Its short sellers have all but vanished, but there is one investor: michael berry, one of the first investors to call and profit from the subprime mortgage crisis is shorting. Tesla michael berry has increased his wager against elon musk and also placed a new bet against kathy wood. Berry sky on asset management has held bearish put options on nearly 1.1 million shares of tesla worth 731 million dollars at the end of june. An increase from its puts on 800 000 shares three months earlier. Regulatory filing showed the investor has repeatedly accused musk in his electric vehicle company of over promising and under delivering. Hes also said that teslas valuation isnt sustainable and that its stock will collapse. However, tesla shares are up more than seven fold since the start of 2020. longtime tesla skeptic michael berry, whos known as the big short has extended. His short position to kathy woods arc, invest innovation etf. The fund holds over 112 billion dollars in investments with tesla stock. Making up 10.43 percent of the fund. Berry is a long time investor who previously predicted the 2007 housing crisis collapse. Barry placed bets of over 5 billion on the real estate market in 2007, resulting in billions of dollars of gains after the housing market eventually collapsed. Since his legendary short position over 12 years ago, barry has been recently notable for his short positions against tesla. The electric car company run by ceo elon musk in january. Barry stated that tesla stock would eventually crumble, stating that tesla investors should enjoy it while it lasts.
Berry then placed a massive 800 000 put option contracts in q1 against tesla stock. Worth 534.4 million puts provide investors with gains when underlying securities drop in price last week. Bury skyon asset management firm placed more puts on tesla, bringing the total up to 1.1 million. The puts are valued at around 731 million dollars. Now berry is moving his short position to a long time. Tesla bull in ark invest the firm that has remained heavily supportive of tesla and elon musks. Other ventures, including neuralink known for accurate predictions of tesla stock wood and arc gained notoriety several years ago, when they predicted that its stock would surge to 800 in 2018.. This was impressive, as at the time tesla was battling, profitability issues and ramping the model 3, a process that nearly took tesla bankrupt. Wood was ultimately proven right last year during teslas monumental 2020 stock surge, which sent the automakers stock up over 700 percent in a year. That was extremely tough for many companies. Tesla supporters have listened to woods investment strategies due to the outlining success that the firm predicted, however, bury, is not one of those listeners after comparing ark to the manhattan fund, he said, if you know your history theres a pattern here that can help you. If you dont, youre doomed to repeat it, the tweets are now deleted. Barry placed 235 500 put options against arks innovation, etf fund, which was a top performing, etc in 2020, after gaining 149 percent in value just because he was right once does not mean he will always be correct, as he only has one prior achievement to fall back On whereas someone like kathy wood has many accomplishments to use as proof of why they can be right in certain areas, i wish to note that perhaps barry did not get the message that you should never ever bet against.
Elon one only needs to look back at his many previous accomplishments to see a pattern for the future zip2 successful paypal, successful, spacex, successful neurolink, successful starlink, successful, boring company, successful and finally tesla successful elon is a rare breed of ceo and that he is someone who Is highly intelligent committed to what he does to a degree that far outweighs any other ceo and has an incredible ability to follow through on pretty much everything he says. Even a flake, so barry should be very wary of betting against someone like elon, who has such an impressive previous track record. Tesla is smashing records quarter after quarter and the company just had their most profitable quarter ever without even the credits and with one billion dollars in cash. I believe elon with tesla has the whole car industry checkmate. The oem car makers cannot make a futuristic car because non vertical integration they outsource their software and design and have all invested in ice factories check out sandy monroes video about the teardown of mach e and volkswagen id the supercharger network is another checkmate move. No one has set up a charging infrastructure and people if they still prefer other evs. They still have to use tesla superchargers, but they have to download the tesla app and you get charged more and will charge slower than the teslas around you. This is brilliant from elon and batteries weve made several videos on tesla battery technology, which puts them at least a decade ahead of other car makers.
Elon is not just smart. He is a once in a century genius play against him. Will you get burned? One more thing: we noticed that most of the negative commenters on tesla article threads have never even heard of sandy monroe or seen as insightful videos or read interviews with them. They could learn a lot, but a lot of them dont want to they have their opinions. Cast in stone still think tesla is a car company mark my words: tesla will become a multi trillion dollar company in the next few years. Apple accounts for only 15 percent of the global smartphone market, but its market cap is higher than market caps of all other smartphone companies combined apples, total addressable market is 500 billion dollars. Teslas total addressable market is 5 trillion. Tesla has so much more potential than apple Music. Kathy wood is currently one of the best performing mutual fund portfolio managers around shes, best known for her bold predictions in tesla and bitcoin, and for her small team of millennial analysts, her flagship fund, the arc innovation fund has skyrocketed, beating the s p 500. Nearly 4 1 over the past five years arc invests in high growth, high momentum stocks, with a focus on innovation, slash disruption, the fund trades for a full 125 times the estimated 2022 earnings of its components, kathy wood, the star fund manager at the helm of arc Investments hit back at michael, bury tuesday, saying the famed short seller doesnt understand the fundamentals underpinning her tech bets kathy wood called out michael bury on social media after the big short investor placed a bet against her flagship arc.
Innovation exchange traded fund to his credit michael bury made a great call based on fundamentals and recognized the calamity brewing in the housing mortgage market. I do not believe that he understands the fundamentals that are creating explosive growth and investment opportunities in the innovation space, wood tweeted. In our view, the seeds for the innovation explosion that at arc invest is dedicated to researching, were planted during the 20 years, ending with the tech and telecom bust having gestated for more than 20 years. These technologies should transform the world during the next 10 years. Woods. Twitter thread continued if we are correct gdp and revenue growth will diminish until the opportunities in nascent technologies begin to move macro needles in this environment. Innovation based strategies should distinguish themselves. Wood said the deflation in commodity prices is cyclical, but is adding to the secular forces caused by technologically enabled disruptive innovation, good deflation and creative destruction, bad deflation, woods tweet said since mid may, a number of commodity prices have been breaking down: lumber 65 to 70 percent. Copper 10 to 15 percent oil, 10 percent. An unexpected increase in the dollar also is negative for commodity prices. Now the mannheim use car index a leading index for new car sales is slipping. Wood added most bears seem to believe that inflation will continue to accelerate shortening investment time horizons and destroying valuations, despite what we believe has been a supply chain related, slash short term burst in inflation.
Both equities and bonds have appreciated. Since march would concluded, wood has made a name for herself by looking deep into the future, to predict how things like battery storage and genome sequencing will reshape the economy. Her companys eye popping returns sparked a cult following, and tens of billions of investment dollars are flowing into arks coffers. Kathy wood knows what shes doing her track record clearly proves it also gene munster, a veteran tech analyst and the co founder of loop ventures said in an interview with cnbc recently that, in his experience, its risky to short a long term theme like electric vehicles, michael Berrys bet against tesla is dangerous. According to loop ventures, gene muster, who says the electric vehicle giant could be worth north of 2 trillion over the long term. Munster highlighted the growth of the ev market in the interview as well, calling it quite spectacular and said any short bets against tesla would have to be based on a lack of belief that the firm can capture market share around the globe. Munster also said he believes tesla will take over anywhere from fifteen percent to twenty percent of total car sales globally in the coming years. If tesla does hit that mark, the company could be worth over two trillion dollars. The loop ventures founder went on to explain the bowl case for tesla, arguing that the ev giant is set to operate with a more traditional tech model, moving into hardware and software services for revenue gains.
The real substance of the bull case is a business model that is more like a traditional tech model. If theyre successful at hardware software services similar to apple and look at what apple trades at about six times, revenue multiple, you can build a case that tesla can get there too. He said munster concluded by saying that there is a question around competition, but that he thinks theres a strong case that long term tesla investors will be rewarded for their Music patience. Overall, what berry says about tesla has told us one thing about his investment record. He got lucky in 2008., this guy literally cant see the massive disruptions happening right now in front of his crossed eyes.