Earlier in 2019, a former hedge fund manager, Whitney Tilson said Tesla will be below $100 by the end of 2019. At the time, Tesla was trading at $295, but Whitney felt Musk has no more rabbits to pull out of his hat and therefore it was all downhill from there. Whitney also felt for the first time, the number of investors losing faith in Musk is starting to exceed the number of investors.
One of the more famous short sellers is Jim Chanos, who was also short Tesla, was concerned that Tesla’s valuation within a capital intensive business, making cars. Jim thought the Model S is a great car, but the competition was knocking on the door. In addition, he felt demand for the Model 3 in North America has peaked. And lastly, Jim felt Elon’s behavior is “promotional,” meaning he promises the world, but under delivers.
Steve Eisman, the investor famous for betting against subprime mortgages before the 2008 financial crash, said the recent run-up in Tesla Inc.’s stock is inexplicable and is instead bullish about General Motors Co. Steve’s investment firm owns GM, which he called “reality on the ground” relative to the “dream” Tesla bulls have.
Tesla continues to brush things off their shoulders and continues to move forward. Yesterday, Tesla reported their first quarter earnings and surprised Wall Street by making a profit. The company reported first quarter earnings of $1.24 per share on revenue of $5.99 billion. Analysts were expecting a loss of 28 cents per share on revenue of $6.1 billion. Total revenue increased 32% to $5.99 billion year-on-year, beating analysts’ estimates by $140 million.
David M. Einhorn, hedge fund manager and founder and president of Greenlight Capital, which focuses on shorting companies during the Great Recession shorted Lehman Brothers stock, believing the company claimed that they used dubious accounting practices in their financial filings.
Five months ago David Einhorn, questioned Tesla’s accounts receivables. In January, David had a negative view on Tesla and shorted the company thought put options. Yesterday, David went onto Twitter expressing his thoughts once again about Tesla.
“Can you or Zack explain?” Einhorn, 51, wrote in a tweet to addressed to Musk and referring to Tesla’s chief financial officer, Zachary Kirkhorn. Einhorn also asked how the company’s automotive margins “barely budged” despite production disruptions, the cost of ramping up the new Model Y and other factors.
But betting against Tesla has been less productive, with the shares having tripled in the past year. Musk has taunted Einhorn by claiming he’d send a box of short shorts and host a tour of the carmaker’s facilities. The CEO apparently hasn’t followed through on the idea.
In the famous words of DJ Khalid
All Tesla do is win win win no matter what
Got money on my mind I can never get enough
And every time I step up in the buildin'
Everybody hands go up
And they stay there
And they say yeah
And they stay there
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.