Hedge-fund titan David Einhorn, founder of Greenlight Capital, apparently continues to believe that electric-vehicle heavyweight Tesla (TSLA) is overvalued.
He has a history of bearish investments against Tesla. And in the fourth quarter, he established a long put position for 100,000 shares of Tesla with a notional value of $106 million, Greenlight disclosed in a Securities and Exchange Commission filing, cited by CNBC.
A put option gives its owner the right, but not the obligation, to sell shares of stock at a fixed price. Not disclosed were that strike price, the date the puts expire, and the price that Greenlight paid for them, CNBC reports.
Puts rise in price when the underlying stock price falls. So Einhorn will profit if Tesla shares decline. Tesla has slid 11% in the past three months, matching the decline of the technology-heavy Nasdaq Composite index.
With Tesla stock dropping 13% so far this year, there’s a good chance that Einhorn has made money on the position, CNBC points out, though it’s unclear whether he still holds it.
Einhorn has entered and exited many bearish trades against Tesla in recent years, CNBC reports. He got out of his last short at the end of 2020 with a big loss, as Tesla soared over five times that year.
Morningstar analyst Seth Goldstein also thinks Tesla shares are overvalued.
He puts fair value at $700, well below Tesla’s recent level of $916.60. “We think the market continues to price in a scenario where Tesla becomes a top-three automaker in global vehicles sold by 2030,” he wrote in a commentary last month.
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