Tesla’s (NASDAQ:TSLA) Despondent CEO, Elon Musk, Knows the “Deception is Up”
Friday, hedge fund manager David Einhorn hammered Tesla Inc ($TSLA) and its “despondent” CEO Elon Musk, comparing the niche EV company to Lehman Brothers Holdings Inc, where he had flagged accounting problems several months before its Y 2008 collapse.
“Like Lehman, we think the deception is about to catch up to TSLA,” Mr. Einhorn’s firm Greenlight Capital, which has sold Tesla shares Short, said in a Quarterly investor letter. “Elon Musk’s erratic behavior suggests that he sees it the same way.”
Greenlight’s letter came a day after Mr. Musk, a longtime critic of Short-sellers, mocked and taunted the US Securities and Exchange Commission (SEC) by calling it the “Shortseller Enrichment Commission” on Twitter.
Greenlight said its Tesla Short position was its 2nd biggest winner in Q-3.
Mr. Einhorn said Tesla has “many parallels” to Lehman’s bankruptcy, which he said “threatened short sellers, refused to raise capital, bought back stock in the market, and publicly suggested it would go private.”
“Months later, shareholders, creditors, employees and the global economy paid a big price when C-Suite management’s reckless behavior led to bankruptcy,”Mr. Einhorn said.
That came just 5 days after Mr. Musk settled SEC fraud charges, in an accord that lets him remain Tesla’s CEO, but requires he step aside as the company Chairman and pay a $20-M fine.
A judge has yet to approve the settlement.
Tesla did not immediately respond to requests for comment.
Its shares were down over 7% at 261.95 at the close in NY Friday.
Note: there is no support for Tesla’s shares under $260.10 as of Friday’s close.
Many of of see a big problem for Mr. Musk is that Tesla would lose too much money targeting a mass audience by selling its M-3 at a $35,000 starting price, and yet “cannot bring himself” to cancel the program and refund hundreds of thousands $1000 customer deposits.
What Shayne and I see is this: Elon Musk is doing his level best to be relieved of his position as CEO to avoid accountability for the company’s coming collapse.
|NASDAQ:TSLA||261.95||5 October 2018||-19.88||274.65||274.88||260||17,944,500|
|HeffX-LTN Analysis for TSLA:||Overall||Short||Intermediate||Long|
|Bearish (-0.33)||Neutral (-0.07)||Bearish (-0.40)||Very Bearish (-0.51)|