Tesla Motors Inc (NASDAQ:TSLA) could turn out to be a “killer” investment, says DoubleLine Capital’s Jeffrey Gundlach. In an interview with Bloomberg News, Gundlach said that he would rather own the electric vehicle maker, instead of Twitter Inc (NYSE:TWTR). He argues that the Elon Musk-led company has the potential to transform the automobile industry with its cutting-edge EV technology.
Gundlach wants Tesla to focus entirely on batteries
Jeffrey Gundlach believes that Twitter Inc (NYSE:TWTR) doesn’t really create anything. Of course, it acts as a platform for information flow, but it doesn’t create anything. Tesla Motors Inc (NASDAQ:TSLA) is planning to launch a mass-market Gen III car by 2017, powered by battery packs. Gundlach said that a “speculative” bet on the electric vehicle maker has a 30% chance of yielding huge returns for investors.
Gundlach said that he would try to persuade Elon Musk, who happens to be his neighbor, to cut a deal with automakers where Tesla Motors Inc (NASDAQ:TSLA) stops producing vehicles, and supply them with batteries. Tesla has planned a $5 billion Gigafactory, which is expected to become operational in about three years. The Gigafactory will employ 6,500 people, and will produce battery packs for about 500K vehicles every year.
Twitter is no Tesla
Twitter Inc (NYSE:TWTR) shares have fallen from their December 26 peak of $74 to less than $32 on Tuesday. The stock slumped 17.81% on Tuesday as the company lifted restrictions on share sales by early investors and insiders. Investors are concerned about Twitter’s future growth prospects. The microblogging company’s user growth is slowing rapidly despite its attempts to make its platforms more user-friendly. However, there is still a section of experts who believe that its user growth will pick up in coming quarters.
Jeffrey Gundlach is known to have accurately predicted the mortgage crisis in 2007. In 2012, he told investors to bet against Apple Inc. (NASDAQ:AAPL), and predicted that the stock would plunge to $425. And Apple shares plummeted from their September 2012 high of $705 to $390 by April 2013.
Tesla Motors Inc (NASDAQ:TSLA) shares gained 1.52% to $210.42 in pre-market trading Wednesday.