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QOTD: Fund Manager On Tesla "The Wheels Are Falling Off"

7K views 74 replies 36 participants last post by  eaton53 
#1 ·
Business Week
April 12, 2019



Hedge fund investor David Einhorn took a victory lap after a long held Tesla Inc. short position boosted returns for Greenlight Capital in the first quarter.

“The wheels are falling off,” Einhorn wrote in a letter to investors Friday. He criticized Tesla for touting its cars as the safest available while marketing its driver-assistance system Autopilot in ways that confuse consumers about its capabilities. And Einhorn said Chief Executive Officer Elon Musk has overstated how much demand there is for Model 3 sedan.

Einhorn, 50, has been public about being short Tesla going back at least three years. Greenlight’s bet against the company contributed to 2018 being its worst year on record. Tesla shares rose 6.9 percent last year and surged 46 percent in 2017.

Tesla fell 16 percent in the first quarter of this year. Einhorn referred to comments Musk, 47, made to Axios in November that the company came within weeks of running out of money when it was struggling to ramp up production of the Model 3. He said the electric-car maker may be back in a similar position.

“Musk never admits the crisis in real time,” Einhorn said. “We believe that right here, right now, the company appears to again be on the brink.”

A Tesla spokesman didn’t immediately respond to a request for comment.







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#2 ·
“Musk never admits the crisis in real time,” Einhorn said. “We believe that right here, right now, the company appears to again be on the brink.”
Fast forward a few days/months/quarters/years from now and people will be blaming hedge fund managers for the demise of Tesla...but I think there is only one person responsible...and oddly, there has not been a lot of communication from him lately, government stipulations or not.

The recent, almost weekly price and equipment changes have to now be taken as an almost certain sign of desperation.

Bottom line, something is not right at Tesla. Buyer beware...if you are interested, you might want to go with the newly available leasing option and protect yourself.












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#5 ·
The recent, almost weekly price and equipment changes have to now be taken as an almost certain sign of desperation.
I agree. GM's various avenues of discount pricing (employee, supplier, GM card, cash back, loyalty lease, competitive discount, etc.) make for a maze of pricing guidance. They must be very desperate for business, I mean, how many more discounts can you provide...
 
#29 ·
Shortselling hedge fund managers have been predicting Tesla’s demise forever. I think they will be predicting the same demise 25 years from now.
 
#8 ·
At this point the brand is entrenched into pop culture. Another major company would bail them out.
 
#9 ·
They may go bankrupt, but they will be snatched up regardless.

I hope they succeed, but they also annoy me.....
 
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#17 ·
Have been seeing some real horror stories and pics from Tesla investors twitter pages. They'd better work out a deal with a major manufacturer soon.
 
#20 ·
Elon should hire someone to oversee Tesla, and concentrate on his main strength, Rocket Man. He's done amazing things in that department.

NASA is a relative relic, they would be incapable of doing what they did in the 1960s as a startup today. They're bureaucratized to death as happens with all bureaucracies and agencies, always, everywhere. It is the natural order of things.
 
#21 ·
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#26 ·
I'm not an expert on all things Elon Musk, but there is a lot I like about him....thinks outside conventional wisdom, takes chances, thinks 'futuristically'.

However, as a CEO/Businessperson, he creates a lot of self inflicted injuries and puts up a lot of roadblocks in his own way. I admire his ideas, but wouldn't want him anywhere near the leadership of my company....except maybe as the point man to pitch ideas to get initial investment dollars. Day-to-day operations though....he takes small problems that may have solutions available...and instead of exploring those solutions he makes them bigger problems.
 
#34 ·
The reality is Tesla is a tech company not a Automaker or production company.

Tesla had it easy when they only has the $130,000 S model that easily could turn a good profit. They hit on a segment the other ps did not think existed. The Tesla became an image car.

They X model came and was expected to continue this but failed. Sales never too off and the model had quality issues that could have been avoided.

The money from the X never arrived to fund the 3 model. They had to presell the car several years ahead to fund it. Then they counted on large sales volumes to make money. Sales are not hardly half of what they needed. China failed to grow. The 3 also was not an image symbol. It was just s expensive small car with quality issues.

Tesla needs to step back and become a supplier os EV systems to automakers in need of this technology that they can not afford to develop themselves. Work like Intel. Don’t build the computer just the stuff that goes into it.

Not everyone is like GM or VW and can afford to make these systems in house so there is a large market for them. No need to deal with car production and government regulations.

With Porsche coming with their Taycan, Jag and Audi already out with their SUV models Time is running out for Tesla to get their house in order.

The Tesla fans can blame the hedge fund people all they like but Tesla has moved on from the easy single profitable model to fine the difficulty moves to the 5th power with each and every new model.

Let’s face it if this was easy more people would be building cars.

The Tesla as we know it will have to change what they do or merge to survive.
 
#35 ·
Tesla has had its challenges with misinformation, and with the rampant greed of those who dream of and do short Tesla stock.
 
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#39 · (Edited)
^Be that as may be, rarely in the auto world a "baby" company polarized the industry the way they did.
I would not buy one personally, but I do think they are cool, different, and most important, innovating in a world of stagnant tech.
And you know what, so far they have delivered. With all the doomsday scenarios and the fund managers crapping all over the news about them, they have so many models in the lineup and more coming.
Not to mention they made all those patents available for the world to use.
 
#40 ·
And you know what, so far they have delivered. With all the doomsday scenarios and the fund managers crapping all over the news about them, they have so many models in the lineup and more coming.
The media is so easy to con. Hedge fund managers make a big bet on how so and so company is going to fail or succeed, and then the media prints their “analyses” as though it’s gospel and not self-interested drivel meant to manipulate the markets in favor of their own bets.

The good news for Tesla is that, inevitably, the doomsayers are proved wrong time and time again. I don’t understand the hostility against Tesla.

The pettiness of the anti-Tesla crowd is world class levels of immaturity and petty.

Have you heard of Iceing? It’s when clowns in pick-up trucks block charging stations to try to prevent Tesla owners from fueling their cars.

Yes, these people are so angry that people buy cars they don’t like that they try to stop people from fueling their cars! Are you serious? Are these people old enough to drive, because that nonsense is full-on toddler. Grow-the-f#ck-up already!
 
#43 ·
Funny how people hate they hate Tesla because of Elon. Yet this hated man has legacy automakers wanting to imitate him, you know the "Tesla Killers", right Cadillac?

People here act like Bill Gates, Steve Jobs, Bezos etc are or were humble. Hypocrites, The Techies may be Game of Throne nerds but they will shank you in the back if it gets them ahead. Elon undoing is his mission statement to "save the world" and move it to EVs.
 
#45 ·
And by the way, independent analysts at Munro and Associates have plenty of criticisms of the Model 3, particularly in regard to fit and finish issues, but also are very impressed with its profitability. The Model 3 has a 30% per unit profit.

With the full report done, Munro & Associates says Tesla is earning more than 30 percent profit on each Model 3 sold. That’s considered a very high profit margin for a conventional gasoline-powered car, but no one else is anywhere close with electric vehicles. And yes, you have to cut some corners with the fit and finish to get there. Still, Munro says his opinion of the Tesla Model 3 has changed. The impressive systems integration makes this a sustainable vehicle for Tesla.

This analysis is based on the upgraded Model 3 with the long-range battery and enhanced autopilot, which costs around $55,000. Munro is hesitant to speak to the profitability of the $35,000 base model, but it should have most of the same efficient electronics. It might not be 30 percent profit, but Tesla is probably still making plenty on each unit.
https://www.extremetech.com/extreme/273804-model-3-has-highest-profit-margin-of-any-electric-vehicle
 
#46 · (Edited)
And by the way, independent analysts at Munro and Associates have plenty of criticisms of the Model 3, particularly in regard to fit and finish issues, but also are very impressed with its profitability. The Model 3 has a 30% per unit profit.
If they had so much profit, they wouldn't have all of these losses.

People here act like Bill Gates, Steve Jobs, Bezos etc are or were humble. Hypocrites
Whatever.
These guys aren't liars and con men.
Zuckerberg is another story. He's a POS.
 
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#51 ·
Charge at home, drive the other car on trips.
If you don't have another car or a place to charge, then hybrid.
 
#58 ·
Tesla has something automakers would absolutely kill for, and that is millions of miles of battery data. Their battery degradation is industry best, and currently no one has matched their efficiency per kw/h. In fact Audi with its E-Tron lineup isn't even close.
 
#59 ·
Whatever. I don’t care about guys that are betting for or against the company. I only care about the product.

And, after having driven a Model 3, I turned the keys to my XT5 in on Monday. Pick up my Model 3 on Friday.

The risk factor for me, if the entire thing goes belly up? Not much, really. It’s still an incredible car, fun to drive, lots of advanced technology. Not perfect, but neither is any other car. Parts and spares and things don’t worry me. If we can get spares for DeLoreans, I don’t think Tesla spares will be a problem.

I’ve seen the future and it’s electric. No doubt in my mind.
 
#63 · (Edited)
If we can get spares for DeLoreans
The only reason you can get spares for a Delorean is because they made 3X as many parts as cars. Lots of leftover stock was available.
If they hadn't done that, the owners would've been screwed for quite some time.
Tesla is just the opposite. They barely make enough parts to build new ones. If they go down, you will be down.

It took over a year for Saab Parts to take over the parts supply for those cars... longer if you broke the wrong thing.
Those cars used a lot of GM parts and Saab Parts was already in that business. Every part of a Tesla is bespoke.

I've owned two different severely orphaned cars.
There is always a transition period between them going away and the next guy picking it up where parts are difficult or impossible to get.
Most people cut and run during this period.

Actually, here is exactly how it will go:
https://insideevs.com/timeline-for-availability-of-parts-for-fisker-karma-owners-still-unknown/
Over a year after Fisker went down owners still couldn't get parts.
There was a new owner, but every part has to be set up and supplier pricing negotiated. This takes awhile.
 
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