Investor's Corner
Tesla’s Elon Musk pens open invite to TSLA short with surprise gift offering
Following a note to his investors alleging that Elon Musk continues to commit fraud, prominent TSLA short and hedge fund manager David Einhorn has received a response from the Tesla CEO. Musk’s letter, which he shared on Twitter, appears to be a snarky olive branch that offers Einhorn an opportunity to change his mind about the electric car maker.
Einhorn’s Greenlight Capital, which declined by 34% last year partly due to his bet against Tesla, lost its bet against the electric car maker once more in the third quarter. In a letter to his firm’s investors, Einhorn admitted that TSLA was one of its “material losers” of Q3’19 while accusing Elon Musk of “knowingly” orchestrating “significant fraud” with Tesla’s SolarCity buyout in 2016. The TSLA short also accused the electric car maker of failing to warn customers about its burning solar panels and its car battery fires.
Musk, who appears to be adopting a rather confident stance, shared a letter to the hedge fund manager on Twitter. Playfully calling Einhorn by the German translation of his name and dubbing himself as “Treelon Musk,” the Tesla CEO extended a rather snarky olive branch to the short seller. In his letter, Musk invited Einhorn to meet with him and see Tesla’s work firsthand, something that would be wise for the sake of Greenlight Capital’s investors.
😘 pic.twitter.com/w0BkNGbvQ1— Elon Musk (@elonmusk) November 8, 2019
Following is Musk’s letter in full.
Dear Mr. Unicorn (fabulous name btw),
We read your Greenlight Capital Q3’19 Investor Letter, in which you make numerous false allegations against Tesla. It is understandable that you wish to save face with your investors, given the losses you suffered from Tesla’s successful third quarter, especially since you’ve had several down years in performance and a sharp drop in assets under management from $15 billion to $5 billion. You have our sympathies.
We also recognize your desire to feel somehow relevant with your Tesla short position at a time when your friends in the Tesla short community have been noticeably recoiling from the public discourse, as the world is increasingly recognizing Tesla’s contributions to science, safety and a sustainable environment.
To the extent that you have any desire to learn about the amazing progress the people of Tesla are making, I would like to extend an open invitation to meet with me to discuss Tesla and tour our facilities. For their sake, I’m certain your investors would appreciate you getting smart on Tesla.
Finally, please allow us to send you a gift of short shorts to help you through this difficult time.
Regards,
Treelon Musk
Musk’s reference to Einhorn and a box of short shorts is based on a series of amusing events last year which began with Einhorn stating that he is not renewing the lease on his Tesla Model S due to tech issues with the car. Responding on Twitter, Musk stated that Tesla will “send Einhorn a box of short shorts to comfort him through this difficult time.” Following Elon Musk’s tweet, apparel maker Chubbies opted to send the hedge fund manager a literal box of shorts, most of which featured a very short 5.5-inch inseam.
on it fam. pic.twitter.com/KuiyscNu0e— Chubbies (@Chubbies) August 1, 2018
Sure enough, Einhorn received his shorts, and he promptly took to Twitter to thank the Tesla CEO for being a “man of his word.” Musk responded by playfully asking Einhorn to put them on and post a selfie, but the TSLA short-seller did not comply. Perhaps this year, things will be different, or maybe Chubbies would be up for the task once more, considering that Kyle Hency, one of the company’s founders, stated that they could keep sending short shorts to TSLA shorts if Elon Musk wishes.
Put them on & post a selfie— Elon Musk (@elonmusk) August 11, 2018
While Einhorn is a Tesla short and he continues to accuse Musk of fraud, among others, he appears to be a bit more level-headed compared to some of the angry, vapid TSLA retail and institutional short-sellers that populate Twitter. Perhaps this is one of the reasons why Musk actually opted to invite Einhorn in what seems to be an attempt to change the hedge fund manager’s mind. Elon Musk’s letter might be rife with snark, but it may, if Einhorn opts to respond, save his fund from more painful losses in the near future.
Tesla has scheduled its Earnings Call for Q4 and Full Year 2025 for next Wednesday, January 28, at 5:30 p.m. EST, and investors are already preparing to get some answers from executives regarding a wide variety of topics.
The company accepts several questions from retail investors through the platform Say, which then allows shareholders to vote on the best questions.
Tesla does not answer anything regarding future product releases, but they are willing to shed light on current timelines, progress of certain projects, and other plans.
There are five questions that range over a variety of topics, including SpaceX, Full Self-Driving, Robotaxi, and Optimus, which are currently in the lead to be asked and potentially answered by Elon Musk and other Tesla executives:
- You once said: Loyalty deserves loyalty. Will long-term Tesla shareholders still be prioritized if SpaceX does an IPO?
- Our Take – With a lot of speculation regarding an incoming SpaceX IPO, Tesla investors, especially long-term ones, should be able to benefit from an early opportunity to purchase shares. This has been discussed endlessly over the past year, and we must be getting close to it.
- When is FSD going to be 100% unsupervised?
- Our Take – Musk said today that this is essentially a solved problem, and it could be available in the U.S. by the end of this year.
- What is the current bottleneck to increase Robotaxi deployment & personal use unsupervised FSD? The safety/performance of the most recent models or people to monitor robots, robotaxis, in-car, or remotely? Or something else?
- Our Take – The bottleneck seems to be based on data, which Musk said Tesla needs 10 billion miles of data to achieve unsupervised FSD. Once that happens, regulatory issues will be what hold things up from moving forward.
- Regarding Optimus, could you share the current number of units deployed in Tesla factories and actively performing production tasks? What specific roles or operations are they handling, and how has their integration impacted factory efficiency or output?
- Our Take – Optimus is going to have a larger role in factories moving forward, and later this year, they will have larger responsibilities.
- Can you please tie purchased FSD to our owner accounts vs. locked to the car? This will help us enjoy it in any Tesla we drive/buy and reward us for hanging in so long, some of us since 2017.
- Our Take – This is a good one and should get us some additional information on the FSD transfer plans and Subscription-only model that Tesla will adopt soon.
Tesla will have its Earnings Call on Wednesday, January 28.
Elon Musk
Tesla locks in Elon Musk’s top problem solver as it enters its most ambitious era
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla has granted Senior Vice President of Automotive Tom Zhu more than 520,000 stock options, tying a significant portion of his compensation to the company’s long-term performance.
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla secures top talent
According to a Form 4 filing with the U.S. Securities and Exchange Commission, Tom Zhu received 520,021 stock options with an exercise price of $435.80 per share. Since the award will not fully vest until March 5, 2031, Zhu must remain at Tesla for more than five years to realize the award’s full benefit.
Considering that Tesla shares are currently trading at around the $445 to $450 per share level, Zhu will really only see gains in his equity award if Tesla’s stock price sees a notable rise over the years, as noted in a Sina Finance report.
Still, even at today’s prices, Zhu’s stock award is already worth over $230 million. If Tesla reaches the market cap targets set forth in Elon Musk’s 2025 CEO Performance Award, Zhu would become a billionaire from this equity award alone.
Tesla’s problem solver
Zhu joined Tesla in April 2014 and initially led the company’s Supercharger rollout in China. Later that year, he assumed the leadership of Tesla’s China business, where he played a central role in Tesla’s localization efforts, including expanding retail and service networks, and later, overseeing the development of Gigafactory Shanghai.
Zhu’s efforts helped transform China into one of Tesla’s most important markets and production hubs. In 2023, Tesla promoted Zhu to Senior Vice President of Automotive, placing him among the company’s core global executives and expanding his influence beyond China. He has since garnered a reputation as the company’s problem solver, being tapped by Elon Musk to help ramp Giga Texas’s vehicle production.
With this in mind, Tesla’s recent filing seems to suggest that the company is locking in its top talent as it enters its newest, most ambitious era to date. As could be seen in the targets of Elon Musk’s 2025 pay package, Tesla is now aiming to be the world’s largest company by market cap, and it is aiming to achieve production levels that are unheard of. Zhu’s talents would definitely be of use in this stage of the company’s growth.
Tesla analyst Andrew Percoco of Morgan Stanley teased the company’s dominance in its self-driving initiative, stating that its lead over competitors is “not even close.”
Percoco recently overtook coverage of Tesla stock from Adam Jonas, who had covered the company at Morgan Stanley for years. Percoco is handling Tesla now that Jonas is covering embodied AI stocks and no longer automotive.
His first move after grabbing coverage was to adjust the price target from $410 to $425, as well as the rating from ‘Overweight’ to ‘Equal Weight.’
Percoco’s new note regarding Tesla highlights the company’s extensive lead in self-driving and autonomy projects, something that it has plenty of competition in, but has established its prowess over the past few years.
He writes:
“It’s not even close. Tesla continues to lead in autonomous driving, even as Nvidia rolls out new technology aimed at helping other automakers build driverless systems.”
Percoco’s main point regarding Tesla’s advantage is the company’s ability to collect large amounts of training data through its massive fleet, as millions of cars are driving throughout the world and gathering millions of miles of vehicle behavior on the road.
This is the main point that Percoco makes regarding Tesla’s lead in the entire autonomy sector: data is King, and Tesla has the most of it.
One big story that has hit the news over the past week is that of NVIDIA and its own self-driving suite, called Alpamayo. NVIDIA launched this open-source AI program last week, but it differs from Tesla’s in a significant fashion, especially from a hardware perspective, as it plans to use a combination of LiDAR, Radar, and Vision (Cameras) to operate.
Percoco said that NVIDIA’s announcement does not impact Morgan Stanley’s long-term opinions on Tesla and its strength or prowess in self-driving.
NVIDIA CEO Jensen Huang commends Tesla’s Elon Musk for early belief
And, for what it’s worth, NVIDIA CEO Jensen Huang even said some remarkable things about Tesla following the launch of Alpamayo:
“I think the Tesla stack is the most advanced autonomous vehicle stack in the world. I’m fairly certain they were already using end-to-end AI. Whether their AI did reasoning or not is somewhat secondary to that first part.”
Percoco reiterated both the $425 price target and the ‘Equal Weight’ rating on Tesla shares.
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