Tesla Stock Dives Amid Call For Bankruptcy In 4 Months

Tesla Stock Dives Amid Call For Bankruptcy In 4 Months
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Tesla Inc (NASDAQ:TSLA) stock tumbled another 4% on Tuesday after a long-time bear built a case for it to slide even further. He feels a Tesla bankruptcy is imminent. Although TSLA remains above where it was this time a year ago, short-sellers see it falling even further. The automaker’s junk bonds are being heavily shorted as well, and more and more reports indicate that sentiment on Tesla stock is shifting heavily toward the bearish side, although one bull doesn’t think that’s necessarily a bad thing.

Hedge fund manager believes Tesla bankruptcy is near

ValueWalk obtained an email sent by Vilas Capital Management manager John Thompson to clients over the weekend, in which he explained why he thinks bankruptcy will be a reality for Tesla within the next three to six months. In a follow-up interview, he told MarketWatch that he sees Tesla filing for bankruptcy within the next four months—unless its celebrity CEO Elon Musk “pulls a rabbit out of his hat.”

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investor 1652197064It's no secret that this year has been a volatile one for the markets. The S&P 500 is down 18% year to date, while the Nasdaq Composite is off by 27% year to date. Meanwhile, the VIX, a key measure of volatility, is up 49% year to date at 24.72. However, it has spiked as Read More

In the email obtained by ValueWalk, he said that Tesla is “without any doubt, on the verge of bankruptcy” and that he has “suspicions of fraudulent accounting activities, evidenced by 85 SEC letters/investigations and two top finance people leaving in the last month.” He also told MarketWatch today that the automaker has “one of the worst income statements” he has ever seen.