Weekly Update

Hedge funds hit by Tesla shorts

Hedge funds betting against Tesla have taken a significant hit due to a strong rally in the company's share price. According to a Bloomberg report, Hazeltree tracked over 500 hedge funds, and by the end of June, 18% held short positions in Tesla, up from 15% at the end of March. These short positions, the highest in over a year, became a substantial liability following Tesla’s July 2 announcement of Q2 vehicle sales. Despite a decline in sales, the figures exceeded analyst expectations, boosting investor confidence. Tesla’s stock price has surged about 40% since the beginning of June, reaching a six-month high.

The report also cites Seth Goldstein of Morningstar, who predicts that Tesla’s profit margins will improve due to lower production and raw material costs, with a return to profit growth expected next year. However, Goldstein cautions that Tesla’s success will depend heavily on its strategy in the increasingly competitive market for affordable electric vehicles.

Elliott expands NYC office after moving HQ to Florida

Paul Singer’s Elliott Investment Management, one of the world’s largest activist investment firms, is planning to expand its office presence in New York City, four years after relocating its headquarters to Florida, according to a new report . The report states that the hedge fund has signed a new lease for 149,000 square feet at SL Green and Vornado Realty Trust’s 280 Park Avenue, with plans to move its New York offices from LeFrak’s 40 West 57th Street.

The $66 billion hedge fund will sublease 126,000 square feet on the sixth, seventh, and eighth floors from asset manager Franklin Templeton until the end of 2031. Additionally, Elliott Management has secured a direct 12-year lease for 23,000 square feet of vacant space on the building’s sixth floor. During the pandemic, Singer’s hedge fund relocated its headquarters to West Palm Beach but kept its Midtown office space and opened an office in Greenwich, Connecticut. A significant factor behind the move was that Jon Pollock, the co-chief investment officer and Singer’s expected successor, along with other senior executives, relocated to South Florida. Despite the headquarters shift, Singer himself has continued to spend most of his time in New York and Connecticut.

Jain Global taps Squarepoint PM

Jain Global, the new multi-manager hedge fund founded by former Millennium Management Co-Chief Investment Officer Bobby Jain, has hired Ali Rauf from Squarepoint Capital as a portfolio manager, according to Financial News. The report states that Rauf, who spent 18 months at Squarepoint focusing on discretionary USD rates trading, has joined the rates and macro team in Jain’s London office. Jain Global began trading at the start of this month with $5.3 billion in assets, making it the largest hedge fund launch since ExodusPoint Capital Management's debut in 2018.