Tesla is in a bubble and is ‘falling’, says top fund manager

The shares of electric car maker Tesla will fall sharply as interest rates rise after the coronavirus crisis, Per Lekander, Lansdowne Partners’ fund manager, told CNBC.

Lekander told CNBC’s “Squawk Box Europe” on Tuesday that he thinks Tesla is in a bubble and that it is sold at Elon Musk’s company, which means it will make a profit if Tesla’s stock price falls.

Tesla’s market value skyrocketed to more than $ 800 billion in the 12 months preceding January, before dropping to less than $ 600 billion in February. It is now around $ 679 billion.

“My opinion is that this year will be the return for the owners,” said Lekander, citing German automaker Volkswagen, valued at 119 billion euros ($ 141 billion), as a company for which he is particularly optimistic.

“There are some gold nuggets, which I think will be the winners in the long run. But in the short run, I think if I am right in the so-called macro that interest rates go up and the market wakes up to (the fact that) the cardholders are not as badly positioned as they think, so yes, I think Tesla is falling. “

Some other market watchers are likely to disagree with this prediction. Wedbush analyst Dan Ives, for example, believes Tesla’s stock will recover after a volatile start to the year.

“Tesla’s success in raising its EV (electric vehicle) initiatives and demand in China for the month of March, which will catalyze higher stocks after an unstable January and a robust month in February,” Ives said in a note in Monday.

Tesla did not immediately respond to a request for comment from CNBC.

Lekander made comparisons to the dot-com boom of 1999.

“If you think about the visionaries who talked about the internet in 1999, if you now listen to them, they are in fact underestimating what happened,” he said. “The development was even more radical than what happened.”

He stressed that Cisco – arguably a poster girl for that period – has a much higher market value today than it did in 2000. “That didn’t stop it from falling 80% first,” he said.

The equivalent in Europe was probably Nokia, Lekander added, saying it also fell 80%.

“I think that is what we will see here in this space of technological speculation,” he said.

Last month, Tesla revealed that it had bought $ 1.5 billion in bitcoins. Technology research firm Wedbush believes the company has already made a profit of $ 1.2 billion from its investment.

Tesla officially gave CEO Musk the title “Technoking of Tesla” in a new regulatory process on Monday.

Musk will maintain his position as chief executive, Tesla said. Zach Kirkhorn, the company’s chief financial officer, also received a new title: “Master in coins”.

“We believe this indicates that Musk sees Tesla more as a technology disruptor in the future, especially with robotaxis, FSD (full self-driving) and massive advances in battery technology on the Tesla horizon,” said Ives.