Tesla is 'out of bullets' and will plunge below $100 this year, former hedge-fund manager Whitney Tilson says


Tesla has disappointed its investors and will tank more than 60% of its value by the end of this year, former hedge fund manager Whitney Tilson said on Monday.

“Today I’m making one of my rare big calls: we will look back on last Friday as the beginning of the end for Tesla’s stock,” Tilson said in a newsletter distributed Monday seen by the research firm Quoth the Raven. He added that stock will be at “under $US100” before the end of 2019.

“I sense that the number of investors who are losing confidence in Musk is finally exceeding those who are drinking his Kool Aid,” Tilson said.

On Thursday, CEO Elon Musk warned Tesla might not be profitable in the first quarter of 2019 after achieving two consecutive quarters of profitability in the second half of last year, a first in the company’s history. In February, Musk said the company would be profitable in “all quarters going forward.”

Tesla also announced it was shifting to online-only sales and closing most of its 378 retail stores. In part to its moves to shift all sales online and other ongoing cost efficiencies, Tesla slashed the prices of its Model 3, Model S, and Model X vehicles by about 6% on average, according to a blog post.

The company’s announcement showed that Tesla has lost its rising momentum, according to Tilson. “If Tesla had any positive card to play, they would have played it on Thursday afternoon in order to soften the blow,” he said. “I think this means they are out of bullets.”

Tilson previously managed Kase Capital, a $US50 million hedge fund. He closed Kase in September of 2017 after its underperformance.

Tesla was down 2.54% to $US287.29 a share Monday and was down 5% so far this year.

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