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Gary Black Says Tesla Is 'Too Good' A Company To Short Despite Valuation Concerns: 'Shorting Stocks Is No Picnic'

Benzinga · 6d ago

Gary Black, Managing Partner of The Future Fund LLC, has expressed his unwillingness to short Tesla Inc. (NASDAQ:TSLA) despite his concerns with the EV giant's valuation.

Tesla Is Too Good A Company

Taking to the social media platform X on Tuesday, Black shared an insight into why investors invoke short positions against a company’s stock. “Shorting stocks is no picnic,” he said.

Black added that the ideal candidates for shorting include businesses that face "secular demand decline or permanent market share loss," and lack the "tech, brand, distribution, or management depth" to reverse their fortunes.

"We won't short a company just because it looks expensive – instead we just won't own it," Black said, adding that stocks with more than 10% short interest weren't ideal candidates.

"We wouldn't short $TSLA even at 198x 2026 Adj EPS. It's too good a company in a thriving business," the investor shared. He outlined the growing adoption of EVs across the globe, as well as sharing that the EV giant's "marketing issues are easy to fix." He expressed his belief that Tesla would solve unsupervised autonomy, which would "sell more Teslas."

Valuation Concerns, Need For Marketing

Former fund manager George Noble, who was in charge of Fidelity's Overseas Fund, shared his concerns recently regarding the EV giant's stocks. Noble also shared concerns with the "irresponsible figures cited by the narrative promoting $TSLA momentum investors."

Investor Michael Burry of ‘The Big Short' fame also called Tesla "ridiculously overvalued," after he had earlier criticized the EV giant in a blog post, slamming the "Elon cult." However, the investor confirmed that he did not hold a short position against the EV giant.

Elsewhere, Black highlighted the need for stronger marketing for Tesla's products. He shared that the company could fall behind its Robotaxi competitors due to its heavy reliance on word-of-mouth advertising, as well as CEO Musk's relevance in pop culture and social media instead of traditional marketing means.

Tesla scores well on the Momentum and Quality metrics, but offers poor Value. It also has a favorable price trend in the Short, Medium, and Long term. For more such insights, sign up for Benzinga Edge Stock Rankings today!

Price Action: TSLA gained 0.46% during pre-market trading on Wednesday, according to Benzinga Pro data.

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