The decision of several hedge funds to liquidate their positions in Tesla ahead of the upcoming robotaxi launch is a notable signal for the market and is being widely discussed by investors and analysts. This development raises questions about the valuation of Tesla as well as expectations for the company.
Background: Sales by Prominent Hedge Funds
- Third Point (Daniel Loeb): The value-oriented hedge fund Third Point sold around 500,000 Tesla shares in the first quarter of 2025 – a position that was only added to the portfolio at the end of 2024. This is unusual as Third Point typically pursues an investment horizon of over a year. The quick exit suggests that confidence in Tesla was lost in a very short time.
- Coatue Management (Philippe Laffont): Coatue Management also significantly reduced its holdings, selling 600,000 shares – but still holds around 1.6 million shares.
- Motivation: The sales occurred despite the impending robotaxi launch and indicate growing skepticism about Tesla’s current valuation.
Reasons for the Sales
- Allegations of Overvaluation: Venture capitalists like Bradley Tusk openly criticize: “Tesla is massively overvalued.” They attribute this to the “magic dust” that Elon Musk spreads around him, as well as to the belief of many retail investors in his capabilities.
- Fundamental Data: In the first quarter of 2025, Tesla recorded a profit collapse of 71% alongside declining revenues (-9%). Particularly, automotive revenue shrank by 20%, highlighting challenges in the core business.
- Analyst Sentiment: Of a total of 37 analysts, only about half still recommend a buy rating; many suggest holding or even selling the stock.
Impacts on Price Development and Market Sentiment
- Price Reaction: Despite the poor fundamental data and the exit of major investors, Tesla’s stock showed temporary positive price developments – for instance, it rose significantly after the announcement of weak quarterly results. This reflects that many investors still believe in the narrative around AI and autonomous driving.
- Options Market & Volatility: Recently, a high trading volume was recorded on the options market – particularly in short-term call options. This indicates nervousness among traders.
- Long-Term Perspective: The sentiment remains mixed: while some major players exit or reduce their positions, others continue to hold shares or even place new hopes in technology themes like robotaxis.
Conclusion
The decision of several hedge funds to completely or partially liquidate their positions in Tesla before the robotaxi launch is a strong signal of uncertainty regarding the company’s current valuation. It reflects both doubts about the fundamental data as well as skepticism towards the narrative surrounding Elon Musk and future technology trends. At the same time, a certain resilience in the market is shown by optimistic retail investors and technically oriented traders – leading to volatile price developments.
For investors, this means increased scrutiny: the developments can have significant effects on Tesla’s stock price in both the short and long term – with potential implications for the entire EV market environment.