Investor Steve Eisman describes Tesla shareholders as a cult
Steve Eisman, the investor portrayed in The Big Short, has labeled Tesla and its shareholders a cult due to the stock's detachment from fundamentals. Speaking on the Lemondae Stand podcast, he highlighted Tesla's declining earnings amid a rising stock price. Eisman avoids investing in Tesla despite owning other major tech stocks.
Steve Eisman gained fame for shorting the housing market before the 2008 financial crisis, as detailed in Michael Lewis's 2010 book The Big Short and its film adaptation, where Steve Carell played a character based on him named Mark Baum. Today, Eisman remains cautiously optimistic about the broader market, expressing concerns over debt levels and AI deals but owning shares in all seven 'Magnificent 7' stocks except Tesla (TSLA).
On the Lemondae Stand podcast, Eisman discussed Tesla's financial performance. He noted that the company's earnings peaked in 2023 at $4.30 per share, declining over 50% to $2 per share in 2024. For 2025, earnings stand at $0.67 per share so far, with Eisman estimating a full-year figure of $1.50—representing a roughly 60% drop from the peak. Despite this, Tesla's stock trades about 50% higher than during its 2023 peak earnings period.
Eisman illustrated the challenge of shorting Tesla: 'Imagine you are an analyst at a hedge fund in 2022 and you go to your PM: "I got this great thesis. There’s this company, it’s called Tesla... Their 2025 earnings are going to be down 60% from their highs of 2022... Let’s short the piss out of it."' He explained that such a fundamentally sound bet would still result in losses due to the stock's resilience.
The investor attributed this to cult-like behavior among shareholders. 'It’s a cult,' Eisman said. 'I think what people sincerely believe... is that Tesla is gonna do very well with robotaxis, AI, and robots, and it’s all going to be great and that’s why you own Tesla.' He referenced bullish analyst Dan Ives from his own show, The Real Eisman Playbook, noting that arguments against future-oriented bets are futile: 'Number one, he could be right. Secondly, there’s no argument against it. You’re arguing against something that’ll happen in the future, and people believe it or not.'
Eisman concluded that relying solely on company fundamentals is no longer viable for investments, as valuations have decoupled from them. He chooses to steer clear of Tesla.