Mark Spiegel’s Stanphyl Capital on its short Tesla Motors Inc (NASDAQ:TSLA) positions from its September letter to investors
But first see
- Q3 2016 hedge fund letters
- Q2 2016 hedge fund letters
- Q1 2016 hedge fund letters
For September 2016 the fund was down approximately 0.9% net of all fees and expenses. By way of comparison, the S&P 500 was unchanged while the Russell 2000 was up approximately 1.1%. Year to date the fund is up approximately 19.0% net while the S&P 500 is up approximately 7.8% and the Russell 2000 is up approximately 11.5%. Since inception on June 1, 2011 the fund is up approximately 106.3% net while the S&P 500 is up approximately 80.7% and the Russell 2000 is up approximately 59.1%. (The S&P and Russell performances are based on their “Total Returns” indices which include reinvested dividends.)
The third quarter will be our last chance to show investors that Tesla can be at least slightly positive cash flow and profitable before the Model 3 reaches full production… We are on the razor’s edge of achieving a good Q3, but it requires building and delivering every car we possibly can, while simultaneously trimming any cost that isn’t critical, at least for the next 4.5 weeks [emphasis mine]… Even more important, we will need to raise additional cash in Q4 to complete the Model 3 vehicle factory and the Gigafactory. The simple reality of it is that we will be in a far better position to convince potential investors to bet on us if the headline is not “Tesla Loses Money Again”, but rather “Tesla Defies All Expectations and Achieves Profitability”.
…while at the same time he was selling used Teslas at massively higher rates of depreciation.
…and yet here’s a direct quote from that lazily-written, intellectually vapid article: “Today Tesla sells 100% of its cars, with no discounts”…