Hedge Fund Manager Says Tesla Stock is the “Biggest Bubble in Modern History”
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Hedge Fund Manager Says Tesla Stock is the “Biggest Bubble in Modern History”

Per Lekander, a hedge fund manager who has been shorting Tesla since 2020, believes the company's shares could plummet to $14.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

A hedge fund manager shorting Tesla (NASDAQ: TSLA) stock since 2020 believes the company’s shares could plummet to as low as $14 and potentially lead to bankruptcy.

When speaking with CNBC today, Per Lekander described Tesla’s current situation as “the beginning of the end of the Tesla bubble,” calling it potentially the biggest stock market bubble in modern history.

His bearish outlook is based on estimating Tesla’s full-year earnings per share at $1.40. He argued that the company should be valued at ten times forward earnings instead of its current valuation of around 58 times.

Tesla Missed Q1 Vehicle Deliveries Estimates by a Massive Margin

Tesla’s recent Q1 vehicle delivery numbers fell significantly short of market estimates, which Lekander views not as a supply chain issue but rather as a demand problem. He highlighted that Tesla’s Model 3 and Model Y make up most of its sales, and no new vehicle releases are expected until 2025.

Lekander also argues that Tesla’s business model, which relies on solid revenue growth, vertical integration, and direct-to-consumer sales, becomes problematic when sales decline.

Other market voices have echoed concerns about Tesla following the disappointing delivery numbers. Richard Windsor called Tesla’s valuation “ludicrous,” while Dan Ives from Wedbush Securities described Q1 as an “unmitigated disaster” that could lead to “darker days” if not turned around.

Analysts at HSBC and TD Cowen have lowered their price targets on Tesla, reflecting growing skepticism. However, not all are pessimistic about Tesla’s future.

Cathie Wood’s Ark Invest showed support by purchasing stock ahead of the Q1 delivery report, and Tom Narayan from RBC Capital Markets remains optimistic, citing the potential of Tesla’s energy storage business and the Full Self-Driving system as near-term catalysts.

Tesla Stock Update

Tesla’s stock closed at $166.63 on Tuesday, experiencing a drop of $8.59 or 4.90% from the previous trading session’s close of $175.22. Over the past 52 weeks, the stock has fluctuated between $152.37 and $299.29, with a trading volume of 116,035,217 and an average volume of 102,210,573.

Tesla’s market capitalization stands at $530.682 billion, and its beta, a measure of volatility compared to the market, is 2.41, indicating higher volatility.

The company’s price-to-earnings (TTM) ratio is 38.75, with earnings per share (TTM) at $4.30. Tesla’s next earnings date is projected to be around April 23, 2024, and the one-year target estimate for its stock price is $192.88.

Do you think Telsa will recover from its current slump or continue to fall? Let us know in the comments below.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.