The protagonists of Michael Lewis’ “The Big Short,” who once capitalized massively from the collapse of subprime mortgage loans, are back in the spotlight, this time setting their sights on an eclectic mix of targets, from electric vehicles to AI lending platforms.
Tesla: The Underperformer in Seawolf’s Lens
Porter Collins and Vincent Daniel of Seawolf Capital, alongside their notable peers from the original ‘Big Short’ saga, are charting new territories in their investment strategies. Collins, in particular, has cast a critical eye on Tesla, marking it as one of the firm’s most lucrative short positions this year. With Tesla’s shares plummeting nearly 23% in 2024, following a disappointing earnings report, Collins’ skepticism seems well-placed.
“This has been a big underperforming stock, and so I think they really have problems with sales,” Collins remarked, challenging the prevailing view of Tesla as a tech juggernaut. Instead, he posits that it’s time the market recognizes Tesla for what it truly is—an auto company grappling with less-than-stellar technology.
UPS: Facing Headwinds
The scrutiny doesn’t stop with Tesla. Collins and his team at Seawolf are also betting against UPS, another giant that recently stumbled, missing Wall Street’s revenue expectations. With a significant drop in shipping volumes and the announcement of 12,000 layoffs in a bid to curtail costs, UPS’s challenges underscore the broader economic pressures facing global logistics and delivery services.
Eisman’s Bet on Infrastructure
Steven Eisman, another ‘Big Short’ alum, is diverging from his peers by taking a bullish stance on infrastructure. With a keen eye for sectors poised to benefit from significant government spending, Eisman is placing high conviction bets on companies involved in building roads, factories, and those at the forefront of automation and reshoring of manufacturing.
“The government is going to be spending about $1.2 trillion over the next 10 years. So there are a lot of things to do,” Eisman noted, highlighting the potential for growth in the infrastructure domain, albeit with the caveat that this doesn’t rival the conviction he had during the days of “The Big Short.”
Upstart: The Controversial AI Lender
Danny Moses, now an advisor at RiskReversal Media, is setting his sights on Upstart, an AI-driven lending platform that, in his view, is vastly overvalued. With the company struggling to offload the loans it originates, Moses sees a fundamental mismatch between its market valuation and intrinsic value. “It’s a lending company,” Moses stated bluntly, cutting through the tech-centric branding that has buoyed Upstart’s image.
The Big Picture
As these financial veterans navigate the tumultuous waters of today’s markets, their moves are a reminder of the ever-present opportunities and risks in betting against the grain. Whether it’s challenging the valuation of tech darlings like Tesla and Upstart, or identifying potential windfalls in traditional sectors like infrastructure, the essence of “The Big Short” lives on—albeit in new forms and contexts.
With the wisdom of their past triumphs and failures as their guide, these investors are not just betting against companies; they are making calculated assertions about the broader economic and technological trends shaping our world. As always, the real question remains: who will have the last laugh when the dust settles on these new big shorts?
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