Druckenmiller Bought Tesla Puts Last Quarter as Stock Rose
Tesla rose 26 percent in the last three months of 2018 as the electric carmaker reported a third-quarter profit.
(Bloomberg) -- Tesla Inc. rose 26 percent 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 $99.8 million as of December 31. Tesla shares have sunk more than 8 percent this year.
Druckenmiller, a former money manager for George Soros, converted his hedge fund into a family office in 2010. He has a net worth of $5.1 billion, according to the Bloomberg Billionaires Index. A Druckenmiller spokesman declined to comment.
Money managers who oversee more than $100 million in the U.S. must file a Form 13F within 45 days of each quarter’s end to list their holdings of stocks, options and convertible bonds. The filings don’t show non-U.S. securities, holdings that aren’t publicly traded or cash. The positions may also have changed since the end of the reporting period.
Duquesne held $1.6 billion of U.S. equities at the end of the fourth quarter, a drop of about $476 million from the prior period, according to its latest filing. The family office exited 22 stock positions, including Citigroup Inc. Druckenmiller also reduced his bet on Google parent Alphabet Inc.
The money manager predicted markets will struggle over the next few years, after easy-money policies implemented in the wake of the financial crisis fueled debt and poor investments.
“The air can be let out of this balloon without causing another financial crisis,” Druckenmiller said in a Bloomberg TV interview 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 percent annually over the next five years.
To contact the reporter on this story: Simone Foxman in New York at sfoxman4@bloomberg.net
To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Steven Crabill, Peter Eichenbaum
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