Tesla's record deliveries in Q2 were driven by price cuts and are already priced into its stock, short seller Jim Chanos says
AP
- Tesla delivered just over 466,000 vehicles last quarter, exceeding Wall Street's expectations.
- Jim Chanos said the 4% beat was driven by price cuts and already reflected in Tesla's valuation.
- The short seller and Tesla critic held bearish puts options against the EV stock at last count.
Tesla delivered upwards of 466,000 vehicles in the second quarter - 20,000 more than Wall Street's consensus forecast of about 446,000, it revealed on Sunday. Jim Chanos waved away the strong showing on Twitter, saying it was fueled by price cuts and firmly priced into Tesla's current valuation.
"Again, 'blown away' is a 4% beat on deliveries with huge price cuts? The $800B valuation might just be discounting that…$TSLA," he tweeted about Elon Musk's electric-vehicle company.
"Is 'massive' 4% for a stock at 10x revenues…? Shouldn't a company trading at that valuation always exceed expectations? $TSLA," the short seller wrote in a second tweet.
Tesla's market capitalization stood at $820 billion as of Friday's close, or more than 10 times its $81 billion of revenue last financial year. Its stock price climbed another 6% in premarket trading on Monday, as investors cheered its beat on deliveries.
Chanos, a prominent Tesla critic, first bet against the automaker in 2016. He switched from shorting the company's stock to owning bearish put options on it in early 2021, and still held puts against 46,100 shares as of March 30, regulatory filings show.
The veteran fund manager - best known for sniffing out fraud at the likes of Enron, WorldCom, and Tyco then making a fortune betting against them - has been calling out Tesla's missteps and ridiculing its valuation in recent months.
For example, he's warned the EV maker's profit margins will shrink, trumpeted its competitors, underscored its reliance on government support, blasted its Autopilot software, and questioned Musk's bullishness about future products such as Optimus, a humanoid robot.
Despite Chanos' criticism, Tesla stock has skyrocketed 113% this year, making it one of the S&P 500's five biggest gainers in the first half. It has been swept along with other tech stocks by a tidal wave of excitement around artificial intelligence (AI).
However, it still trades more than a third below its peak price of over $400, which it reached in late 2021, adjusted for its stock split in August.