David Einhorn on Tesla
Activist investor David Einhorn has been betting against Tesla (TSLA). He is shorting the stock and including it on his “bubble basket” list.
He said, “some of TSLA’s presumed market lead in areas like autonomous driving may more likely reflect TSLA’s willingness to put inadequately tested and dangerous products on the road rather than a true technological advantage.”
Tesla is playing a significant role in the automated electric car space. It also has a strong base in energy generation and energy storage products. However, Einhorn criticized the company and its technology. Product recalls, production delays, and product defects are hurting investors’ sentiment on TSLA.
He also said, “Tesla had an awful quarter both in its current results and future prospects. In response, its shares fell almost 6%, we believe it deserved much worse.”
On a YTD (year-to-date) basis, Tesla has provided a strong return of nearly 33.6% as of November 3, 2017. The broader market S&P 500 Index (SPY) (IVV) (QQQ) returned nearly 15.5% during the same period. Tesla is presently trading at $306.09. Its 52-week high is at $389.61 and 52-week low is at $178.19.
However, the company reported negative earnings growth in the last three years. The 3Q17 earnings figure also remained in negative territory.
In the next part of this series, we’ll analyze David Einhorn’s view on Amazon (AMZN).