Posted in: Op-edBusiness News
Published:
May 20, 2020 2:29 PM UTC

One Hedge Fund Picked a Horrible Time to Sell $1.2 Billion Worth of Tesla Stock

Jim Simmons' Renaissance sold Tesla shares in the first quarter despite massive upside for the Elon Musk-led company.
  • A large New York hedge fund dumped a boatload of Tesla shares in the first quarter of 2020.
  • The electric car company is one profitable quarter away from being eligible to enter the S&P 500.
  • The most widely followed trader on Twitter believes that Tesla offers a massive upside.

Tesla (NASDAQ:TSLA) continues to be the darling of the Nasdaq. Shares of the Silicon Valley automaker are up over 130% from the March low of $350.51.

But not everyone is happy to hold the stock. Jamie Simmons’ Renaissance Technologies, a hedge fund with $110 billion in assets under management, parted with $1.2 billion worth Tesla shares in the first quarter. Those shares could be worth a lot more as Tesla is on the cusp of entering the S&P 500.

Tesla One Profitable Quarter Away From Entering S&P 500

Despite the drama behind the reopening of the Fremont facility, Tesla is knocking on the doors of the prestigious S&P 500. The Wall Street Journal reports that the electric carmaker is close to satisfying the index’s criteria of printing a cumulative profit over four consecutive quarters.

Tesla has been profitable over the last three quarters. The company reported a net income of $143 million in the third quarter of 2019, $105 million in the fourth quarter, and $16 million in Q1 2020.

Tesla’s run of profitability. | Source: Yahoo!

If Tesla can somehow post another profitable quarter despite the COVID-19 pandemic, it would be eligible for inclusion.

But analysts are not so optimistic, as they see the electric car company bleeding $387 million this quarter.

Legendary Trader Sees Nearly 160% Upside

Even if Tesla fails to defy Wall Street this quarter, the tech company can afford to wait. Tesla’s Shanghai and Fremont facilities are in full throttle. It remains confident that it can deliver on its guidance of 500,000 vehicles this year. The fundamentals look bullish in the long term, and it appears TSLA’s technicals look mighty strong as well.

Legendary trader Peter Brandt shocked financial Twitter when he shared a bullish chart for TSLA. The most followed trader on Twitter says that TSLA’s chart looks ripe for a massive technical breakout.

Tesla is printing a reliable bullish pattern. | Source: Twitter

At a current price of around $808.01, the potential upside is almost 160%.

Brandt is not the only popular trader who’s bullish on TSLA. Hedge fund manager Will Meade says that the car company is up to something after spotting a trader making a bullish call on the stock.

Meade thinks Tesla’s brewing something. | Source: Twitter

With the U.S. economy slowly reopening, things can only go up for Tesla. That’s good news for Elon Musk but not so much for Jim Simmons and Renaissance Technologies.

Disclaimer: This article represents the author’s opinion and should not be considered investment advice from CCN.com. The author does not own Tesla shares.

This article was edited by Sam Bourgi.

Kiril Nikolaev @kirilnikk123

Kiril is a CFA Charterholder and financial professional with 6+ years of experience in financial writing, analysis and product ownership. He has a bachelor's degree with a specialty in finance and lives in Canada. Kiril’s current focus is on finance and cryptocurrencies. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. He owns Bitcoin, Ethereum, and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading. kirilnikk123@gmail.com

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