Billionaire Dan Loeb Sold Third Point's Entire Stake in Tesla in Favor of a High-Yield Dividend Stock That's Doubled in Under 2 Years

Latest 13F filings reveal Dan Loeb's Third Point fund fully exited its 500,000-share Tesla position in Q1 2025, citing concerns over declining vehicle margins, Cybertruck's performance, and Elon Musk's unfulfilled promises contributing to an inflated valuation. Concurrently, Third Point established a significant new stake of 3.775 million shares in AT&T, attracted by its post-lead-scandal recovery, consistent 5G and broadband subscriber growth, improved financial flexibility from debt reduction, and an appealing dividend yield with a reasonable forward P/E, signaling a strategic shift towards value.

Analysis

Based on Q1 2025 13F filings, Dan Loeb's Third Point fund has executed a significant strategic pivot, liquidating its entire 500,000-share position in Tesla (TSLA) while initiating a substantial 3,775,000-share stake in AT&T (T). The exit from Tesla appears driven by mounting fundamental concerns, including declining vehicle margins resulting from aggressive price cuts, and a perceived failure of the Cybertruck to meet initial demand expectations, as evidenced by a recall of approximately 46,100 vehicles versus earlier claims of over one million reservations. This skepticism is compounded by a history of unfulfilled promises from CEO Elon Musk regarding Level 5 autonomy and robotaxis, which casts doubt on the sustainability of Tesla's high forward P/E ratio of nearly 120. Conversely, the new investment in AT&T signals a turn towards value and stability. Third Point's entry follows AT&T's recovery from the July 2023 lead-cable issue and is supported by strong operational metrics, including 21 consecutive quarters of over 200,000 net broadband additions and historically low postpaid phone churn below 1%. The telecom's financial position has markedly improved following the WarnerMedia spinoff, with net debt reduced to $119.1 billion, supporting a dividend yield near 4% and a more conservative forward P/E of 12.7.

Key Decisions for Investors

• Investors holding Tesla should scrutinize the company's valuation in light of the operational headwinds cited by Third Point, such as margin compression and execution risks on new product promises.
• For income and value-focused portfolios, AT&T warrants consideration due to its improved balance sheet, stable subscriber growth in 5G and fiber, and an attractive valuation profile with a forward P/E of 12.7 and a nearly 4% dividend yield.
• This rotation by a prominent hedge fund from a high-multiple growth stock to a defensive, high-yield value name may indicate a broader market sentiment shift, suggesting investors should review their own portfolio's balance between growth and value sectors.