Following in the footsteps of Michael Burry, another real-life figure in the movie "The Big Short," Porter Collins, a renowned trader and the inspiration for the film, has commented on Tesla. The stock was "attacked," with some calling it a prime example of being "severely overvalued."
According to Collins, its stock price has nearly doubled since bottoming out last April. These gains occurred despite declining sales.
“ Tesla is no longer even the world’s largest electric vehicle manufacturer,” he said.
This situation highlights the growing disconnect between the company's stock market valuation and its continued dominance in electric vehicle sales. However, bulls will likely ignore this, citing Tesla 's artificial intelligence... (AI) projects will eventually generate enough profits to "justify" these valuations.
But short sellers are clearly not so forgiving. Collins, known for shorting the housing market during the subprime mortgage crisis and co-founder of Seawolf Capital, emphasized in a recent interview that he believes Tesla... It is currently the most overvalued stock in the market.
He said, "Of all the S&P 500 stocks, I think Tesla is the most obvious one. I think it's the quintessential representative of this asset class."
Collins further explained that, although one of the major technology companies , Nvidia... The stock price is about 45 times the expected earnings next year, but Tesla 's stock price is currently nearly 300 times the expected earnings in 2026.
He believes Tesla's value should be similar to that of other automakers or other large technology companies. He points out that Tesla is currently in a unique position where its value is not based on the fundamentals of any particular industry.
"Frankly, I think Tesla is just a 'celebrity stock.' People follow Elon Musk and think he'll launch groundbreaking products in the future. He may or may not, but that's what everyone's expecting right now," he added.
However, Collins believes that this is not necessarily a bad thing, but it may indeed prevent investors from properly evaluating it.
He admitted, "'Celebrity stocks' typically perform strongly. Some 'celebrity stocks' have returned to normal levels, but others haven't." (GameStation) AMC eventually returned to normal market conditions. And what about Tesla? We'll have to wait and see.
Coincidentally, last December, Burry posted on the content platform Substack that "Tesla's current market value is ridiculously overvalued, and this has been the case for quite some time." However, like Collins, he did not actually short Tesla stock.
(Article source: CLS)
