Gary Zhou 
Key Takeaways
- Christer Gardell, a Swedish billionaire and hedge fund manager, has issued a warning about the potential 95% crash risk facing Tesla stock.
- Gardell criticizes Tesla due to what he describes as the “circus” surrounding CEO Elon Musk, impacting the company’s stock valuation.
- Gardell views Tesla fundamentally as a car company and questions the high market valuation despite its diversification into areas like AI and robotics.
- The hedge fund manager describes Tesla’s valuation as part of an “eternal bubble” in speculative markets, suggesting the stock price doesn’t reflect true value.
- Gardell notes the unpredictability of when a market crash might occur but predicts it would be dramatic once it happens.
- Gardell believes the U.S. stock market is overvalued and contrasts this with European stocks, which he sees as offering more value with a larger discount.
Swedish billionaire and hedge fund manager Christer Gardell has issued a stark warning about Tesla’s stock valuation, suggesting it could drop by as much as 95%. In an interview with EFN, Gardell criticized what he called the “circus” surrounding Tesla CEO Elon Musk and expressed skepticism about the electric vehicle maker’s sky-high valuation.
Tesla’s Alleged Overvaluation
Gardell believes Tesla is still fundamentally a car company, making its market valuation difficult to justify. He questioned why investors continue to assign such a premium to the EV maker, despite its expansions into energy, AI, and robotics.
“Tesla, especially now with the whole Musk circus going on everywhere, is probably the most expensive stock on the global stock exchanges right now. It could go down 95% – and maybe it should go down 95%,” Gardell said.
The “Eternal Bubble” in Tesla Stock
Gardell sees Tesla as the prime example of a market driven by speculation rather than fundamentals. He suggested that Tesla’s valuation has been in an “eternal bubble” for years, yet it has continued to defy expectations. However, he warned that once the bubble bursts, the collapse would be severe.
“It’s always hard to say when. It could happen in a month, six months, a year, three years, or five years – it’s impossible to answer. Because there’s so much money dominating the stock market now, and they don’t care about the value of the shares, they speculate on price movements,” he noted.
Broader Market Risks: U.S. Overpriced, Europe Undervalued
Beyond Tesla, Gardell raised concerns about the broader U.S. stock market, calling it significantly overvalued from both an absolute and historical perspective.
“American stocks have received very large flows recently. If you look at the American stock market, it is very expensive, both from a purely absolute perspective and from a historical perspective,” he said.
In contrast, he pointed to European stocks as a better investment opportunity, noting that their traditional valuation discount relative to U.S. stocks has widened significantly.
“The difference between American stocks and European stocks has never been greater. Normally, European stocks have had a discount of 20%, now it is 40%. And that is too high,” he explained.
As speculation continues to fuel market movements, Gardell’s warnings serve as a reminder that investors should carefully assess valuations before making investment decisions.
