Einhorn’s funding agency, Greenlight Capital, has been shorting Tesla inventory for a few years. Accordingly, he has a vested curiosity in seeing TSLA shares crater.
Einhorn: Elon Musk Is ‘Erratic and Desperate’
Einhorn — who trashed Elon Musk as “erratic and desperate” in September 2018 — says it’s apparent to him that Tesla is “on the brink of failure.” He made the remarks in a blistering six-page investor letter.
“If Q1 is any indication, whole annual international demand for the Model Three is 200,000 automobiles.
“(Tesla’s) poor fame for high quality and repair and diminishing tax incentives are limiting broader demand.”
“We believe that right here, right now, the company appears to again be on the brink.”
Einhorn: Demand for Tesla Cars Is Drying Up
David Einhorn gleefully claimed there are quite a few indicators that Tesla is imploding, and he dismissed the corporate as an over-hyped impostor.
“The signs are everywhere — from the lack of demand, desperate price cutting, layoffs, closing-and-then-not-closing stores, closing service centers, cutting capex, rushed product announcements, and a new effort to distract investors from the demand problem with hyperbole over (Tesla’s) autonomous driving capabilities.”
Einhorn concluded his snarky letter by quoting lyrics from a Muppets music carried out by Kermit the Frog: “Rainbows are visions, but only illusions. And rainbows have nothing to hide.”
Einhorn Lost Millions in 2018 by Shorting Tesla Stock
David Einhorn — whose internet price tops $1.5 billion — is a hedge fund titan who’s probably the most closely-watched traders on Wall Street.
Despite a formidable monitor file, Greenlight Capital misplaced 34% final yr — making 2018 the worst yr the hedge fund has had since Einhorn launched it in 1996. Part of the explanation why Einhorn carried out so dismally was as a result of he shorted Tesla.
Greenlight Capital misplaced 18.3% within the first six months of 2018, Einhorn revealed in a July 2018 investor letter. Tesla shares — which spiked 29% throughout that point — was the fund’s “second-biggest loser” for that time-frame.
Tesla had an erratic 2018, but it surely was nonetheless the best-performing auto inventory for that yr. That spelled unhealthy information for short-sellers who wager towards it.
Elon Musk Has Not Clapped Back at Einhorn
Interestingly, Elon Musk has not reacted to David Einhorn’s savage take-down, regardless that he typically slaps down rivals on Twitter.
As CCN reported final week, Musk hilariously trolled fellow billionaire Jeff Bezos by calling him a copycat after the Amazon CEO introduced plans to launch a constellation of satellites into house.
Musk tweeted: “Jeff Bezos copy 🐈.” It was a snide reference to the truth that Musk’s SpaceX had already completed that in 2018 and was lightyears forward of Bezos with regards to something space-related.
Elon Musk Epically Trolls Jeff Bezos After Amazon Poaches SpaceX Scheme https://t.co/gJ2PIqhzF0
— CCN.com (@CCNMarkets) April 10, 2019
Tesla Chairwoman Backs Elon Musk
While Musk has been distracted by his ongoing feud with the Securities and Exchange Commission over his Twitter utilization, he nonetheless has the arrogance of Tesla’s 11-member board of administrators.
Tesla’s chairwoman, Robyn Denholm, publicly expressed her assist for Musk final month. She says the South African billionaire makes use of his Twitter account “wisely” and is being wrongly accused of recklessness by the SEC.
Similarly, Tesla shareholder Cathie Wood — the CEO of ARK Invest — says she’s assured that Tesla stock will rocket 1,200% over the following 5 years and can ultimately high $4,000 a share.
Tesla Will Be the Next Amazon – Unless it Gets Acquired by Apple First https://t.co/Kd18T3XkGp
— CCN.com (@CCNMarkets) February 20, 2019