A lot of the smartest investors in the world have been saying short Tesla (TSLA). Very few have come out unscathed.
Entry points matter.
Even though shares of this story stock are up 39% year-to-date, since Industrials analyst Jay Van Sciver called the automaker a "blindingly obvious short" back in June, the shares are down -19.5%.
In other words, it's been a great call. As CEO Keith McCullough says, "Jay Van Sciver remains The Only Bear to have nailed Tesla $TSLA on the short side, from the 2017 top.
Below is an excerpt from Van Sciver's note back in June...
"The goal in a story stock is to anticipate the next chapter. Tesla’s valuation is silly, and we suspect most sophisticated investors realize it. Short squeezes, as we would characterize the recent move in Tesla shares, often prove attractive short entry points. Currently, many longs are gloating and shorts are no doubt miserable. All this drama comes just ahead of new competition that may permanently degrade Tesla’s growth prospects. Longs should be fearful and shorts greedy, as we see it.
Tesla is a temporarily subsidized maker of capital goods. Established equipment markets have seen almost no competitive entry for decades; important structural hurdles typically preclude entry into markets like automobiles and electrical equipment. As Tesla’s tax credits are exhausted, existing car makers can introduce EV models with as yet unused tax credits, adding to their already substantial edge. If Tesla even survives to profitability, it would be an exceptional accomplishment."
If you want to get up-to-date on Van Sciver's short call, the insights we've unlocked below are a great start. Enjoy!
9 Reasons to Be Bearish On Tesla (TSLA) - (7/12/17)
A ‘Big Red Flag’ for Tesla Investors - (6/21/17)