Tesla Inc (TSLA)

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Tesla Shares Gain as Cathie Wood's ARK Invest Buys Tech Stock Dip
By: TheStreet | May 20, 2021

• Ark Investment, run by star fund manager Cathie Wood, added 69,500 shares of Tesla yesterday as the stocks closed within a whisker of a six-month low.

Tesla (TSLA) shares moved higher Thursday after star fund manager Cathie Wood added more of the clean energy carmaker to her Ark Investment portfolio.

Tesla shares, which closed with a whisker of the lowest levels since November last night, have fallen more than 37% from their all-time high of $900.40 per share on January 25, loping some $300 billion in market value from Elon Musk's Palo Alto, California-based group.

The downside move yesterday, however, prompted the purchase of 69,500 shares by Wood's Ark Investment, of its biggest holding

Wood, who told CNBC in early March that she was becoming "more optimistic" about her portfolios amid the opening days of the ongoing tech selloff -- which had tipped the Nasdaq Composite into correction territory at the time -- has seen the value of her flagship ARK Innovation fund tumble 34.2% from its late February peak, although it is still up more than 67% from last year.

Tesla shares were marked 1.77% higher in pre-market trading to indicate an opening bell price of $573.50 each. ARK Innovation ETF (ARKK) shares were marked 1.15% higher $104.15 each.

Data from S3 Partners, however, which tracks short positions across all sectors in the market, noted that short-sellers of Tesla have earned $900 million so far this year and that the stock "continues to be the largest short in the EV sector, as well as the largest worldwide short."

"Total short interest in the sector is $29.5 billion, down from $48.8 billion on January 1st. But if we remove the elephant in the room, Tesla, short interest is $7.0 billion, up $61 million for the year," S3 said in a Wednesday client note.

Michael Burry, made famous through his depiction by Christian Bale in 'The Big Short', unveiled a significant bet against Tesla earlier this week -- based on put options -- worth around $535 million.

Put options give the buyer the right, but not the obligation, to sell a certain asset (such as Tesla stock) at a certain price at a defined point in the future.

Burry, who made billions betting against the U.S. housing market in the mid-2000s, has recently expressed concern about the fact that Tesla generates a large portion of its profits from the sale of regulatory credits as opposed to the production of its Model 3 and Model S sedans.

Late last month, Tesla's stronger-than-expected first quarter earnings were clouded by details showing that profits were flattered by $518 million in regulatory credit sales -- a 46% increase from last year -- and just over $100 million from the sale of bitcoins it purchased earlier this year.

Tesla said non-GAAP earnings for the three months ending in March were pegged at 93 cents per share, well ahead of the Street consensus forecast of 79 cents per share and compared to a pre-split tally of $1.24 share over the same period last year.

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