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Whether it be his “Stormy weather in Shortville” tweet from back in 2017, or the saucy “Who likes short shorts?” clip he posted less than a year later, Tesla boss Elon Musk clearly relishes mixing it up with the naysayers, of which there are many.
To be fair, betting against Tesla TSLA, +4.78% , at least during those turbulent stretches, has paid off handsomely in the past. Not so in January.
Just ask GMT Capital’s Tom Claugus about that.
The fund manager, who oversees some $3.3 billion in assets, told Bloomberg News in an interview that his three Bay Resource long-short equity funds shed about 10% each, pulling back as its short positions were rattled by Tesla’s 55% rally.
‘Valuation is detached from reality.’
That’s Claugus, who acknowledged Tesla is doing “a really good job getting to sustainability,” standing by his bearish stance on the stock price.
As Bloomberg points out, Claugus is not alone with all that red ink. Other hedge-fund notables, such as David Einhorn and Crispin Odey, have been caught wrong-footed by Tesla’s frantic charge to record highs.
Overall, Tesla is the most-shorted U.S. stock, according to S3 data, regaining its position from Apple AAPL, -0.71% this month.
Also read: Famed short seller Andrew Left tells MarketWatch why he is betting against Tesla’s ‘casino’
Claugus has been short Tesla for several years now, and the position currently makes up more than 4% of its portfolio. But he was stung by more than just Tesla, he said. His long positions in the oil and gas and materials sectors also went against him.
“The coronavirus is hitting anything that’s cyclical and economically sensitive, so it’s sort of a worst of all worlds for us,” Claugus told Bloomberg. “When markets get this overheated I think it’s a very risky period. The run-up has lasted for a long time and is turning into a little bit of a speculative bubble.”
On Thursday, Tesla shares bucked declines on the Dow DJIA, -0.43% and the S&P 500 SPX, -0.16% to push nearly 5% higher after announcing plans to offer about $2 billion of common stock in an underwritten deal,