Moses Ventures founder and renowned trader Danny Moses has revealed that he no longer holds a short position in Tesla Inc. Moses, known for his role in the “Big Short,” had been short on Tesla at various times since November 2016.
Why the Change of Heart?
Moses explained that his decision to drop the short bet was due to Tesla’s shift in trading dynamics. The company’s stock started to trade on fundamental principles in the first quarter of this year, marking a departure from its historical trend of non-fundamental trading. Moses noted that Tesla’s promises of autonomous driving and robotaxis, coupled with CEO Elon Musk’s budding relationship with President-elect Donald Trump, contributed to this change.
Technical vs. Fundamental Trading
Moses emphasized that he prefers to trade on fundamental principles rather than technicals. “When the story moves from non-fundamentals to technicals… that’s when I leave the story,” he said. Moses also expressed skepticism about Musk’s promises, citing his track record of unfulfilled commitments. “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.”
Tesla’s Performance and Analyst Ratings
Tesla’s shares closed down 1.6% at $351.42 on Tuesday, with a year-to-date increase of 41.5%. Despite this, analysts have a consensus rating of “Buy” on Tesla stock, with the highest price target being $411. Notably, Roth MKM analyst Craig Irwin recently upgraded his rating to “Buy” and increased his price target to $380, citing the potential benefits of Musk’s association with Trump.
Price Action and Analyst Ratings
| Analyst Firm | Price Target | Rating |
|---|---|---|
| Roth MKM | $380 | Buy |
| Stifel | $339 | Buy |
| UBS | $339 | Buy |
The average price target for Tesla stock is $339, implying a 3.5% downside from its current price.
Conclusion
Moses’ decision to drop his Tesla short bet reflects the changing dynamics of the company’s stock. As Tesla’s trading dynamics shift toward fundamental principles, traders and analysts alike will be closely watching the company’s performance and future prospects. With a strong year-to-date performance and positive analyst ratings, Tesla remains a closely watched stock in the market.