Tesla Inc (NASDAQ: TSLA) has more than it’s fair share of critics, with many of the more well-heard criticisms about the company relating to the business’s profitability or even the “cultish” support of some of the company’s fans. However, a well-known hedge fund manager on Wall Street is who has voiced concerns about the company in the past is saying 2019 will be the year Tesla tumbles, predicting shares will drop down to below $100.
Former hedge fund manager Whitney Tilson first went against the automaker in 2014, a call that hasn’t been particularly profitable for him. However, he went on to announce that today he felt Elon Musk had “no more rabbits to pull out of his hat” and that the company would go downhill from this point.
As for Tesla’s stock, however, I’ve been following it closely for years and, after carefully reviewing everything over the weekend (including the transcript of Musk’s blatantly-Reg-FD-violating call last week), today I’m making one of my rare big calls: we will look back on last Friday as the beginning of the end for Tesla’s stock,” said Tilson according to Valuewalk. “I don’t make calls like this very often. The last two were bitcoin the hour it peaked at $20,000 on December 16, 2017 and Tilray (TLRY) the hour it peaked at $300 last September 19. I only make big calls when three things line up perfectly to create what I call an “inflection point”: the fundamentals, my “scuttlebutt” research, and my read of investor sentiment.”
Tilson went on to criticize Tesla’s fundamentals as many critics do. According to his research and info provided by a number of “amateur analysts” as he calls them, demand for Tesla cars is weak and inventories are beginning to pile up. He goes on to mention that if Tesla had any cards to play, they would have mentioned it on Thursday afternoon asides from the Model S announcement.
At the same time, he goes on to add that the overall unofficial consensus is that quarter sales around 79,000-81,000 cars sold, a worryingly low figure. The former hedge fund manager also goes on to bring up how Tesla is firing more staff, something that Elon Musk has promised multiple times wouldn’t happen anymore.
Opinions on Tesla have been divisive, as usual. Announcements regarding the company’s price-reduced $35,000 Model S and the new Model Y have caught the media’s attention as of late, but haven’t been enough to assuage critics. At the same time, however, well-known short-sellers such as Citron Research have reversed their opinion on Tesla, which has only further divided the investment community.
Time will tell whether or not this will prove to be the case. However, skeptics have been heralding the demise of Tesla for a while now, something which still hasn’t happened yet.
Tesla Company Profile
Tesla, Inc. designs, develops, manufactures, and sells electric vehicles, and energy generation and storage systems in the United States, China, Norway, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers sedans and sport utility vehicles.
It also provides electric vehicle powertrain components and systems to other manufacturers; and services for electric vehicles through its company-owned service centers, Service Plus locations, and Tesla mobile technicians. This segment sells its products through a network of company-owned stores and galleries. – Bloomberg