Altimeter's Brad Gerstner Buys Tesla Stock, Says Elon Musk-Led Company Is Following Apple's Playbook
Altimeter Capital's Brad Gerstner has announced a new position in Tesla Inc TSLA.
What to Know: Gerstner was bearish on Tesla in 2019 and 2020, fearing that Elon Musk's EV business was undercapitalized and could be headed for bankruptcy.
"Fast forward two years. The world has changed dramatically," Gerstner said Thursday on CNBC's "Fast Money Halftime Report."
Thin capitalization is no longer an issue and bankruptcy is completely ruled out, he said, adding that there are two other contributing factors to consider.< /p>
First, the world is going big due to the geopolitical and energy realities we currently face, he said. This has prompted a move towards electrification, but only around 8% of the market is reached, he said.
"That 8% penetration is likely to grow at a CAGR of 30-40% over the next five to 10 years," Gerstner said.
In addition, governments around the world are supporting electrification efforts, whether through investments in battery technologies, the addition of charging stations, or the adoption of legislation that supports the transition to electricity, he said.
So why Tesla? Gerstner thinks Tesla is way ahead of the competition in the space.
"They have 30% margins. Their competitors are executing 10% at best, and I think they have a cumulative advantage in the world," he said.< /p>
While Altimeter Capital expects Tesla's market share to remain steady at around 15%, that's 15% of a "high-growth market," said Gerstner: "And we think they're going to be a much higher percentage of the profit pool in electric vehicles, in energy storage, et cetera."
He compared Tesla to Apple Inc AAPL, which makes up a large portion of the profit pool in its space but has a much smaller share of actual units sold, he said .
"We think Tesla is following this playbook and, you know, they've built a company that, frankly, is expanding its moat and extending its lead over OEMs, who are struggling with a bunch of ICE heritage," Gerstner said.
See also: Tesla Vs. Fisker Vs. Rivian vs. Lucid: Analyst digs into EV makers as adoption kicks into high gear
TSLA Price Action: Tesla has a 52-week high of $414.50 and a 52-week low of $206.86. The stock rose 1.31% to $306.85 on Thursday afternoon.
Photo: Courtesy of Tesla
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Altimeter Capital's Brad Gerstner has announced a new position in Tesla Inc TSLA.
What to Know: Gerstner was bearish on Tesla in 2019 and 2020, fearing that Elon Musk's EV business was undercapitalized and could be headed for bankruptcy.
"Fast forward two years. The world has changed dramatically," Gerstner said Thursday on CNBC's "Fast Money Halftime Report."
Thin capitalization is no longer an issue and bankruptcy is completely ruled out, he said, adding that there are two other contributing factors to consider.< /p>
First, the world is going big due to the geopolitical and energy realities we currently face, he said. This has prompted a move towards electrification, but only around 8% of the market is reached, he said.
"That 8% penetration is likely to grow at a CAGR of 30-40% over the next five to 10 years," Gerstner said.
In addition, governments around the world are supporting electrification efforts, whether through investments in battery technologies, the addition of charging stations, or the adoption of legislation that supports the transition to electricity, he said.
So why Tesla? Gerstner thinks Tesla is way ahead of the competition in the space.
"They have 30% margins. Their competitors are executing 10% at best, and I think they have a cumulative advantage in the world," he said.< /p>
While Altimeter Capital expects Tesla's market share to remain steady at around 15%, that's 15% of a "high-growth market," said Gerstner: "And we think they're going to be a much higher percentage of the profit pool in electric vehicles, in energy storage, et cetera."
He compared Tesla to Apple Inc AAPL, which makes up a large portion of the profit pool in its space but has a much smaller share of actual units sold, he said .
"We think Tesla is following this playbook and, you know, they've built a company that, frankly, is expanding its moat and extending its lead over OEMs, who are struggling with a bunch of ICE heritage," Gerstner said.
See also: Tesla Vs. Fisker Vs. Rivian vs. Lucid: Analyst digs into EV makers as adoption kicks into high gear
TSLA Price Action: Tesla has a 52-week high of $414.50 and a 52-week low of $206.86. The stock rose 1.31% to $306.85 on Thursday afternoon.
Photo: Courtesy of Tesla
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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