Here's How Tesla Short Seller Stanphyl Capital's Fund Performed In 2022 As EV Maker's Stock Tumbled

After another brutal year in 2021, Tesla Inc TSLA short sellers had their best year ever in 2022 as a combination of a difficult macroeconomic environment and some questionable decisions by Tesla CEO Elon Musk sent Tesla's stock price down 65% on the year.

Spiegel’s Bearish Take: One of Tesla’s most vocal short sellers has been Stanphyl Capital Partners Managing Member & Portfolio Manager Mark Spiegel. In Stanphyl’s December letter to investors, Spiegel discussed his bearish take on Tesla and revealed just how much his Tesla short position impacted Stanphyl’s full-year returns in 2022.

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In the letter, Spiegel said he still considers Tesla grossly overvalued and is maintaining short positions in both Tesla and the SPDR S&P 500 ETF Trust SPY heading into 2023. Spiegel also admitted he pulled the plug too early when he exited his short position in the ARK Innovation ETF ARKK earlier in 2022.

“Tesla’s inevitable meltdown (alright, so I was a mere eight years too early!) was a big contributor to this year’s performance (and we remain short it, as I believe it has another 90% to go), as were our other short positions in the S&P 500 (via SPY) and, early in the year, the garbage-stock ETF ARKK (which I covered way too early, leaving lots of additional profit on the table),” Spiegel said.

While his short position in Tesla paid off big in 2022, Cathie Wood’s ARKK ETF also finished the year down 67%.

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Overall 2022 Performance: Despite a bearish outlook for the S&P 500 heading into 2023, Stanphyl maintains long positions in several value stocks, including automakers Volkswagen A G Unsponsored ADR VWAPY, Stellantis NV STLA and General Motors Company GM.

“GM is doing all the right things in electric cars, software and autonomous driving (via its Cruise ownership); in fact, Cruise is already running a fleet of fully autonomous cars in multiple U.S. cities—you can see many videos of this on its YouTube channel,” Spiegel said.

Spiegel also said Stanphyl has a long position in the SPDR Gold Trust GLD as a hedge against inflation.

Thanks in large part to the huge payoff on the Tesla short position, Stanphyl reported a 2022 full-year return of 75.5%, a gain that looks even more impressive compared to the S&P 500's nearly 20% decline on the year. Heading into 2023, Spiegel joked that his chances of repeating such an impressive performance this year are "roughly equal to the chance of Elon Musk offering me a board seat at Tesla."

Benzinga’s Take: Spiegel has taken a lot of criticism over the years for his bearish take on Tesla, which had certainly been costly prior to 2022. However, Stanphyl also reported a 25.9% gain in 2021 even with Tesla shares up 49.7% on the year, highlighting Spiegel's ability to effectively manage risk in his short positions as well.

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