Thursday, January 06, 2022
Wirecard hunter attacks Tesla
From Jan Gänger
Fraser Perring had the right nose at Wirecard. Now the speculator is targeting Tesla. But other short sellers have already burned their fingers by betting against the electric car pioneer.
British investor Fraser Perring makes (or loses) money by betting on stocks falling. Now he has found a well-known opponent: Tesla.
Perring is best known in the financial sector through the collapse of Wirecard. In the meantime he blew a tweet about the attack on Tesla and criticized a “price shift” compared to the share prices of Volkswagen and Toyota. The two largest automakers in the world are worth less than half as much on the stock market as the e-car pioneer – even though they were last Have sold around ten times as many cars each year.
Perring and his then company Zatarra Research & Investigations had already warned of irregularities in the now imploded financial group Wirecard in 2016 and thus repeatedly ensured that the share fell. In the meantime, the Briton was targeted by the German financial services regulator Bafin, which was investigating him for price manipulation. But research by the “Financial Times” confirmed the allegations. Wirecard granted air bookings in the billions. The payment processor is bankrupt, the former boss is waiting for his trial, and the CFO is on the run.
Perring is a so-called short seller. Such stock transactions are a common means on the stock exchange. Investors sell securities that they have previously borrowed from other market participants for a fee. If the share price falls by the return date, you can buy the stocks cheaper on the market and cash in the difference. If the price rises, however, the short sellers face a loss. In other words: Perring has an interest in ensuring that the share price of the companies he is targeting falls as low as possible.
The Briton often intensifies his attacks with extensive, aggressive studies that he publishes on the Internet through his new company Viceroy Research. This often brings him the accusation of market manipulation. Some of his attacks came nowhere. In the case of Tesla, Perring emphasizes that – in contrast to Wirecard, for example – he does not accuse the company of any irregularities.
“I never short just because companies are overvalued,” Perring added in an interview with “Bloomberg” with a view to Tesla. He only does that “if an absurd stock market valuation is justified with utter nonsense.” Tesla is conservatively estimated, overrated by at least a factor of 10.
Nevertheless, Perring is cautious in his Tesla speculation and, according to his own statements, only uses five percent of his portfolio on it. At Tesla you have to keep the risk under control. The background: In view of the rapid rise in the price of Tesla shares, short sellers have repeatedly burned their fingers with their bets against the company.
And then there is Elon Musk, currently by far the richest person on the planet. The Tesla boss has often messed with short sellers and has a deep dislike for them. In 2018, he tweeted that he would take Tesla off the stock exchange. The share price then shot up. A moment later, Musk rowed back. Big trouble ensued with the US Securities and Exchange Commission. But the eccentric billionaire had achieved what he wanted to achieve: bets from short sellers went completely wrong, they lost a lot of money.