Lucid Group shares fell as much as 10% in Thursday’s premarket after a disappointing earnings update.
The EV maker missed on revenue and said it will make fewer cars this year than Wall Street expected.
Demand for its luxury electric cars has taken a hit as rival Tesla’s grows thanks to aggressive price cuts.
George Soros, Steve Cohen, and Jim Simons’ funds piled into Tesla and other trendy names last quarter, while Jim Chanos took aim at meme stocks. Here’s a roundup of 5 key trades.
Several elite investors took positions in Tesla and other trendy stocks last quarter.
George Soros, Steve Cohen, and Jim Simons’ funds bet big on Elon Musk’s car company.
Short seller Jim Chanos placed wagers against Tesla, AMC, and other high-flying stocks.
Some of the world’s top investors piled into Tesla and other trendy stocks last quarter, while a notable short seller bet against them.
George Soros, Steve Cohen, and Jim Simons’ funds bought shares of Elon Musk’s automaker in the three months ended December 31, Securities and Exchange Commission filings revealed this week. Meanwhile, Ray Dalio’s hedge fund boosted its bets on GameStop and AMC Entertainment, two classic meme stocks.
In contrast, Jim Chanos ramped up his wager against Tesla, and revealed a slew of bearish positions in AMC and other popular stocks.
Here are 5 big funds that placed bets on Tesla and other trendy stocks last quarter:
1. Soros Fund Management
Soros Fund Management scooped up about 42,000 Tesla shares last quarter. The purchases increased its stake by almost half to around 132,000 shares, worth over $16 million as of December 31.
George Soros’ fund also bought bullish call options on another 200,000 shares of the automaker. Those likely paid off, given the roughly 60% rise in Tesla’s stock price this year.
2. Point72 Asset Management
Steve Cohen’s Point72 Asset Management grew its stash of Tesla call options from 50,000 to 60,500 last quarter.
The New York Mets owner’s hedge fund also purchased 878,000 Tesla shares worth $108 million at the end of December, propelling Musk’s company into the top 60 of its nearly 1,500 holdings at the year end.
Moreover, Point72 built a new stake in GameStop, the video-game retailer that became the ultimate meme stock in January 2021. The fund’s 606,000 shares were worth $11 million as of December 31.
3. Renaissance Technologies
Jim Simons’ Renaissance Technologies raised its Tesla stake from 1,400 shares to 3.4 million last quarter. The purchases lifted the value of its position by more than 1,000 times, from under $400,000 to over $400 million as of December 31.
It’s worth noting the fund relies on algorithms to decide many of its trades and frequently changes its positions, limiting the insight offered by its quarterly filings.
4. Bridgewater Associates
Ray Dalio’s Bridgewater Associates almost tripled its stake in GameStop to nearly 39,000 shares last quarter. Its bet on the video-game retailer was valued at $712,000 at the end of December.
The billionaire investor’s hedge fund also nearly tripled its stake in fellow meme stock AMC to around 64,000 shares. Its position in the movie-theater chain was worth $261,000 at the year’s close.
5. Chanos & Company
Jim Chanos’ fund massively ramped up its bet against Tesla and placed bearish wagers against meme stocks, cryptocurrency companies, and high-flying technology stocks last quarter.
Chanos & Company held put options on 131,000 Tesla shares as of December 31, up from only 5,900 shares three months earlier. It also bought puts on AMC, Digital World Acquisition Corporation, Coinbase, Microstrategy, and DoorDash last quarter.
6/6 SLIDES
Electric-vehicle maker Lucid Group‘s stock price slumped ahead of Thursday’s opening bell after the Tesla rival released disappointing guidance for the year ahead.
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Shares fell 10.1% to $8.97 in premarket trading after the luxury electric car manufacturer said it would make fewer cars than Wall Street expected this year. It also reported weak order numbers in its fourth-quarter earnings release, in a potential sign of faltering demand.
In the results, published after the market close Wednesday, Lucid said it plans to produce between 10,000 and 14,000 vehicles this year. That’s well below the 21,815 projected by analysts, according to Visible Alpha.
The company also said it had produced 7,180 cars last year but only delivered 4,369 of those. That suggests it’s struggling to maintain demand in the face of Tesla’s aggressive price cuts.
“We’ve gotten past the major bottlenecks limiting manufacturing, but this had some impact on the demand we generated early on, and this has been exacerbated by the challenging macroeconomic environment,” Lucid CEO Peter Rawlinson said on a call with analysts Wednesday.
The EV maker reported a loss of 28 cents per share, narrower than the loss of 40 cents a share forecast. It missed on revenue, which grew quarter-on-quarter to almost $258 million, but fell short of the $303 million expected by analysts, according to Refinitiv.
Rival Tesla kicked off a price war for electric vehicles in Asia late last year in a bid to revive faltering demand. It followed up on that by slashing the price of its Model 3 and Model Y cars by between 6% to 20% in the US last month.
Lucid responded with price cuts of its own in February and currently offers a $7,500 discount on certain models of its Air Sedan that are ordered before the end of March.
If Thursday’s premarket slide holds into the session, that would dent some of the gains the EV challenger has made in 2023. It’s up 46% year-to-date, compared with a 63% jump for Tesla.
Lucid’s stock has risen as part of a broader tech rally. It’s also been boosted by rumors of a looming takeover by Saudi Arabia’s Public Investment Fund, which invests on behalf of the government and already owns over 60% of the carmaker’s shares.
