Investor's Corner
Famed hedge fund betting against Tesla reports massive loss to customers, Elon Musk trolls with gift offering
David Einhorn, a staunch Tesla critic and owner of Greenlight Capital fund, revealed on Tuesday that his bet against the electric car maker resulted in heavy losses for his firm during the first half of 2018. In Q2 alone, Greenlight Capital lost 5.4%, bringing the fund’s losses from January to June to 18.3%.
In a letter to investors acquired by Reuters on Tuesday, Einhorn revealed that his stance against Tesla aggravated Greenlight’s grim returns. During the second quarter, Tesla shares (NASDAQ:TSLA) rose 29%, becoming the hedge fund’s “second biggest loser.” Einhorn later added in a later note that the fund’s returns fell 0.4% more in July, bringing Greenlight’s total losses to 18.6% for the year.
Einhorn, who leased a Model S, has pushed the notion that Tesla’s electric cars are unreliable and even dangerous, while criticizing the California-based company’s cash burn. Despite his complaints, as well as increasingly negative media coverage on Tesla and Elon Musk, the company’s stock has remained strong, turning Einhorn’s short bet into substantial losses. In his letter to investors, the hedge fund owner admitted that mistakes had been made, and Greenlight’s returns over the past three years have been “far worse than we could have imagined.” Due to the fund’s performance, Einhorn revealed that some investors have run out of patience and asked for their money back.
Regardless of his fund’s losses, Einhorn still maintains his short position against Tesla, stating that he doubts the Model 3 could be “produced profitably anytime soon, if ever.” Einhorn also criticized Tesla’s ongoing initiatives to rush the Model 3 to reservation holders, as well as Elon Musk’s “erratic and desperate” behavior on social media.
“Right now the market is telling us we are wrong, wrong, wrong about nearly everything. We wonder whether surge production techniques to support self-congratulatory tweets are economically efficient ways of ramping production, or whether customers will be happy with the quality of a car rush through production to prove a point to short sellers. The most striking feature of the quarter is that Elon Musk appears erratic and desperate,” Einhorn wrote.
The Greenfield Capital owner also wrote in his letter that he has already made moves to stem the firm’s losses. Einhorn, for one, stated that he had covered most of the firm’s short position on Netflix Inc. between January and April. He also exited a bet on Resona Holdings, a Japanese bank, while selling Dillard’s at a loss. Furthermore, Einhorn covered a 5-year bet against Elekta AB with a small gain.
In response to reports of Einhorn opting not to renew his Model S’ lease, Tesla CEO Elon Musk fired off a tweet trolling the hedge fund owner.
Tragic. Will send Einhorn a box of short shorts to comfort him through this difficult time.
— Elon Musk (@elonmusk) August 1, 2018
Tesla is set to release its Q2 financial report after markets close today, followed by an earnings call at 2:30 p.m. PST (5:30 p.m. EST). Consensus among Wall Street analysts suggests that Tesla would be reporting a loss of $2.81 per share, as well as a revenue of around $3.97 billion. Tesla is also expected to release figures about the Model 3’s ongoing ramp and delivery guidance for the rest of the year, considering that the company has recently crossed the 200,000-vehicle mark that triggers a phase-out period for the $7,500 federal tax credit granted to buyers of new electric cars.
As Tesla heads into what could very well be an earnings call signifying a turning point for the company, reports have also emerged from sources that the electric car maker plans to invest $5 billion to construct Gigafactory 3 in Shanghai. Tesla is reportedly looking to raise funds in China to finance a portion of the investment needed for the factory, which is expected to start producing vehicles by 2020.
Investor's Corner
Tesla wins $508 price target from Stifel as Robotaxi rollout gains speed
The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Tesla received another round of bullish analyst updates this week, led by Stifel, raising its price target to $508 from $483 while reaffirming a “Buy” rating. The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Robotaxi rollout, FSD updates, and new affordable cars
Stifel expects Tesla’s robotaxi fleet to expand into 8–10 major metropolitan areas by the end of 2025, including Austin, where early deployments without safety drivers are targeted before year-end. Additional markets under evaluation include Nevada, Florida, and Arizona, as noted in an Investing.com report. The firm also highlighted strong early performance for FSD Version 14, with upcoming releases adding new “reasoning capabilities” designed to improve complex decision-making using full 360-degree vision.
Tesla has also taken steps to offset the loss of U.S. EV tax credits by launching the Model Y Standard and Model 3 Standard at $39,990 and $36,990, Stifel noted. Both vehicles deliver more than 300 miles of range and are positioned to sustain demand despite shifting incentives. Stifel raised its EBITDA forecasts to $14.9 billion for 2025 and $19.5 billion for 2026, assigning partial valuation weightings to Tesla’s FSD, robotaxi, and Optimus initiatives.
TD Cowen also places an optimistic price target
TD Cowen reiterated its Buy rating with a $509 price target after a research tour of Giga Texas, citing production scale and operational execution as key strengths. The firm posted its optimistic price target following a recent Mobility Bus tour in Austin. The tour included a visit to Giga Texas, which offered fresh insights into the company’s operations and prospects.
Additional analyst movements include Truist Securities maintaining its Hold rating following shareholder approval of Elon Musk’s compensation plan, viewing the vote as reducing leadership uncertainty.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Investor's Corner
Tesla receives major institutional boost with Nomura’s rising stake
The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Tesla (NASDAQ:TSLA) has gained fresh institutional support, with Nomura Asset Management expanding its position in the automaker.
Nomura boosted its Tesla holdings by 4.2%, adding 47,674 shares and bringing its total position to more than 1.17 million shares valued at roughly $373.6 million. The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Institutional investors and TSLA
Nomura’s filing was released alongside several other fund updates. Brighton Jones LLC boosted its holdings by 11.8%, as noted in a MarketBeat report, and Revolve Wealth Partners lifted its TSLA position by 21.2%. Bison Wealth increased its Tesla stake by 52.2%, AMG National Trust Bank increased its position in shares of Tesla by 11.8%, and FAS Wealth Partners increased its TSLA holdings by 22.1%. About 66% of all outstanding Tesla shares are now owned by institutional investors.
The buying comes shortly after Tesla reported better-than-expected quarterly earnings, posting $0.50 per share compared with the $0.48 consensus. Revenue reached $28.10 billion, topping Wall Street’s $24.98 billion estimate. Despite the earnings beat, Tesla continues to trade at a steep premium relative to peers, with a market cap hovering around $1.34 trillion and a price-to-earnings ratio near 270.
Recent insider sales
Some Tesla insiders have sold stock as of late. CFO Vaibhav Taneja sold 2,606 shares in early September for just over $918,000, reducing his personal stake by about 21%. Director James R. Murdoch executed a far larger sale, offloading 120,000 shares for roughly $42 million and trimming his holdings by nearly 15%. Over the past three months, Tesla insiders have collectively sold 202,606 shares valued at approximately $75.6 million, as per SEC disclosures.
Tesla is currently entering its next phase of growth, and if it is successful, it could very well become the world’s most valuable company as a result. The company has several high-profile projects expected to be rolled out in the coming years, including Optimus, the humanoid robot, and the Cybercab, an autonomous two-seater with the potential to change the face of roads across the globe.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Investor's Corner
Ron Baron states Tesla and SpaceX are lifetime investments
Baron, one of Tesla’s longest-standing bulls, reiterated that his personal stake in the company remains fully intact even as volatility pressures the broader market.
Billionaire investor Ron Baron says he isn’t touching a single share of his personal Tesla holdings despite the recent selloff in the tech sector. Baron, one of Tesla’s longest-standing bulls, reiterated that his personal stake in the company remains fully intact even as volatility pressures the broader market.
Baron doubles down on Tesla
Speaking on CNBC’s Squawk Box, Baron stated that he is largely unfazed by the market downturn, describing his approach during the selloff as simply “looking” for opportunities. He emphasized that Tesla remains the centerpiece of his long-term strategy, recalling that although Baron Funds once sold 30% of its Tesla position due to client pressure, he personally refused to trim any of his personal holdings.
“We sold 30% for clients. I did not sell personally a single share,” he said. Baron’s exposure highlighted this stance, stating that roughly 40% of his personal net worth is invested in Tesla alone. The legendary investor stated that he has already made about $8 billion from Tesla from an investment of $400 million when he started, and believes that figure could rise fivefold over the next decade as the company scales its technology, manufacturing, and autonomy roadmap.
A lifelong investment
Baron’s commitment extends beyond Tesla. He stated that he also holds about 25% of his personal wealth in SpaceX and another 35% in Baron mutual funds, creating a highly concentrated portfolio built around Elon Musk–led companies. During the interview, Baron revisited a decades-old promise he made to his fund’s board when he sought approval to invest in publicly traded companies.
“I told the board, ‘If you let me invest a certain amount of money, then I will promise that I won’t sell any of my stock. I will be the last person out of the stock,’” he said. “I will not sell a single share of my shares until my clients sold 100% of their shares. … And I don’t expect to sell in my lifetime Tesla or SpaceX.”
Watch Ron Baron’s CNBC interview below.
@teslarati :rotating_light: This is why you need to use off-peak rates at Tesla Superchargers! #tesla #evcharging #fyp ♬ Blue Moon – Muspace Lofi
Tesla FSD and Robotaxis are making people aware how bad human drivers are
Tesla lands approval for Robotaxi operation in third U.S. state
