Sohn Conference

Hedge fund manager Palihapitiya calls Elon Musk 'our generation's Thomas Edison'

Palihapitiya: Tesla convertible bonds get you a 'costless 5-year call'

Chamath Palihapitiya, founder and CEO of Social Capital, was bullish Tesla on Monday, recommending convertible bonds from the electric car maker.

"The Tesla convertible bonds give us a way to stand shoulder to shoulder with a guy who we think is our generation's Thomas Edison," he said. Tesla could be "worth hundreds of billions in a decade." The specific convertible bonds he said he was buying had a 2022 maturity.

The idea from the former senior member of the investment team at Facebook was presented at the Sohn Investment Conference in New York.

"Early traction of Tesla is tracking very closely to Apple," Palihapitiya said. "They are expanding into adjacent markets."

The investor cited how the company is expanding to autonomous driving technology, electric trucks and energy as a service.

Palihapitiya predicts Tesla will be able reach 5 percent share of the global auto market over the long term. He said the company has a better business model compared to other auto makers because it has no employee unions and spends less on marketing.

Tesla shares turned positive shortly after the hedge fund manager mentioned the company on stage.

It may get a little awkward in the halls of the Sohn conference this year as David Einhorn, slated to speak after Palihapitiya later Monday, said last week that the valuation for Elon Musk's electric vehicle company is "reminiscent of the March 2000 dotcom bubble."

Palihapitiya pitched Amazon stock at the previous year's Sohn conference, which is up about 40 percent during the last 12-months.

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