Chris Brown’s Short Pitch On Tesla

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Chris Brown’s Short Pitch On Tesla

Whitney Tilson’s email to investors discussing Chris Brown’s short pitch on Tesla Inc (NASDAQ:TSLA).

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Q1 2021 hedge fund letters, conferences and more

Chris Brown's Short Pitch On Tesla

1) My friend Chris Brown of Aristides Capital, who’s put up one of the best track records in the entire hedge fund industry since he launched 13 years ago, was on the long-short panel with me on Friday at the Ben Graham VIII Annual Conference. He gave an excellent presentation (slides attached; you can watch the video here), concluding with slides on this: “Our #1 favorite short in this market, on a risk/reward basis, is Tesla.”

Here Is What Electron Capital Told It’s Investors On A Recent Call [Exclusive]

InvestElectron Capital Partners returned 10.3% net for August, pushing its year-to-date returns into the green at 10%. The MSCI ACWI was down 3.9% for August, bringing its year-to-date return to -18.8%, while the S&P 500 was down 4.2% for August, which brought its year-to-date return to -17%. The MSCI World Utilities Index lost 1.8% for Read More

Chris Brown's Prensentation On Tesla

The Exposures I Most Want Now

For positive beta:

  • Long businesses with sustainably strong ROIC and attractive cash flow relative to their valuations (*somewhat hard to find)
  • Long affordable call options on any reasonable asset (e.g. July monthly SPY 425 calls at 11.98 implied vol)

For negative beta:

  • *POST-PUMP EPICENTER STONKS* Short perpetually unprofitable businesses >$1 bil market cap which have mooned by overpromising to a gullible shareholder base and will underdeliver (position size is key to avoid being squoze)
  • Long affordable put options or put options structures on any very overpriced asset

The Biggest Bubble Stock Of All

Thematic/Growth-at-any-Price Institutional Investment

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Promotional, Overpromising CEO

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Retail Mania

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Slow-motion Short Squeeze

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Repeated Gamma Squeezes

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$65 Billion Dollar Volume in 1 Day

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Up 2,444% in under 20 months

The Biggest Bubble Stock

Chris Brown

+2,444% in under 20 months

Chris Brown

Trades at 12x EV/forward revs, on single digit op margin, in one of the most competitive, capital-intensive industries on earth, but allocators give you a dirty look for having a position, and ask “What edge could you possibly have?”

Old Growth Bubble Charts

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New Growth Bubble Chart

NASDAQ:TSLA

Dying Bubble Consolidation Comp?

NASDAQ:TSLA

Risks To Our Thesis

  • chart analogies never work
  • Fed printing / QQQ tailwind
  • prolonged boom/new highs in shitcos
  • new large EV subsidies
  • Tesla retest to 780ish before failing
  • other

Random Twitter Wisdom

Chris Brown

 

Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)www.valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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