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Tesla (TSLA) surges to near-record high on mysterious new investor buying big
Tesla (TSLA) is surging to a new, near-record high on investors buying big into the stock following the announcement that it will be added to the S&P500.
Even Warren Buffett is rumored to be buying into Tesla.
Over the last two days, since it was confirmed that Tesla will be added to the S&P500, the stock has been surging.
It went up 8% yesterday, and it is extending its gains today by now trading 10% up intraday.
The result is that Tesla added now around $80 billion in valuation to its stock over two days.
On top of the announcement of the S&P500 inclusion, Tesla’s stock was also helped by a price target increase from Morgan Stanley.
However, it’s hard to justify such a massive increase in valuation from just this new information.
An interesting theory is that some big investors are now heavily investing in Tesla, and a particularly interesting theory is that famed investor Warren Buffet might be investing big.
Frank Peelen found that about 50 million Tesla (TSLA) shares have disappeared into the hands of currently unknown investors based on the 13F filings, which disclose large ownerships:
2/16 I made a small mistake, so the number is actually a little over 50M shares, but nonetheless this is a large number of shares that can't be explained away by retail buying, delta hedging, and smaller institutional investors increasing their stakes. — Frank Peelen (@FrankPeelen) November 18, 2020
This is particularly interesting in the context of Berkshire Hathaway, Warren Buffett’s investment firm, filing for a confidential investment in a new company that it didn’t want to disclose in order to not overly affect the market.
The new investment could be worth around $11 billion.
An investment of that size would most likely result in a more than 5% ownership in most companies.
Unless they managed to obtain an exception from the SEC, the company has to be quite large for an investment of that size not reaching the 5% ownership threshold for disclosure:
9/16 Another important piece of information is the size of this position, and implications it has on 13D/13G filings. Companies have to disclose an acquisition of a 5%+ stake in a company within 10 days to the SEC. So unless $BRK was also allowed to keep this confidential… — Frank Peelen (@FrankPeelen) November 18, 2020
There are only 25 companies listed on US exchanges big enough to not reach the threshold, and Berkshire Hathaway owns nine of them and is one of them.
Tesla would be one of the few companies big enough that the investment would make sense.
Peelen argues that the missing Tesla shares and this mysterious investment from Berkshire Hathaway make for an interesting theory that Buffett might have acquired a stake in Tesla.
Buffett and Elon Musk have butt heads before.
The former invested in BYD, a Chinese electric vehicle manufacturer, and Musk previously laugh at the vehicles that they were producing.
Buffett also owns a lot of car dealerships in the US, which have lobbied against Tesla’s direct sale model.
Furthermore, Buffett has lobbied against solar initiatives in Nevada, where he owns the largest electric utility.
I am certain a bunch of massive investors are buying into Tesla now, resulting in this massive surge.
Buffett would actually be one of the last investors I would have thought would be buying into Tesla.
He generally invests in fundamentals, and you don’t invest into Tesla based on fundamentals.
However, he is toward the end of his career and slowly letting go of the reins at Berkshire Hathaway, and maybe other leaders at the firm like Tesla?
Anyway, it’s speculation at this point.
What do you think? Let us know in the comment section below.
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