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One-Year Anniversary Of Whitney Tilson's $100 Tesla Call

A little over a year ago, on March 4, 2019, Whitney Tilson made a very bold call on Tesla Inc (NASDAQ: TSLA).

Benzinga · 03/10/2020 15:01

A little over a year ago, on March 4, 2019, Whitney Tilson made a very bold call on Tesla Inc (NASDAQ: TSLA). At the time, Tesla shares were trading at around $295, but Tilson predicted that by the end of the year they would be below $100. Instead, one year later, they have more than doubled since Tilson’s call and are now trading above $660 per share.

At the time, Tilson said there was evidence that Model 3 demand was weakening and Tesla’s inventories were growing. Tilson also said investors’ faith in Tesla CEO Elon Musk was weakening.

How Tilson's Take Has Changed

Back in February, Tilson addressed his infamous Tesla call and insisted that he timed the Tesla trade relatively well.

“I thought the stock was a layup on the short side last March, when the stock was at $295 – and said so very publicly. I was right for three months as it fell to $178,” Tilson said.

See Also: Why Tesla CEO Elon Musk 'Clearly Understands The Wall Street Game'

When Tesla surprised Wall Street by reporting a surprise profit in the third quarter of 2019, Tilson said he told his readers the stock was a bad short and is too difficult to trade due to its cult following.

“This is the ultimate cult stock, so I suspect that a large percentage of TSLA shares are owned by people who will never sell, almost irrespective of how high the price goes,” Tilson said.

Tilson said one of the most important traits of successful traders is the ability not to fall in love with a trade and change your mind when the circumstances change.

“There are plenty of stocks for which I'll do a walk of shame – but this isn't one of them,” he said.

For the time being, Tilson is recommending traders stay on the sidelines when it comes to Tesla given how difficult the stock is to predict in the short-term.

Benzinga’s Take

Regardless of how you feel about Tilson and his controversial opinions, he's certainly correct in reminding traders that they don’t necessarily have to pick a side on every popular stock. Sometimes, certain stocks are particularly volatile and unpredictable due to their unique set of circumstances, and Tesla has been a notoriously difficult stock to predict.

Do you agree with this take? Email with your thoughts.