Bloomberg
Andrew Left, the famed short-seller who runs Citron Research, told MarketWatch on Wednesday that he’s short Tesla, going back on a promise he made in 2018 to never bet against the stock again.
“Yes, I’m shorting it,” Left told MarketWatch. “Whoever bought it at these prices has to flush it out, and when it flushes, it’s going to flush hard.”
Left’s reasons for shorting the stock are simple — he doesn’t think the automaker’s parabolic rise, one that’s driven the stock up as much as 112% this year alone, is tied to reality.
“This is obviously a computer-generated rally, it’s not a reflection on the company, or on valuation. It’s just a trade,” Left told MarketWatch.
A day earlier, Citron Research tweeted a similar sentiment, saying that computers are driving the market and that “even Elon would short the stock here if he was a fund manager.” Citron also said that Tesla is the “new Wall St. casino,” and that the stock is no longer about the automaker’s technology.
Left has a storied history of being for and against Tesla, and a reputation for moving markets with his commentary. He and Citron Research held a short position on the automaker for about two years from 2016 to 2018, and even sued both Tesla and CEO Elon Musk for stock manipulation.
But in October 2018, he made a surprising pivot by dropping his short position and going long on Tesla. His reasoning: “Plain and simple – Tesla is destroying the competition,” he wrote in a blog post. He did not drop his lawsuit against Tesla and Musk when he went long on the stock.
That bullish bet was short-lived, however. In April 2019, he dropped his position, saying he had become frustrated with how the company was corresponding with shareholders.
Now, Left’s joined a formidable group of Tesla short-sellers and bears.
So far this year, traders betting against Tesla are down more than $8 billion in mark-to-market losses and may be starting to get squeezed. Still, some short-sellers are holding onto their positions, because they believe the stock is bound to come down as its rally is not tied to fundamentals.
Tesla has gained 112% year-to-date through Tuesday’s close.
