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Kass on Tesla

Stocks in this article: TSLAAAPL

Tesla Gets Riskier


Feb. 14, 2014 | 12:24 p.m. EST

I have been uncharacteristically positive on Tesla Motors (TSLA) particularly in my 15 Surprises for 2014.

But I would note that the stock has had a monster run, and before anyone puts too much into Tesla, you should check out what Audi is doing with synthetic fuel.

Audi's initiative is more efficient than gasoline, has a zero-carbon footprint -- that is, it consumes as much in production as it emits in combustion -- and is produced from microorganisms (which can be reproduced and grown in any quantity).

It could be distributed by existing filling stations all over the country, and it could be used to power small generators on cars to produce their own electricity for their electric motors.

No new infrastructure; no additional pollution creating the electricity to power all those pure electrics, smaller battery packs (which are themselves quite dangerous to the environment), etc.

Tesla's shares are now risky as an investment or trade.


Shorted Tesla


Feb. 18, 2014 | 8:26 a.m. EST

I have taken a small short position in Tesla at $205 in premarket trading.

This goes directly against one of my short selling tenets -- namely, shorting high interest stocks (short interest is 29 million shares against about an 84 million share float).

On Friday I wrote a quick blurb on Tesla.

As of Friday's close, Tesla's market cap is almost $24 billion, and in my view, the discussions between Apple (AAPL) and Tesla were likely centered more around joint ventures than an acquisition.

Stated simply, I can't believe that Apple would be so stupid as to acquire Tesla.

What many fail to see is that when Tesla and Apple talked last spring, Tesla's shares stood at only $50 a share, or 25% of today's price.

In other words, last spring Tesla was capitalized at "only" $6 billion -- today the equity capitalization is $24 billion.


Adding Tesla Short to Best Ideas List


Feb. 18, 2014 | 12:19 p.m. EST

The more I think and write about it the more I like my Tesla short.

I am adding the name to my Best Ideas list (short) now.

Here is the San Francisco Chronicle story that caused the interest over the weekend.


This content originally appeared on Real Money Pro on Feb. 14 and Feb. 18.

At the time of publication, Kass and/or his funds were long AAPL and short TSLA, although holdings can change at any time.

Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.

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