Tesla is in a bubble and is ‘going down’, says top fund manager

Tesla CEO Elon Musk speaks at an award ceremony for Tesla’s China-made Model 3 in Shanghai, east China, on January 7, 2020.

Ding Ting | Xinhua News Agency | fake images

Shares of electric car maker Tesla will suffer sharp declines as interest rates rise after the coronavirus crisis, Lansdowne Partners fund manager Per Lekander told CNBC.

Lekander told CNBC’s “Squawk Box Europe” on Tuesday that he believes Tesla is in a bubble and that he is short on Elon Musk’s signature, which means he will benefit if the value of Tesla shares falls.

Tesla’s market value soared to more than $ 800 billion in the 12 months leading up to January, before falling to less than $ 600 billion in February. Now it stands at around $ 679 billion.

“My opinion is that this year will be the return of the incumbent companies,” Lekander said, referring to German automaker Volkswagen, which is valued at 119 billion euros ($ 141 billion), as a company in which it is particularly optimistic.

“There are some gold nuggets, which I think will be winners in the long term. But in the short term, I guess if I am correct in the macro call that interest rates go up and the market wakes up (the fact that) the headlines aren’t as badly positioned as they think, so yeah, I think Tesla is sinking. “

Other market watchers are likely to disagree with that prediction. Wedbush analyst Dan Ives, for example, believes Tesla shares will rally after a volatile start to the year.

“Tesla’s success in boosting its electric vehicle (EV) initiatives and demand in China for the month of March will catalyze stocks higher after a shaky January and a strong month in February,” Ives said in a note on Monday. .

Tesla did not immediately respond to a request for comment from CNBC.

Lekander drew comparisons to the dot-com boom of 1999.

“If you think about the visionaries who spoke about the Internet in 1999, if you listen to them now, they are actually underestimating what happened,” he said. “The development was even more radical than what happened.”

He noted that Cisco, possibly a model from that period, has a much higher market value today than it was in 2000. “It didn’t stop it from going down 80% first,” he said.

The equivalent in Europe was probably Nokia, Lekander added, saying it was also down 80%.

“I think that’s what we’re going to see here in this tech spec ad space,” he said.

Tesla Stock Snapshot

Tesla’s ‘technoking’

Last month, Tesla revealed that it had bought $ 1.5 billion in bitcoin. Tech research firm Wedbush believes the company has already made a $ 1.2 billion profit on its investment.

Tesla officially gave CEO Musk the title of “Tesla Technoking” in a new regulatory filing on Monday.

Musk will retain his position as chief executive, Tesla said. Zach Kirkhorn, CFO of the company, also received a new title: “Master of Coins.”

“We think this suggests that Musk sees Tesla more as a technology disruptor going forward, especially with robotaxis, FSD (total self-driving) and massive advancements in battery technology on the horizon at Tesla,” Ives said.


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