Ark Invest Stock Portfolio: 5 Biggest Positions

3. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 88   

Tesla, Inc. (NASDAQ:TSLA) designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems. ARK Investment Management has 4.6 million shares worth $569.8 billion in Tesla, Inc. (NASDAQ:TSLA) which makes about 4.93 % of its total investment. On January 25, Tesla inc. posted earnings for the fourth quarter of 2022, reporting earnings per share of $1.19, beating analyst estimates of $1.11. The revenue over the period was $24.32B, beating analyst estimates by $17.21M. 

On December 22, Canaccord analyst George Gianarikas maintained a Buy rating on Tesla, Inc. (NASDAQ: TSLA) stock and lowered the price target to $275 from $304, highlighting that the recent tumble in the shares is the worst in the company’s stock history.      

At the end of the third quarter of 2022, 88 hedge funds in the database of Insider Monkey held stakes worth $7.4 billion in Tesla, Inc. (NASDAQ:TSLA), compared to 73 in the preceding quarter worth $7.2 billion. 

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Tesla, Inc. (NASDAQ:TSLA) was one of them. Here is what the fund said:

“In 2014, before we began to invest in Tesla (NASDAQ:TSLA), I called Roger to ask whether he thought Elon Musk’s electric car business would succeed. I did not believe that Roger, an owner of dealerships that sell cars powered by internal combustion engines (ICE) would likely have a favorable opinion of Tesla’s prospects. That was principally for two reasons:

First, automobile manufacturing and distribution is unusually complicated, capital intensive, and highly regulated, which makes profitability problematic;

second, cars with ICE motors require extensive annual maintenance, and dealer services revenues, not profits from automobile sales, are the most important contributor to profits of perpetual licensed ICE car dealerships.

Penske Automotive Group is principally an ICE car dealer. Since electric cars are powered by batteries and need little service, franchised dealerships are incented to sell ICE, not EV automobiles. Further, Roger had been a long-term director of General Motors. General Motors’ ICE automobile business would be disrupted if Tesla were successful. (click here to read more…)