1. Tesla, Inc. (NASDAQ:TSLA)
ARK Investment’s Stake Value: $1,094,679,000
Percentage of ARK Investment’s 13F Portfolio: 6.47%
Number of Hedge Fund Holders: 72
Tesla, Inc. (NASDAQ:TSLA) is an electric vehicle manufacturing company. It manufactures EVs and energy generation and storage systems for the U.S., China, and international markets.
Philippe Houchois at Jefferies holds a ‘Buy’ rating on Tesla, Inc. (NASDAQ:TSLA) shares as of August 26. The analyst also adjusted his price target on the stock to $350.
In the second quarter, Tesla, Inc. (NASDAQ:TSLA) had EPS of $0.76, beating estimates by $0.16. The company’s revenue was $16.9 billion, essentially in line with estimates. Tesla, Inc.’s (NASDAQ:TSLA) EPS is expected to grow by about 44.6% over the next three-to-five years.
Tesla, Inc. (NASDAQ:TSLA) was found in the 13F portfolios of 72 of the hedge funds tracked by Insider Monkey as of June 30, with their total stake value amounting to $7.2 billion.
Baron Funds, an asset management firm, mentioned Tesla, Inc. (NASDAQ:TSLA) in its second quarter 2022 investor letter. Here’s what it 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.
Regardless, I was right to have spoken with Roger. That was since he outlined numerous issues we needed to consider, study, and question before we determined whether we believed Tesla could be a successful business…before we ultimately chose whether to invest in that company.
When we completed our initial due diligence on Tesla, which diligence has been ongoing since 2014, we decided to invest $360 million in Tesla over the next two years. I then called Roger and outlined why I thought we could earn 20 times our capital over the next 10 years. Roger was so certain I was wrong that he offered to bet me $1 million that Tesla would fail. “Roger, I can’t bet you a million dollars. First, if you are right, I couldn’t afford to pay you. Second, if I’m right, you’re my friend, and I couldn’t take your money.” We settled on a dinner bet…”
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