Affected by factors such as the disappointing Robotaxi press conference, cooling demand for electric vehicles, and intensified industry competition, Tesla's stock price has recently been under pressure to decline. But Carson Block, the founder of Muddy Waters, a well-known short selling institution and a "big bear," said he would not short Tesla.
Brock stated that he had concluded as early as 2021 that shorting Tesla was a foolish act. He also stated that he realizes Tesla's capital size is its safety net.
What all bears have overlooked is that Elon Musk understands that the scale he needs is the capital he possesses, "Block said in a media interview on Monday. So when he is able to drive up the stock price and have such a huge market value - I mean, even if the company loses billions of dollars and the stock price is falling, the market value is so large that he can still continue to raise funds
For Brock, this is a huge transformation. He has shorted Tesla in the past, and a few years ago his company held long-term put options on Tesla.
This is a highly volatile stock, but you know, it can consistently receive funding, "Block said. He added, "Tesla won't go bankrupt for a long time. And that's exactly what bears are ignoring because they're fixated on 'Oh, it's losing money, it's going bankrupt.'
Tesla's financial condition has always been a focus of attention for investors. In the second quarter of 2020, Tesla achieved profitability for four consecutive quarters for the first time, but the following years were not smooth sailing. This year, due to a slowdown in demand, Tesla's market share has been taken away by competitors, resulting in disappointing free cash flow and revenue data for the past few quarters.
For some people, this makes Tesla's high stock price difficult to sustain. Per Lekander, a big short and hedge fund manager, recently called Tesla "the largest stock market foam in the world history" and predicted that it would plummet by about 93% to $15 per share.
But Block is not worried about these factors, he believes Musk will continue to surprise skeptics. Elon always manages to come up with new ideas, "he said, adding," I won't bet on Elon losing
On Monday, Tesla's stock price fell 0.84% to $218.85. In the past month, the stock has fallen by over 12% cumulatively.
The "Seven Giants" of the US stock market can be bought with closed eyes
In this interview, Block also expressed an optimistic view on the US stock market, stating that the US stock market, especially large tech stocks, can be bought with closed eyes.
Although the S&P 500 index has repeatedly hit historic highs this year and investors are concerned about the overvaluation of US stocks, Block said that the inflow of retirement funds into US stocks will still be a key driving force for further market growth, especially for the most heavily weighted stocks.
Don't overthink it, close your eyes and invest in the stocks of the seven major tech companies in the United States (Tesla, Apple, Microsoft, Google, Amazon, Nvidia, and Meta). This will be a worthwhile investment, "he said.
He added, "In the past few years, I have reviewed my career as an aggressive short seller and calculated that perhaps I could have 'long' the S&P 500 index