Could Druckenmiller’s Short Bet on Tesla Pay Off This Year?



Druckenmiller’s bet against Tesla

Billionaire investor Stanley Druckenmiller bought put options against Tesla (TSLA) during last year’s fourth quarter, giving him an option but not an obligation to sell Tesla stock. He bought put options worth $99.8 million, implying that he expects Tesla’s stock price to drop. However, important considerations for the put contract such as the strike price or contract expiry are not known. Tesla stock rose 7% during the fourth quarter.

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David Einhorn, another Tesla bear

Druckenmiller isn’t the only one betting against Tesla. As we’ve discussed previously, David Einhorn has been a prominent Tesla (TSLA) bear for a while. In November, he referred to Tesla’s peak in the last quarter to being “as good as it gets” for the company, as he expects sales of its expensive Model 3 sedans to wane going forward. He was expecting a revenue and earnings disappointment from Tesla in the fourth quarter.

Tesla’s performance

Tesla reported its fourth-quarter results on January 30. Its adjusted EPS fell 33.4% sequentially to $1.93 from $2.90, missing analysts’ estimate of $2.20. However, its revenue was better than expected, and its Model 3 gross margins were strong. Analysts expect lower sales growth and margins for the company going forward. Tesla stock had risen 3.8% year-to-date as of February 15, underperforming broader markets—the S&P 500 (SPY), Dow Jones Industrial Average (DIA), and NASDAQ Composite (QQQ) had risen 11%, 10.9%, and 11.5%, respectively.


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