On June 14, 2017, Hedgeye Industrials analyst Jay Van Sciver called Tesla a "blindingly obvious short."
As Van Sciver wrote:
We see Tesla (TSLA) underperforming as the company’s exciting concepts transition to mundane execution. Concepts, ideas, and vision can easily win the market’s beauty pageant. Grinding out a cheap version of a high-end platform in a competitive market, with a less tolerant customer and expiring tax credits? That gets ugly.
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.
Below are two charts from Van Sciver's recent research that continue to support our view that "short squeezes" in Tesla provide "attractive entry points."
In Case You Missed It...
Van Sciver joined Hedgeye CEO Keith McCullough on Thursday's edition of The Macro Show to discuss the 2Q18 earnings report announced by Tesla. In this 12-minute video excerpt Van Sciver reiterates his bear call.
Tesla is among our favorite shorts on Investing Ideas (we added the stock back to the short side on 8/2). Click here to learn more and see the rest of the names on Investing Ideas.