FILE PHOTO: Stanley Druckenmiller, former chairman and president of Duquesne Capital, speaks during the Sohn Investment Conference in New York City, U.S., May 8, 2017. REUTERS/Brendan McDermid
NEW YORK (Reuters) – Billionaire investor Stanley Druckenmiller bet against electric carmaker Tesla Inc during the fourth quarter, wagering that its share price will fall, according to quarterly filings released on Thursday.
Druckenmiller’s family fund, which shares the name of the hedge fund Duquesne Capital that he founded in 1981, bought put options on Tesla shares worth $99.8 million, a Security and Exchange Commission filing revealed.
The option contract allows the fund to sell the shares at a set price before a set time, implying Druckenmiller believes Tesla’s share price will fall before the contract expires. Neither the strike price nor the maturity of the contract is public.
Tesla’s shares have fallen 6.61 percent since the start of the year after a volatile 2018 in which its price vacillated within a $134 range.
Tesla has $920 million in convertible debt coming due on March 1, which is expected to put pressure on the company, which has previously struggled to maintain a positive cash flow.
Convertible issues give bondholders the right to trade their debt for equity after shares rise over a certain price. Tesla shares are currently more than $50 below the $359.87 conversion price after closing on Thursday at $303.77.
Quarterly disclosures of hedge fund managers’ stock holdings, in what are known as 13F filings with the U.S. Securities and Exchange Commission, are one of the few public ways of tracking what the managers are selling and buying. But relying on the filings to develop an investment strategy comes with some risk because the disclosures come 45 days after the end of each quarter and may not reflect current positions.
(This story refiles to add “within a range” in paragraph four to clarify that $134 is the amount of change in the share price.)
Reporting by Kate Duguid; Editing by Dan Grebler