Bireme Capital is short selling Tesla and Apple. Here's why.

Tesla (TSLA) and Apple (AAPL) have had eventful weeks: the EV company passed a shareholder vote in favor of CEO Elon Musk's pay package, and the tech giant announced new AI initiatives at its Worldwide Developers Conference. Despite the positive news, Bireme Capital founder and chief investment officer Evan Tindell is short-selling both stocks and joins Catalysts to share his reasoning.

"It's been a very difficult period for shorting any stocks... but for us it kind of rhymes with the 2021 period where, of course you had the SPAC craze," Tindell explains. He continues, "the growing valuations, or overvaluations in our view, of some of these stocks in 2021 contributed to huge underperformance of the Nasdaq and other sort of growth names in 2022, which allowed us to outperform by around 50%."

When it comes to Apple, Tindell is skeptical that its AI replacement cycle can drive $300 billion of value. He notes that if AI drives more searches to Siri over Safari, it could end up endangering Google (GOOG, GOOGL).

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Melanie Riehl

Video Transcript

Evan, I wanna switch gears a little bit because Tesla and Apple have both had very big weeks here.

You are shorting both of those talks and you're also shorting A MD.

I feel like we always talk to you about your contrarian calls and I'm curious about how you're finding success amongst these contrarian calls and how you're able to kind of withstand the upside that you're seeing in these names and maintain that call.

Yeah, it's, it's a, it's been a very difficult period for, for shorting any stocks.

Um You know, we think it's, it's been difficult for us this year so far.

We're, we're down a bit on the year.

Um But, you know, for us, it, it kind of rhymes with the 2021 period where, you know, of course, you had the, the sack craze and we also outperform or underperformed significantly during that period.

But um we all kind of know what happened there, right?

I mean, the the the growing uh evaluations or overvaluations in our view of some of the stock uh in 2021 contributed to uh you know, huge underperformance uh of the Nava and, and other um you know, sort of growth names in 2022 which allowed us to outperform by around 50%.

Um So, uh you know, we're, we're sort of skeptical that uh the A I replacement cycle at Apple can really drive $300 billion of, of value.

Um And the other thing we're skeptical of is, um, you know, any time, you know, as, as Apple A I moves drive uh potentially more which is to Siri rather than safari, we think it, we think it might endanger the, the Google uh $20 billion annuity that Google pays to be the default search engine on, on safari.

So, uh we, we feel like that's kind of underappreciated by uh by Apple investors right now.