FYI: Danny Moses, known for his portrayal in "The Big Short," has decided to stop shorting Tesla’s stock due to changes in market dynamics.
Tesla Critic Danny Moses Exits Short Position Citing Market Shift
Danny Moses, a renowned figure from the movie "The Big Short," has announced that he is quitting his short position on Tesla. The experienced investor, known for his skepticism towards Tesla, recently appeared on CNBC to explain his decision. Moses stated that he is stepping away because the factors influencing Tesla’s stock have shifted from fundamentals to technicals, making the stock’s movement unpredictable based on traditional analysis.
Market Volatility and Unpredictability
Moses elaborated on his reasoning by emphasizing the challenge of investing in stocks primarily driven by technical factors rather than fundamentals. He mentioned, "When the story moves from non-fundamentals to technicals… that’s when I leave the story. It’s very difficult to short a name that is not trading on fundamentals. It’s also hard to go long a name when it’s all on promises." He referred to previous instances where Tesla’s stock prices fluctuated based on sentiments and potential market advantages, such as those speculated around regulatory benefits during former President Donald Trump’s tenure.
Skepticism Persists Despite Position Exit
Despite closing his short position, Moses continues to be skeptical about Tesla’s long-term promises. He expressed doubts regarding CEO Elon Musk’s ability to fulfill certain promises made to consumers and investors. Furthermore, he shared skepticism about Musk’s role in the Department of Government Efficiency (DOGE), a position many are closely watching.
Historical Context of Tesla Shorting
Moses’s move does not stand alone. Iconic investor and Tesla critic Jim Chanos also recently stepped back from his short position, having experienced financial setbacks. This trend is notable, considering the significant drop in short-sellers after Tesla’s substantial stock performance in 2021, with over 50% choosing to exit their positions.
Conclusion
The landscape of Tesla’s stock continues to be influenced by factors that extend beyond traditional market fundamentals, leading seasoned investors like Danny Moses to reconsider their strategies. Although Moses has made his choice clear, his underlying skepticism towards promises yet unfinished hints at a continuing cautious outlook on Tesla’s stock.
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Written by William Kouch, Editor of Automotive.fyi.
