Impressive Gains from Asian Hedge Funds as Tesla’s Stock Surge

Starting in the Q3 2019, Tesla shares (TSLA) began to grow rapidly. This was the reason that many critics began to change their negative opinion, and various hedge funds to buy shares of the company.

Tesla shares growth this year has been a major factor of the profitability of several hedge funds based in Asia. Some of these funds have held shares in the EV maker for many years, while others only bought last year.

According to Bloomberg, Hong Kong hedge funds Optimus Prime Asset Management and CloudAlpha Capital Management, as well as Singapore-based Golden Horse Fund Management Pte. bet on the purchase and/or ownership of Tesla shares, which paid off in January when Tesla shares brought them the most profit.

Optimus Prime returned 14.5% in January, mainly thanks to its Tesla assets. The fund has been loyal to the automaker for several years. It held Tesla shares even when they were under heavy pressure in 2018 and early 2019, and when analysts questioned the company's survival due to a constant lack of profit.

At the end of Q2 2019, the hedge fund reported that it had acquired TSLA shares. Purchase prices ranged from $178.97 to $291.81, with an average price of $233.41. The impact on the portfolio due to this purchase was 6.66%.

According to form F13, Optimus Prime owns 278,800 shares of Tesla, which means that TSLA make up about 33% of the fund's portfolio.

For CloudAlpha Capital Management, Tesla shares brought 5.5% of the profits to their global technology hedge fund last month, according to a CloudAlpha customer newsletter.

It increased Tesla's stock last year when they hit a low, and again when Tesla lowered the price of its made in China Model 3 to 300,000 yuan.

Singapore's Golden Horse Fund Management also benefited from the Tesla rally, as its as its Global Macro Discretionary Fund returned 2.2 percent in January, half of which was thanks to Tesla, although Tesla's stock accounted for only 3 percent of the fund.

“Elon Musk has proven himself to be a great salesman with his ability to capture the hearts and imagination of investors through his showmanship,” Golden Horse Managing Director Ko Ming Nan said.

In late January, Tesla easily exceeded market expectations and posted Q4 earnings for the second quarter in a row. Tesla shares continued to rise in February, reaching a record closing price of $917 on February 21.

One of the biggest losers in the Tesla stock price rally was the Saudi Arabia’s Public Investment Fund, which sold almost all of its Tesla shares at the end of 2019, losing out on potential stocks worth billions of dollars due to a jump in price this year. At the end of the third quarter of 2019, the Saudi fund owned more than 8,277,080 shares of Tesla, while at the end of 2019 its share in Tesla was only 39,151 shares, according to the fund in the SEC.