‘Big Short’ investor Danny Moses doubles down on bet against Tesla, says core business is ‘falling apart’; TSLA can fall another 70% to $50/share.
“This move to own it for robotaxis and AI is going to fade over time. So, $150 billion market cap at $50? Seems like a reasonable valuation to me,” he said.
Moses, who successfully bet against the housing market before the 2008 financial crisis, has had a $50 short on Tesla since last November.
He sees Tesla as a ‘show me’ story and believes that investors will start to lose patience with the company’s narrative as an auto company. Moses expects Wayve, an autonomous driving company, to emerge as a serious competitor to Tesla, citing their focus on driving in cities. Wayve recently raised over $1 billion in funding from major investors like Nvidia, Microsoft, and SoftBank, in which Moses also has a stake through a venture capital fund. He believes that not enough attention is being paid to Wayve’s potential impact on the autonomous driving market.
Tesla shares fell by 7% last week, with Moses continuing to express skepticism about the company’s future prospects.
He remains cautious about Tesla’s reliance on the robotaxi and AI narrative, suggesting that this focus may fade over time.
He believes that a $50 valuation for Tesla is more realistic given the current challenges facing the company.
Moses sees competition in autonomous driving intensifying, with Wayve poised to challenge Tesla’s position in this market.
Despite the recent decline in Tesla’s stock price, Moses remains committed to his short position on the company.
In his interview on CNBC’s “Fast Money,” Moses expressed concerns about Tesla’s management decisions and strategic direction. He criticized Musk’s emphasis on robotaxis and AI, suggesting that these plans may not materialize as expected. He highlighted the risks associated with Tesla’s business operations, including the workforce reductions and the ongoing investigation into securities fraud. Moses’ skepticism about Tesla’s prospects reflects his background in successful short bets, indicating that he believes the company is overvalued and vulnerable to a significant decline in the future.
With Tesla facing increasing competition in the autonomous driving market, Moses sees the company’s position as precarious and sees potential for disruption from emerging competitors like Wayve.
Overall, Moses’ bearish outlook on Tesla shares reflects his assessment of the company’s fundamental weaknesses and strategic vulnerabilities. He remains committed to his short position on Tesla, despite the stock’s recent decline, citing concerns about the company’s core business and strategic focus.
His assessment of Tesla’s valuation and competitive position underscores the challenges facing the company in an increasingly competitive market for electric vehicles and autonomous driving technology. Moses’ track record of successful short bets and his analysis of Tesla’s prospects suggest that investors should exercise caution when considering the long-term potential of the company’s stock.
Key Highlights:
Danny Moses reiterates bearish position on Tesla, amidst 32% stock decline in 2023.
Cites weakening core business and diversions to robotaxis and AI as major concerns.
Highlights recent workforce cuts over 10%, and looming fraud investigations.
Marks August 8 robotaxi unveiling as pivotal, yet skeptical of its success.
Suggests a $50 valuation per share, questioning Tesla's market cap sustainability.
Tesla's stock fell 2% closing at $168.47 last Friday.
Context/Background:
Danny Moses, famed for his predictions during the 2008 financial crisis, continues his scrutiny of Tesla. His concerns focus on operational instabilities and strategic diversions under Elon Musk's leadership, reflecting deep market skepticism.
Why This Matters:
Moses' perspective may influence market sentiment and investor confidence in Tesla.
Highlights broader implications of strategic shifts within major tech-oriented automakers.
Market Insights:
Continued bearish outlook from a notable market player like Moses could affect Tesla's stock performance and investor decisions.
Expert Statement:
"Everything is kind of falling apart in their core business. He’s pointing everybody to robotaxis and AI and autonomy," - Danny Moses.
Impact & Recommendations:
Investors should critically assess Tesla’s strategic direction and operational health.
Consider market risks associated with Tesla's pivot towards AI and autonomous technologies.
