The world’s best known short seller says Tesla traders are feeding on testosterone

Carson Block gets pumped when a corporate fraud implodes.Block is one of the best-known activist short sellers and the founder of Muddy Waters. The hedge fund publishes reports on companies that it says has misled investors, while making a bet on the stock price falling. Block made a name for himself targeting frauds in China…

The world’s best known short seller says Tesla traders are feeding on testosterone

Carson Block gets pumped when a corporate fraud implodes.

Block is one of the best-known activist short sellers and the founder of Muddy Waters. The hedge fund publishes reports on companies that it says has misled investors, while making a bet on the stock price falling. Block made a name for himself targeting frauds in China and has more recently gone after companies in the UK.

You would think a pandemic-induced recession would create a target rich environment for short sellers, but it hasn’t. Instead, investors are binging on risk: Armchair traders have been piling into options—a derivatives market that many newbies have little understanding of. In May, Tesla CEO Elon Musk said shares of his electric car company had risen too high; the stock price has doubled since then. Mega tech companies have carried the S&P 500 Index of stocks back to levels before the Covid meltdown. A frenzy among special purpose acquisition companies (SPACs), a maneuver for bringing private companies to the public market, is gaining momentum.

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