Dhe automobile manufacturer Tesla started the year on a high note. The company announced that it had produced a record 300,000 electric vehicles between October and December 2021. Fraser Perring doesn’t believe in the hype. The activist short seller, best known for an early bet against Wirecard, has bet that Tesla’s share price will fall. In an interview with the FAZ, he explained that his company Viceroy Research had invested about 6 percent of its funds in the short sales of Tesla.
“Every single automaker now makes electric vehicles,” he argued. “Tesla’s market share is shrinking no matter what perspective you look at it from. Tesla is losing its first-party advantage because the company does not maintain quality, does not recall cars in a timely manner, and does not work with authorities. All of these problems add up to a company that is not worth a trillion dollars. “
Not the first time
He named Volkswagen, Toyota, Hyundai and Kia as manufacturers of better electric vehicles and called Tesla’s autopilot feature false advertising because it required constant human monitoring. Tesla’s shares are currently priced at more than $ 1,000 on the Nasdaq, a US technology exchange. In Perring’s view, they’re worth no more than a tenth of that.
It’s the third time Viceroy has shorted Tesla since summer 2020, Perring says. He claims to have lost money on the first investment and made money on the second. Perring isn’t the only one to question Tesla’s rating. Analyst David Trainer of stocks research firm New Constructs said in September that Tesla’s stock price should be closer to $ 50, suggesting that the company’s electric car sales in Europe are lagging behind those of its competitors. Trainer called the company “a house of cards”.
Tesla has long been one of the top short selling companies in the world, but many shortsellers have given up their bets on the company as the stock’s steep rise resulted in significant losses. According to data provider S3 Partners, short positions as a percentage of total Tesla shares available for trading fell from 19.6 percent in January 2020 to 2.8 percent this month. “Shorts were burned alive,” Perring commented on other people’s bets against Tesla. However, he claimed that his investment would not suffer a similar fate as the market slowly became aware of the stock’s overvaluation.
Independently of this, Perring stated in an interview with the FAZ that he intended to publish a report on a German company. He did not want to name the target company, but said that Viceroy’s nearly year-long research had uncovered a “pervasive fraud” involving the company. He added that he had already made BaFin aware of the alleged misconduct. Perring is the activist short seller who most often targets German stocks. One of his most recent targets was the Linz-based technology group S&T, which he accused on December 16 of being fraudulent and bankrupt, causing the company’s stock to lose 29 percent of its value that day.