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esla is just months from a total collapse, says hedge-fund manager
Published: Mar 27, 2018 12:46 p.m. ET
‘I’ve never seen anything so absurd in my career’
Is Tesla a good short candidate at these levels? One hedge-fund manager sure thinks so.
By
ShawnLanglois
Social-media editor
Unless Elon Musk “pulls a rabbit out of his hat,” Tesla will be bankrupt within four months, says John Thompson of Vilas Capital Management.
“Companies eventually have to make a profit, and I don’t ever see that happening here,” he told MarketWatch. “This is one of the worst income statements I’ve ever seen and between the story and the financials, the financials will win out in this case.”
Thompson manages $25 million and his Tesla TSLA, -7.67% short is the fund’s biggest position. To be fair, he’s been betting big against Tesla for years, which, of course, means he’s endured some brutal stretches.
Last April, for instance, the stock hit a record high around the $300 mark, and Musk was right there to troll the Tesla bears:
From that point, the stock continued to break new ground, eventually topping out at $389.61. But despite Tesla’s strong performance in 2017, Thompson’s fund still managed to churn out a 65% gain for the year.
Now, Tesla’s back to where it was when Musk fired off his “Shortville” tweet, and Thompson is confident his bet is about to pay off nicely.
In fact, Thompson says if his prediction comes true, his fund could surge by another 50%. With that in mind, he says he’s investing $500,000 of his own money.
“Tesla, without any doubt, is on the verge of bankruptcy,” he told clients in an email over the weekend. He explained that funding will be hard to come by in the face of problems in delivering the Model 3, declining demand for the Model S and X, extreme valuation and a likely downgrade of its credit rating by Moody’s from B- to CCC.
“As a reality check, Tesla is worth twice as much as Ford [estimate of the enterprise value of both companies], yet Ford F, +0.28% made 6 million cars last year at a $7.6 billion profit while Tesla made 100,000 cars at a $2 billion loss,” Thompson said. “Further, Ford has $12 billion in cash held for ‘a rainy day’ while Tesla will likely run out of money in the next 3 months. I’ve never seen anything so absurd in my career.”
Tesla declined to comment on Thompson’s views.
At last check, Tesla shares were down almost 5% at $290, while the Dow Jones Industrial Average DJIA, -0.04% was up triple digits.
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https://www.investors.com/news/tech...et-to-new-highs-then-collapse-morgan-stanley/
Tesla Could Rocket To New Highs, Then Collapse: Morgan Stanley
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- BRIAN DEAGON
- 11/21/2017
Expect Tesla (TSLA) shares to be extremely volatile in 2018, as shares could hit a record high of 400 before facing headwinds and collapsing, a Morgan Stanley analyst said Tuesday.
In a note to clients, analyst Adam Jonas maintained an equal weight rating on Tesla with a price target of 379. But it came with a warning.
"From a shorter-term trading perspective, we anticipate Tesla's stock price may reach highs in the range of $400 or more over the next few months before facing some more serious headwinds later in the year that could take the stock significantly below current levels," Jonas wrote.
Tesla shares gained 2.9% to close at 317.81 on the stock market today. Tesla's record high of 386.99 was set on June 23.
Jonas estimates Tesla shares could rise to 400 as it resolves battery production issues and alleviates other bottlenecks that have slowed production of the Model 3. But shares could fall to 200 due to mounting concerns that Tesla might lose its competitive position, he wrote.
Tesla shares rose Friday following the splashy debut Thursday evening of a futuristic big-rig truck and a new sports car, at a time when the company is burning cash and hasn't met delivery schedules for its new Model 3.
Equity analysts who follow Tesla seemed impressed by the splashy product announcements overall but also expressed concerns about production on the Model 3 and the way Tesla used the event as a cash-raising opportunity.
IBD'S TAKE: Despite skeptics and safety questions, the era of electric cars and trucks and self-driving vehicles is clearly underway. Automakers and tech companies are plowing billions of dollars into research and forging alliances in a rush for the inside lane on the automobile's most revolutionary track since the Model T.
Taking a more optimistic view on Tesla was Nomura analyst Romit Shah who, on Monday, reiterated a buy rating on Tesla and price target of 500.
"Ultimately, we believe Thursday's event will only further strengthen Tesla's brand and luxury appeal," Shah wrote in a research note to clients. "And while the business model and operations still need figuring out, we believe that Tesla has expanded its addressable opportunity by tens of billions of dollars, thus, paving the way for exponential revenue growth potential for at least the next five years," Shah wrote.
Tesla reported third-quarter results on Nov. 1 that missed earnings expectations by a wide margin and revealed that production
https://www.rt.com/business/422559-tesla-total-collapse-coming/
Tesla just months from total collapse, says hedge fund manager
Published time: 28 Mar, 2018 11:28
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A robotic arm changes the tire of a Tesla car at the world's biggest industrial fair, "Hannover Fair", in Germany © Fabian Bimmer / Reuters
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Is Tesla in crisis? “Companies eventually have to make a profit, and I don’t ever see that happening here,” the head of Vilas Capital Management told Market Watch.
“This is one of the worst income statements I’ve ever seen and between the story and the financials; the financials will win out in this case.”
Thompson manages $25 million and his Tesla short is the fund’s biggest position. He has been betting big against the electric automaker for years.
Last April, Tesla stock hit a record high of around $300 and continued to grow to $389.61. Nevertheless, Thompson’s fund still managed to churn out a 65-percent gain for the year.
Since then, Tesla has fallen sharply and Thompson is confident his bet is about to pay off. Tesla shares were down more than 8 percent at Wednesday closing to $279.18.
The hedge fund manager said that if his prediction comes true, his fund could surge by another 50 percent. He noted that he is investing $500,000 of his own money.
“Tesla, without any doubt, is on the verge of bankruptcy,” Thompson told clients in an email. He explained that funding will be hard to come by in the face of problems in delivering the Model 3, declining demand for the Model S and X, extreme valuation, and a likely downgrade of its credit rating by Moody’s from B- to CCC.
“As a reality check, Tesla is worth twice as much as Ford [estimate of the enterprise value of both companies], yet Ford made six million cars last year at a $7.6 billion profit, while Tesla made 100,000 cars at a $2 billion loss,” Thompson said. “Further, Ford has $12 billion in cash held for a ‘rainy day,’ while Tesla will likely run out of money in the next three months. I’ve never seen anything so absurd in my career.”
