To The Moon

My Wednesday post on $Tesla Motors(TSLA)$ was Morningstar’s assessment of why it is not worth more than $250. Click here ! for details, Repost to share ok. Thanks. Today, I came across a post from Motley Fool whose assessment of the EV maker was based entirely on a different set of matrices. After reading, I decided to share it because I find the catalysts mentioned to be current and salient. Special day - 14 Feb. Wall Street always has lots of important information coming out. Weekly, investors see economic reports and company earnings. Recent, Friday, 14 Feb 2025 was extra special for investors, for reasons other than Valentine's Day. Institution Investors’ Compliance. You see, big investors who manage $100 million or more must file a special form (Form 13F) with US’s Securities and Exchange Commission (SEC) . It must be submitted within 45 days after each quarter ends. What is 13F ? It offers a snapshot that allows retail-investors to see which stocks Wall Street's leading Money Managers purchased and sold in the latest quarter. And Fri, 14 Feb 2025 marked the deadline for 13Fs to be filed for December 2024-ended quarter. Guru - Ole Andreas Halvorsen. Although US asset managers like Warren Buffett, Bill Ackman, Michael Burry are the “defacto” asset managers that many investors (myself included) pay closer attention to. Gratefully, I just learnt thru the Motley’s post that there is another guru that is on most investors’ radar. He is 64-year-old, Norwegian billionaire - Mr Ole Andreas Halvorsen - co-founder & CEO of Viking Global Investors. As of 31 Dec 2024, Viking Global Investors’ asset under management (AUM) was $30.9 billion, spread across 86 stocks. Viking - What’s so special ? Halvorsen and team run an Active fund, with the average holding length of Viking Global's Top-20 positions coming in at less than one year. This makes his buying and selling decisions all the more intriguing for everyday investors. Viking strategy - Deep dive. Viking’s strategy is unique because of the 7 key factors: Balanced diversification: Halvorsen combines public and private investments, balancing stable cash generators in public markets with high-growth companies in private markets. This approach reduces risks and improves risk/return ratios. Long/short equity expertise: Viking employs a disciplined long/short strategy, profiting from undervalued opportunities while shorting overvalued stocks. This allows them to generate returns regardless of overall market direction. Focus on fundamentals: Halvorsen emphasizes solid fundamentals and sustainable advantages in both public and private markets, avoiding speculative trends1. Private market focus: Viking manages a significant private portfolio worth over $15 billion, targeting sectors like healthcare, life sciences, and enterprise software14. Disciplined analysis: Every investment undergoes a thorough multi-stage vetting process, reflecting Halvorsen's belief in well-thought-out analysis and disciplined valuation over time2. Adaptability: Halvorsen's military background contributes to a unique decision-making process and the ability to adapt quickly to changing market conditions1. Patience: Halvorsen emphasizes the importance of patience in investing, recognizing that successful strategies often require time to play out. Between Viking and Tesla. Referencing Viking’s 13-F, it is found that: In Q4 2024, Viking Global Investors divested more than 12 stocks in its holdings. Tesla (all 436,272 shares) was one of them. The sale helped Viking to raked in, easily more than $114 million (based on estimation dated 30 Sep 2024). Tesla fans would know that Viking sale would have raked-in much, much, more than $114 million estimated in September 2024. (see above) Reason being, Tesla stock price that had been hovering around the $200-$250 banding for better part of 2024, has taken off with Trump’s election win on 06 Nov 2024. It even peaked at $479.86 per share on 17 Dec 2024. The Sale. Superficially, Viking's sale of Tesla could be viewed as nothing more than simple profit-taking. It remained a fact that after Trump’s election win, Tesla’s shares did soar +91% in 6 short weeks. The return of Trump to the White House has been viewed as positive for Tesla, with Musk working as a special government employee for the Department of Government Efficiency (DOGE). More Than Meets The Eye. However, there may be other more nefarious reasons why Viking Global's billionaire chief chose to kick Tesla to the curb. (1) Profit margin. Firstly, Tesla's vehicle margin has plummeted due to (a) growing competition and (b) waning demand for EVs. Since the start of 2023, Tesla slashed the price for its fleet of EVs (Models 3, S, X, and Y) more than 6 times. This has helped to reduce inventory a bit in recent quarters but decimated the EV’s margin and weighed heavily on its profits. (2) Distraction. There's also the obvious concern that Mr CEO is spending most of his time overseeing DOGE instead of running Tesla. Tesla's otherworldly valuation premium derives, in part, from investors believing in Musk's vision for the future. Distractions like DOGE may cause Tesla to fall short of various growth expectations. (3) Unsustainable Net Income growth. Another potential issue is that Tesla generates a sizable percentage of its net income from unsustainable and non-innovative sources. More than 50% of Tesla's 2024 pre-tax profit could be traced back to: Regulatory automotive credits. Interest income earned on its cash. Digital asset value adjustments. Tesla holds Bitcoin on its balance sheet. The point being that Tesla's operations are not responsible for the lion's share of its profit. (4) Likelihood of delays. Mr Halvorsen might be concerned with Musk's inability to meet deadlines and hold true to his promises. Many of Musk's promises and visions, eg. Robotaxis and Level 5 full self-driving (FSD), are already baked into Tesla's valuation. However, Tesla is nowhere close to L5 FSD, and it has not put a single robotaxi on public roads. If these unfulfilled promises were backed out of Tesla's market cap, a case can be made that its share price would plunge. To quote Mr Buffett’s investment mantra - "Price is what you pay, value is what you get." provides clarity to Mr Halvorsen’s action course, no ? Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks. CRWD strikes again, post PCE cooling data ? Magnificent 7 : Bear Market Proof ? NVDA saved by PCE Inflation Report ? Do you think you will “take note” of Mr Halvorsen & Viking Global Investors from now onwards, I would ? Do you think the reasons behind the divestment is logical and sound OR there’s still more left to milk from Tesla before exiting ? If you find this post interesting, give it wings! ️ Repost and share the insights ? Do consider “Follow me” and get firsthand read of my daily new post. Thank you. @Daily_Discussion @TigerPM @TigerStars @Tiger_SG @TigerEvents