Vilas – Tesla “in deep trouble, both financially and legally”

Vilas – Tesla “in deep trouble, both financially and legally”
<a href="">JamesQube</a> / Pixabay

An update from the now famous Vilas Capital Management on Tesla Inc. (NASDAQ:TSLA) and why they think the company might be in trouble – see below for their recent email to investors entitled ” Tesla’s Full Self Driving”

Also see Vilas Tesla near bankrupt

Dear Partners,

ADW Capital’s 2020 letter: Long CDON, the future Amazon of the Nordics

Investing Greenhaven Road CapitalADW Capital Partners was up 119.2% for 2020, compared to a 13.77% gain for the S&P 500, an 11.17% increase for the Russell 2000, and an 8.62% return for the Russell 2000 Value Index. The fund reports an annualized return of 24.63% since its inception in 2005. Q4 2020 hedge fund letters, conferences and more Read More

It appears that Tesla will have significant liability when the lawyers get ahold of them.  A horrible accident in California occured when the Tesla autopilot was engaged.  Here is how they market Full Self Driving on their website (please see paragraph 2), an option they charge $3000 for:

In addition, the company late Thursday night recalled 120,000 Model S sedans.  I think that they are in deep trouble, both financially and legally, for past decisions and actions.  These include selling a car with an option that does not work, at best, and is dangerous, at worst, as well as financing the company with mostly debt.  When operating in a very competitive, highly cyclical industry with huge capital expenditure needs, debt is like an anchor around your neck.  In an effort to maximize their shareholder returns if all went perfectly, Tesla’s management made zero a likely result.

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