Tesla (TSLA):Facing Temporary Challenges

Investment management company Worm Capital recently published its Second Quarter Investment letter 2022, which can be downloaded here. The funds generated -16.42% returns for the Long/Short equity and -11.79% for long-only equity in June. Since its inception, the fund is able to generate 17.71% overall returns for Long/Short equity and 25.95% for long-only equities. The fund always experiences good returns in long term. To have a glimpse of its finest picks for 2022, check out the top 5 holdings of the fund.

In the Q2, 2022 investor letter Worm’s Capital analyzed Tesla, Inc. (NASDAQ:TSLA) and explained its performance and challenges. Tesla, Inc. (NASDAQ:TSLA) is an automotive company headquartered in Austin, Texas, and has a market capitalization of $846.5 billion. The one-month return of Tesla, Inc. (NASDAQ:TSLA) is 11.16% while its 12-month return is 24.19%. The stock closed at $816.73 per share on July 22, 2022.

Here is what Worm Capital observed about Tesla, Inc. (NASDAQ:TSLA) in its investor letter Q2 2022:

”To be clear, this quarter presented significant—but temporary—challenges for Tesla. In particular, Covid-related shutdowns caused a multi-week idling of Tesla’s factory in Shanghai, which halted all vehicle production. Supply chain issues have also persisted globally, limiting Tesla’s true production capacity.

These challenges—combined with macroeconomic factors—have certainly weighed on Tesla’s stock price year-to-date. Looking forward, however, we remain increasingly bullish on both the business and its stock price. Tesla achieved record production in June 2022. Barring no future factory shutdowns, we believe Tesla is poised to accelerate production in the coming years—far beyond consensus expectations.

This quarter, we also released a 90+ page research report detailing our view on Tesla’s near-term and long-term structural advantages, its opportunities, and its likely growth trajectory. We invite you to read the report here. The report covers many substantive themes—from Tesla’s lead in artificial intelligence to its extreme vertical integration. At a very high level, we believe Tesla is on a path to dominate the S&P 500. And we believe this could happen sooner than many people might believe…” (Click here to see the full text)

Although Worm Capital is invested in Tesla, Inc. (NASDAQ:TSLA), the stock isn’t in the list of 30 Most Popular Stocks Among Hedge Funds. at the end of the first quarter of 2022 Tesla, Inc. (NASDAQ:TSLA) was in 80 hedge fund portfolios fell from 91 in the previous quarter. Tesla, Inc. (NASDAQ:TSLA) shares lost 25% of their value over the last 52 weeks.

We published another article in the mid of June and shared another hedge fund, Grantham Mayo Van Otterloo & Co. LLC’s views on Tesla, Inc. (NASDAQ:TSLA). You can check on our hedge fund investor letters 2022 Q2 page for other investor letters from hedge funds and leading investors.

Disclosure: None. This article is originally published at Insider Monkey.

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