Last year Arne Alsin’s hedge fund changed its name, turned a long-only fund into an exchange-traded fund, and thanks to Alsin’s unshakeable belief in Tesla, had its best performance since 2020.
Alsin’s quirky Worm Capital, which he launched in 2012, is now Nightview Capital. It gained 75 percent last year, according to an individual familiar with the fund.
A former value manager, Alsin more than a decade ago switched from being a classic Warren Buffet-style investor who scoured balance sheets to one who obsessively embraced the disruptive promises of the future.
Alsin took big, and early, stakes in both Amazon and Tesla — in 2012 and 2016, respectively. The bet paid off in 2020 when his long-short equity fund gained 274 percent, in large part due to the 700 percent surge in the price of Tesla’s stock, which comprised 37 percent of the hedge fund’s publicly traded equities portfolio at the time.
Since then, Alsin has stuck with Amazon and Tesla, a strategy that has had its ups and downs. During the 2022 technology bust, when both stocks tumbled, the fund suffered a “significant” loss, according to an individual familiar with the fund. But last year Tesla stock gained about 63 percent, making Tesla about 50 percent of the portfolio.
“I’ve been called crazy plenty of times, but nothing has tested — and reinforced — that reputation more than my conviction in Tesla,” Alsin wrote on Nightview’s blog in December. “For the past eight years, I’ve listened to the skeptics. Tesla was too risky, too expensive, too speculative. Friends and strangers alike would raise their eyebrows, muttering, ‘There he goes again…’”
Alsin argued that Tesla is “infrastructure for the 21st century.” He thinks that its autonomous driving, robotics, and AI are part of its “S-curve of innovation.”
The hedge fund, which uses options, is 120 percent long, including its short positions. The Nightview ETF, with the ticker NITE, launched in June and is long only. The ETF gained 18.66 percent for the year. The ETF’s predecessor long-only fund launched in March 2018 and is up 21 percent since then.
But while the exposures are different, the two vehicles are invested in the same stocks. For example, Tesla is the top holding in both but accounts for only 19 percent of the ETF.
Amazon is the second largest position, followed by financial firms Goldman Sachs, Charles Schwab, and Morgan Stanley. Nightview also owned gaming and lodging stocks Wynn Resorts, DraftKings, Hyatt Hotels, and MGM Resorts. The smallest position was in Qualcomm.
For years most hedge funds shunned Tesla, while Greenlight Capital’s David Einhorn and Kynikos’ Jim Chanos famously shorted it. But as Tesla defied the critics, a number of hedge funds finally jumped on board. According to their third quarter disclosures with the Securities and Exchange Commission, the biggest Tesla bull among the hedge funds is Coatue Management, which has been invested in the stock for several years. Other Tesla hedge fund investors, according to the SEC filings, include such funds as Caxton, Millennium, Third Point, Viking Global, and Rokos Capital.
