Tesla stock is hitting record highs, but David Einhorn isn’t buying it.
The investor famous for a long history of high returns is currently shorting, or betting against, shares of Tesla. This hasn’t been good for returns at his firm as Tesla shares are up 58.2% so far this year.
Einhorn said he has been making short bets against the company because he doesn’t believe it will ever become profitable.
“If the purpose of a business is to advance the future, to have science experiments and cool buzzword things, you would get into Tesla,” Einhorn said in an interview with Bloomberg. “But [CEO Elon Musk] has yet to take any money and turn it into a profitable business.”
Einhorn said he doesn’t see this changing.
When asked which company CEO he would rather give $US20 billion to, he predictably answered GM’s Mary Barra.
“If [the purpose of the money] is to earn a profit and return, I think you would give it to Mary Barra because GM is interested in its return on capital,” he told Bloomberg.
GM’s current plan is to try and make a 20% return for its investors, while Tesla recently sent out a call for money as it tries to fund the launch of its Model 3 sedan.
As for when his short position will work out for his firm, Einhorn seemed unsure.
“Eventually, the company will be called into account to demonstrate profitability,” Einhorn said. “I don’t know when that will happen.”