German newspaper Frankfurter Allgemeine published a fairly crazy article in which it literally encouraged readers to bet against Tesla (TSLA) through a short position in order to bring Elon Musk “to his knees.”
Tesla has had a long history with short sellers, which are people who take short positions on stock betting that it will go down.
At times, Tesla’s stock was the most shorted stock on the Nasdaq with billions of dollars in bets against them.
CEO Elon Musk loves taunting the short sellers – even sending one of them short shorts at some point and warning them that a “tsunami of pain” is coming for them if they hold their positions.
He was right. Tesla’s stock has gained a lot in value over the last few years and the shorts have slowed down and reduced their position in Tesla.
But economy columnist Daniel Mohr, who works for the Frankfurter Allgemeine newspaper, wants to change that.
He posted an article called “How to bet against Elon Musk” in which he encourages readers to bet with Tesla in one of the most dangerous ways: put warrants.
Mohr wrote in the piece (translated from German):
As an investor, the question arises as to whether the markets are simply too stupid to correctly assess the Daimler prospects, or whether they totally misjudge Tesla. Both positions can be implemented in concrete investment decisions. We want to concentrate here on the Tesla-is-too-expensive-faction, because everyone can put shares of Daimler, BMW, and VW into the depot. But not everyone has a really nice Tesla Turbo Short Unlimited Knock-out. It’s not made up, that’s really what they’re called. And you are not completely alone with it either. “Tesla is a very popular short,” say the banks.
He argues that Tesla shouldn’t be worth as much as Daimler and he feels a need to take down Musk:
That shouldn’t hold us back now, on the contrary, only by joining forces can it finally succeed in bringing the magician of the markets, who Elon Musk undoubtedly still is, to his knees. So let’s take a closer look at our weapon. It can be clearly identified by the security identification number PF6XFM. From an investor’s point of view, it has a certain charm because it is relatively easy to understand: If the Tesla share price breaks – and that’s what we expect – by 10%, our turbo short gains 50%. At 20% it’s already 100, and if Tesla even slips to the pathetic Daimler level, our secret weapon wins 427%! The selected product has lever 5.
To be fair, Mohr did warn that you can lose everything if Tesla’s stock goes up 20%, but he quickly follows that by saying that Tesla’s stock doesn’t have momentum and believes it should crash.
I don’t read German so I read a translated version, but it was easily readable (Google Translate is getting really good). I’m hoping that the translated version made the article sound crazier than it actually is, because that was an insane article.
I’d love for native German speakers to weigh in here and explain if it doesn’t sound as bad in the original language, because the article sounds completely irresponsible to me.
Mohr not only recommends to short Tesla, something people have lost millions doing, but he recommends doing it with the most risky option and he openly states that he has contempt for Elon Musk.
I don’t think it’s a good idea to make financial bets based on having contempt for someone.
He also brings up the Mercedes-Benz EQS as a reason German automakers are catching up with Tesla, but it has become clear at this point that Tesla is not really affected by new EVs since the market is moving fast in transitioning to electric vehicles.
In short, you shouldn’t listen to that guy.
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