Monday , June 17 2019
Home / Mish's Global Economic / Einhorn Says Tesla Once Again “On Brink of Failure”

Einhorn Says Tesla Once Again “On Brink of Failure”

Summary:
“We believe that right here, right now, the company appears to again be on the brink.” MarketWatch reports Tesla again ‘on the brink’ of failure, says Einhorn's Greenlight hedge fund. Tesla Inc.’s “wheels are falling off,” sometimes literally, and the Silicon Valley car maker appears to “again be on the brink” of failure, David Einhorn’s Greenlight Capital told investors Friday. Hedge-fund titan Einhorn is a frequent Tesla critic who has called Chief Executive Elon Musk “erratic and desperate” and last year compared Tesla’s path to the path of doomed investment bank Lehman Brothers. While Musk may promise Model 3 worldwide demand of around 500,000 to 700,000, “the reality is quite different,” as demand from the fan base has already been satisfied, Greenlight said. “If Q1 is any

Topics:
Mike Shedlock considers the following as important:

This could be interesting, too:

Mike Shedlock writes Ho Ho Ho It’s magic: Deutsche Bank, Market Cap B to Spin Off B in assets

Mike Shedlock writes Why Brexit Must Be Delivered (And Johnson Will Do It)

Mike Shedlock writes Two Million Protesters Flood Streets of Hong Kong: What’s It All About?

Mike Shedlock writes Whole Lotta Nothin’: Trump’s Secret Trade Deal With Mexico

“We believe that right here, right now, the company appears to again be on the brink.”

MarketWatch reports Tesla again ‘on the brink’ of failure, says Einhorn's Greenlight hedge fund.

Tesla Inc.’s “wheels are falling off,” sometimes literally, and the Silicon Valley car maker appears to “again be on the brink” of failure, David Einhorn’s Greenlight Capital told investors Friday.

Hedge-fund titan Einhorn is a frequent Tesla critic who has called Chief Executive Elon Musk “erratic and desperate” and last year compared Tesla’s path to the path of doomed investment bank Lehman Brothers.

While Musk may promise Model 3 worldwide demand of around 500,000 to 700,000, “the reality is quite different,” as demand from the fan base has already been satisfied, Greenlight said.

“If Q1 is any indication, total annual global demand for the Model 3 is 200,000 vehicles,” it said. “We believe that (Tesla’s) poor reputation for quality and service and diminishing tax incentives are limiting broader demand.”

“We believe that right here, right now, the company appears to again be on the brink,” Greenlight said.

“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,” it said.

Tesla Won't Survive

I side with Einhorn on one point: Tesla will not survive. The company has too much debt and its product is poor.

Timing is another matter. Story stocks survive much longer than anyone thinks, then collapse all of a sudden.

When? I don't know.

Mike "Mish" Shedlock

Mike Shedlock
Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Leave a Reply

Your email address will not be published. Required fields are marked *