Money manager bought Tesla put options in Q4 as stock rose

Published Fri, Feb 15, 2019 · 09:50 PM

New York

TESLA Inc rose 26 per cent in the last three months of 2018 as the electric carmaker reported a third-quarter profit, analysts turned more optimistic and legal headaches caused by tweets from founder Elon Musk faded.

Stanley Druckenmiller may have had his doubts. His Duquesne Family Office bought put options on Tesla's shares during the fourth quarter, an investment that typically benefits if a stock declines. A regulatory filing shows it held put options on 299,800 Tesla common shares with a face value of US$99.8 million as of Dec 31. Tesla shares have sunk more than 8 per cent this year.

Mr Druckenmiller, a former money manager for George Soros, converted his hedge fund into a family office in 2010. He has a net worth of US$5.1 billion, according to the Bloomberg Billionaires Index.He predicted that markets will struggle over the next few years, after easy-money policies implemented in the wake of the financial crisis fuelled debt and poor investments.

"The air can be let out of this balloon without causing another financial crisis," Mr Druckenmiller said in December. "But it's hard to believe at least markets will not have struggling returns the next three to five years." He said the S&P 500 could return between zero and 5 per cent annually over the next five years. BLOOMBERG

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