Tesla is in a bubble and “down,” says the top fund manager

Shares of electric car maker Tesla will experience sharp falls as interest rates rise after the coronavirus crisis, Lansdowne Partners fund manager Per Lekander told CNBC.

Lekander told CNBC’s “Squawk Box Europe” on Tuesday that he believes Tesla is in a bubble and has no Elon Musk company, meaning he will make a profit if the value of Tesla’s shares falls.

Tesla’s market value rose to more than $ 800 billion in the twelve months leading up to January, before falling to less than $ 600 billion in February. It now stands at around $ 679 billion.

“My idea is that this year will be the return for the headlines,” Lekander said, calling on German carmaker Volkswagen, which has a value of 119 billion euros ($ 141 billion), as a company in which is especially bullish.

“There are some golden seeds, which I think will win in the long run. But in the short term, I think if I’m right on the macro call, interest rates will rise and the market will wake up (the fact that) the headlines aren’t as badly positioned as you think, so yes, I think Tesla is going down. “

There will likely be other market observers who disagree with this prediction. Wedbush analyst Dan Ives, for example, believes Tesla shares will recover after a volatile start to the year.

“Tesla’s success boosted its initiatives and the demand for electric vehicles (EVs) in China for the month of March will catalyze the highest stocks after a shaky January and a robust month of February,” he said Ives on a note Monday.

Tesla did not immediately respond to a request for comment from CNBC.

Lekander made comparisons to the 1999 dot-com boom.

“If you think about the visionaries who talked about the Internet in 1999, if you listen to them now, they’re really belittling what happened,” he said. “The development was even more radical than what happened.”

He noted that Cisco, arguably a poster child of that period, has a much higher market value than in 2000. “It didn’t stop it from going down 80% first,” he said.

The equivalent in Europe was probably Nokia, added Lekander, who said it also dropped 80%.

“I think that’s what we’re going to see here in this technical advertising space,” he said.

Last month, Tesla revealed that it had bought bitcoin worth $ 1.5 billion. Technical research company Wedbush believes the company has already made a profit of $ 1.2 billion with its investment.

Tesla officially gave CEO Musk the title of “Tesla Technification” in a new regulatory filing Monday.

Musk will maintain his position as CEO, Tesla said. Zach Kirkhorn, the company’s chief financial officer, has also received a new title: “Master of Coin”.

“We believe this suggests that Musk will consider Tesla more as a technology disruptor in the future, especially with robotaxis, FSD (full self-driving) and massive battery technological advances on Tesla’s horizon,” Ives said.