly generous amount of publicity. Anderson noted that the media needs to ask itself a lot of questions, particularly regarding the rhetoric of TSLA short-sellers, as well as their “vicious” hypothesis against the electric car maker.
“I feel the media in general needs to ask itself a lot of questions – which is the extraordinary level of publicity given to the claims and rhetoric of the absolutely vicious short investment hypothesis and individuals behind them. I think that they are not to be viewed as a beneficial force for allowing a convenient avenue to attack over enthusiasm,” Anderson said.
The Scottish Mortgage co-manager further noted that while some of Elon Musk’s actions on Twitter were ethically unacceptable, it should be noted that the actions of some of the company’s short-sellers and critics against Tesla and Elon Musk are just as unethical.
“I think these people try and make their claims come true in ways that to me seem. I said Mr. Musk behaved unethically — I believe many of these people do as well, and I do wish that many of our most prominent media personalities and institutions would examine the claims and records of many of these people. And in some cases there is a lot of evidence through court cases of just how malignant they can be,” he said.
Anderson’s observations about the behavior and prevalence of Tesla’s critics in the media are quite accurate. Rarely does a day go by, after all, when Tesla sees few negative stories about its business, or about Elon Musk himself. Last week, for example, the departure of Tesla’s CAO ended up being augmented by Elon Musk’s single whiff of cannabis during a podcast, causing the company’s stock to drop.
Even small-time Tesla short-sellers are beginning to gain support from mainstream media. Late last month, Reuters published a report celebrating the sleuthing work being conducted by several TSLA shorts, including an anonymous Twitter user known for posting misogynistic, aggressive, and racist comments against Tesla supporters. Michelle Price, one of the writers of the piece, later clarified in a follow-up Twitter post that they did multiple and varied checks on the anonymous TSLA short that they featured before considering the person as a valid source.
As of writing, Tesla shares (NASDAQ:TSLA), in which Baillie Gifford holds a 7.8% stake and which accounts for 5% of Scottish Mortgage assets, is trading up 1.67% at $294.27 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
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