George Soros on Tesla bonds
George Soros’s Soros Fund Management bought $35 million worth of Tesla (TSLA) convertible bonds in the first quarter, according to a recent 13F filing report. These bonds are due in March 2019.
Investors generally look to company bonds when they’re interested in locking themselves in with specific coupon payments (or interest payments). Bond investors take on less risk while stock investors take on high risk. Companies also issue debt to raise funds for their activities. Stock investors show their ownership in a company and receive dividends. These dividends fluctuate over time.
Tesla’s stock price movement
Tesla’s stock price has witnessed poor performance so far this year. On a year-to-date basis, Tesla’s stock price fell 8% as of May 16. It fell 7.8% in the last year while the broader-market S&P 500 Index (SPY) rose 14.3%.
Rising uncertainty surrounding Tesla is affecting its stock price. The company faced substantial production problems with its Model 3 product in early 2018. Changes in the company’s top-level management also raised concerns. CEO Elon Musk faced varied criticism from market participants and fund managers.
Famous short seller Jim Chanos has a bearish view on Tesla. He has been shorting Tesla for some time as he isn’t comfortable with the company’s fundamentals.
In the next part of this series, we’ll analyze George Soros’s recent investment in Amazon and Netflix.