A short-position in Tesla was Greenlight Capital's biggest loser in 2020, according to the hedge fund's fourth-quarter investor letter published Thursday.
Greenlight's portfolio was crushed by losses from its position betting against Tesla in 2020, which saw the EV maker soar 740%. As a result of the stock's boom, the hedge fund said it adjusted its position ahead of Tesla's inclusion in the S&P 500.
Greenlight founder David Einhorn has had a long-time short wager against Tesla, and even feuded with Elon Musk in 2019. He's not the only Tesla short-seller who had a difficult 2020: Jim Chanos said in December his short position was "painful" and he reduced the size of his bet against the EV maker's stock.
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Greenlight's letter didn't hold back against its critique of the stock. Greenlight said Tesla cars are not a "fad" but owning the stock is. The firm also tore into Tesla's valuation, which has ballooned to more than $800 billion. As of Thursday, Tesla is trading at a price-to-earnings multiple of 1,699 times.
"The fad is in owning TSLA stock. We have quipped before that twice a silly stock price is not twice as silly, it's still just silly. But what about 20 times a silly price?" said Greenlight. "Of course, there is the possibility that we are just wrong and bad at measuring silliness. But setting that aside, we think that the answer is that certain stocks are held exclusively by valuation indifferent investors."
The firm also highlighted that during the 2000 internet bubble Cisco Systems Inc maxed out at 29 times revenue, which is lower than Tesla's current price to revenue ratio of 33.
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Shares of Tesla fell as much as 1% on Thursday to $841 before paring some losses.
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