On June 5th, Caixin News Agency reported that Tesla's story is a typical motivational script for the US stock market, especially when it stepped on the policy of clean energy transformation, which once made Wall Street dizzy. But the momentum of this trend has become increasingly weak since 2021.
Tesla's stock price has fallen nearly 30% this year, and its market value has evaporated by about $600 billion from its historical high in 2021. Even more unsettling is that some institutional shareholders who have long been steadfast supporters of Tesla seem to be withdrawing from the Tesla story.
John Belton, portfolio manager at Gabelli Funds, stated that the company sold 65900 shares of Tesla shares it purchased in early 2022 in the first quarter of this year, and pointed out that Tesla is beginning to feel a disconnect between stock prices and fundamentals.
According to Morningstar data, out of the 18 long-term (since 2019) mutual funds it tracks that hold Tesla, 10 have already reduced their holdings of Tesla stocks in the previous quarter, of which 4 have reduced their holdings by 15% or even more. Only 5 funds have increased their holdings in Tesla stocks.
In the past, the strong growth of Tesla's stock price has led investors to be accustomed to holding on to the stock during downturns and viewing Tesla based on the valuation of the technology industry rather than the valuation of the automaker. But now, Tesla's faithful believers have begun to doubt their investment opinions and be alert to the possible foam.
The next one is better
Gerber Kawasaki Wealth and Investment Management bought 500000 shares of Tesla stock over a decade ago, but has been steadily selling since the beginning of this year. Co founder Ross Gerber believes that Tesla's story is over.
He pointed out that the lack of funds in Tesla's public relations department, coupled with Musk's constant distraction due to political and cultural issues, has led to a decline in Tesla's value. He complained that Musk has been pursuing personal goals for the past year and a half and placing them above the interests of Tesla and shareholders.
But there are also people endorsing Tesla's high growth. Wedbush Securities analyst Dan Ives said that Wall Street hopes to find long-term growth opportunities for Tesla through this painful transition period, and autonomous driving may be the secret. It has set Tesla's target stock price at $275.
Another enthusiastic bull is Cathie Wood, the wooden sister of Ark Fund, who continued to increase her holdings in Tesla in the first quarter and predicts that Tesla's stock price will reach $2000 per share by 2027. Even with a pessimistic forecast, Tesla's stock price will rise to $1400.
However, industry insiders stressed that autonomous vehicle are a risky bet because this technology faces engineering and regulatory obstacles. This is also one of the reasons why Graham Tanaka cleared all Tesla stocks in his growth fund over the past six months, which has been holding Tesla stocks since 2011.
To put it more realistically, Graham Tanaka, who abandoned Tesla, has firmly embraced Nvidia. For him, it is better to find a new partner early than to overcome difficulties with Tesla.
He also commented that when people hold companies like Nvidia, especially when their valuation is only half that of Tesla, looking back at Tesla will feel that the risk is too high.