Yesterday, January 24, David Portnoy of Barstool Sports made significant moves in the stock market by purchasing Tesla (NASDAQ: TSLA) call options before the company’s earnings report.
Portnoy acquired $220 and $240 call options for March, aligning his investments with Tesla’s future performance. However, these investments have not fared well in the immediate aftermath, with his $220 calls down as much as 70% and the $240 calls down as much as 75% this morning.
Portnoy’s investment in Tesla calls mirrors his previous bold moves in the stock market, including his investment in Spirit Airlines amid its price crash, showcasing a pattern of engaging in high-risk, high-reward trading strategies.
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Tesla, a leading name in the electric vehicle (EV) industry, has experienced a notable decline, hitting its lowest level in eight months. The stock is currently trading at $186.55, reflecting a significant drop of 10.24% in a single day, at the time of publication.
This downturn in Tesla’s stock value is primarily attributed to its less-than-stellar earnings report.In the lead-up to the earnings announcement, there was considerable speculation about the content of Tesla’s report, focusing on its profitability in selling EVs, which is a unique position compared to most legacy automakers and rival EV startups.
Analysts had expected Tesla’s gross profit margins to have slightly increased in Q4 to 17.7%, yet this was significantly below the high margins achieved in 2022. Investors were particularly keen on understanding CEO Elon Musk’s vision for demand, future sales growth targets, and profit margins. The company reported vehicle deliveries growing 38% YoY to 1.81 million, with production growing 35% YoY to 1.85 million in 2023.
Tesla’s performance in 2024
Tesla’s start to 2024 has been turbulent, with challenges such as recalls and supply chain disruptions impacting its operations. CEO Elon Musk’s desire for more voting control over the company, expressing discomfort in leading Tesla’s AI and robotics initiatives without at least 25% voting control, has also been a point of discussion.
The company has faced manufacturing halts in its German factories due to supply chain issues, particularly affected by the conflict in the Red Sea. Despite these challenges, Tesla is actively showcasing its products globally, including a tour in China featuring the Cybertruck amid an Autopilot recall.
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