Tesla Stake Cut Defended By Gary Black, Says Strategy Shift 'Additive To Our Performance' — Mega Bull Highlights Positives, Negatives Of Elon Musk's Auto Company
Portfolio Pulse from Benzinga Neuro
Future Fund Managing Partner Gary Black defended the decision to reduce the fund’s stake in Tesla Inc. (NASDAQ:TSLA) from 12.2% to 3.6%, citing a shift in investment strategy and the electric vehicle maker’s performance. Tesla was replaced by NVIDIA Corp (NASDAQ:NVDA) as the fund’s number two position, which contributed positively to its performance. Black highlighted both the potential upsides and downsides of Tesla, including a potential 20-25% annual increase in electric vehicle adoption and the launch of a $25,000-$30,000 Next Gen vehicle, as well as regulatory and earnings risks.
July 05, 2024 | 2:59 pm
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POSITIVE IMPACT
NVIDIA replaced Tesla as Future Fund's number two position, contributing positively to the fund's performance. This shift indicates strong confidence in NVIDIA's growth prospects.
The increase in NVIDIA's position by Future Fund suggests strong confidence in the company's growth prospects, likely leading to a positive short-term impact on NVDA's stock price.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 80
NEGATIVE IMPACT
Future Fund reduced its stake in Tesla from 12.2% to 3.6%, citing a shift in investment strategy and performance. Despite potential upsides like increased EV adoption and new vehicle launches, regulatory and earnings risks remain.
The reduction in stake by a significant investor like Future Fund could signal a lack of confidence in Tesla's near-term performance, potentially leading to a short-term decline in stock price. However, the outlined potential upsides may mitigate some of the negative impact.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100