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Carson Block, the short-seller at Muddy Waters Capital, spoke with Bloomberg’s Tracy Alloway and Joe Weisenthal on the Odd Lots podcast. A longtime critic stated that he has no bearish bets against Tesla. He admitted that betting against Tesla shares is a bad idea.
“I’m not short the stock, thank God,” Block said in an interview. “We used to joke that Tesla, when it files for bankruptcy, will probably have a $30 billion market cap. Short it at your own risk. I wouldn’t do that.”
Tesla shares continue to rally, gaining about 300% since mid-March. This impressive rise has led many skeptics of the company to change course. Tesla's gains have also attracted the largest amount of cash ever bet against a stock on Wall Street. Short-sellers—who hope for a near-term decline in stock price in order to buy back more cheaply and book profits—have amassed a near $20 billion position against Tesla shares, according to data from the S3 Partners group.
Block said at one point he had a Tesla position that involved buying the company’s convertible bonds and using the coupon payments to fund long-dated put options on the stock, but he eventually sold the debt and let the puts expire.
“It’s one thing to bet on Elon Musk, but it’s another thing to bet against him,” Block said. “The guy specializes in pulling rabbits out of the hat.”
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.