In a letter to shareholders on Friday, David Einhorn, the founder of Tesla Big Short and Green Light Capital, disclosed that the companys earnings rose 11% in the first quarter, mainly from short Tesla and long companies including General Motors and AerCap, the worlds largest aircraft rental company. In the letter, Einhorn pointed out that Tesla faced a series of problems, including security and price reduction, and pointed out that Tesla exaggerated the market demand for Model 3. We believe that at this moment, the company is again on the verge of danger, he said.
In a letter to shareholders on Friday, Tesla Big Short and Greenlight Capital disclosed that its first quarter earnings rose 11%, mainly due to short Tesla, as well as multi-GM, AerCap, the worlds largest aircraft rental company, and Brighthouse Financial, the insurance company.
In the letter, Greenlight referred to a series of problems that plagued Tesla, including price cuts, layoffs, closures and non-closures, closures of service centers, cuts in capital expenditures, hasty product announcements and an exaggerated description of Teslas autonomous driving ability to distract investors from demand issues.
In the letter, David Einhorn, the founder of Green Light Capital, criticized Teslas cars as falling apart, the wheels are falling down, while Tesla advertised that his car was the safest; Teslas description of the autopilot function also misled consumers. Einhorn believes that safety issues and price cuts will have a significant impact on the price of used Tesla cars, and Tesla CEO Mask exaggerated the market demand for Model 3 electric vehicles.
We believe that at this moment, the company is again on the verge of danger, Einhorn said.
Green Light said Tesla would be lucky to earn a gross profit of $1 billion from ModelS and X this year, compared with $2.5 billion last year, due to lower prices and reduced market demand. Einhorn wrote,
Tesla still gives demand guidelines for 100,000 to 115,000 vehicles per quarter this year, and we dont see any possibility of driving such high demand. In fact, if Teslas demand did not surge elsewhere in the early days, the company would not be able to deliver in the first quarter.
Tesla released a quarterly trading report earlier this month, which showed that Teslas delivery volume had a record decline in the quarter. In the three months ending March 31, Tesla delivered 63,000 vehicles, down 31% from the previous year. Among them, the delivery of Model 3 was not as good as analysts expected. ModelS and ModelX also hit the lowest delivery in nearly a year.
Tesla shares, contrary to the trend of the market, have fallen by more than 13% so far this year. Tesla shares rose 0.15% to $268.81 at 2:48 p.m. EDT on Friday.
The previous day, Panasonic said it would freeze its Gigafactory1 expansion plan for Teslas super factory, due to some financial problems, and that Panasonics investment in Shanghai plants would also be suspended.
The Gigafactory plant cost about $4.5 billion. Last October, Panasonic President Kazuhiro Tsuga said he would invest $9.35 billion to $1.35 billion more in parallel with Tesla. The two companies had planned to increase Gigafactory 1 production by 50% next year. However, according to Nikkei News yesterday, the plan was temporarily shelved because of financial problems. Teslas huge loss or the main reason behind it.
Musk even publicly said earlier this year that the first quarter results to be released later this month could lead to some losses, ending the two consecutive quarters of earnings that had just been achieved.
In addition, on Thursday evening, Tesla announced that it would stop online sales of the $35,000 Model 3 electric car, which began several weeks ago, but said customers could still order the standard version of the electric car by phone or Tesla stores.
Currently, the online Model 3 has a minimum price of $39500, which is nearly 13% more expensive than the cheapest version. This is Teslas fourth adjustment to the lowest price of Model 3 this year.
Green Light Capital has been short Tesla since at least three years ago, and short Tesla made last years profits the worst in history. Tesla shares rose 6.9% last year, compared with 46% in 2017. Green Lights first quarter earnings also came from investments in GreenBrick Partners, a real estate developer, Deutsche Pfandbriefbank, Altice USA, a European telecommunications and media giant, and TempurSealy, a mattress maker. * This article is from Wall Street (Wechat ID: Wallstreetcn). Source: Editor-in-Charge of Wall Street: Wang Fengzhi_NT2541
Green Light Capital has been short Tesla since at least three years ago, and short Tesla made last years profits the worst in history. Tesla shares rose 6.9% last year, compared with 46% in 2017.
Green Lights first quarter earnings also came from investments in GreenBrick Partners, a real estate developer, Deutsche Pfandbriefbank, Altice USA, a European telecommunications and media giant, and TempurSealy, a mattress maker.
* This article is from Wall Street (Wechat ID: Wallstreetcn).