“Tesla has certainly blinded a lot of people to an extremely dangerous and overvalued stock and a pathologically lying CEO”

Tesla Inc. (NASDAQ:TSLA) going under? Excerpted from Whitney Tilson’s Friday May 17th 2019 email to colleagues

More interesting dialogue with another reader, who writes:

Whitney: I was surprised to learn you had no financial stake in TSLA. I would’ve thought you were short, given that you’re obviously obsessed with the company (I don’t mean to use the word obsessed pejoratively, but clearly you spend a large majority of your daily time and energy on it).

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I also do not have a financial stake in TSLA. However, I admire Musk (despite his many, many flaws) for trying to solve climate change, and regardless of whether he's a liar, or overly aggressive in projections, or frankly (because I do not have a financial stake) if he's committing accounting fraud, I would happily overlook all of that if it helps him succeed in building TSLA and thus making a dent in the enormous climate change issue.

I think if you happen to be wrong (let's say there's a 2% chance you're wrong), I think you (and other shorts) did a grave disservice to society because we need more Musks (warts and all) if we want to have a shot at figuring out climate change -- and I wish shorts would spend less time on TSLA and more time on things like, for example, those that enabled the opioid crisis or polluters, or anyone other than companies that, if they succeed, will help solve climate change.

Just my 2c from a long-time reader!

My reply:

To prevent conflicts of interest, I am not allowed to have any positions in any stocks I write about.

I spend maybe an average of 15-30 min/day on Tesla – I’m a fast reader and, as you’ve probably noticed, most of what I send out it others’ stuff.

I have said a zillion times that “humanity owes Musk a debt of gratitude” (are you new to this list?) for almost singlehandedly forcing every major auto maker in the world to invest billions in EVs, but that doesn’t excuse his lies and outrageous behavior, nor will it preclude me from warning my readers about a stock that I think is highly likely to crash.

I’ve exposed numerous medical/phama frauds/promotions over the years, and your email reminds me of some of the emails I’ve received: “If there’s only a 2% chance that they come up with a cure for cancer…” Some of the biggest scams are those that tug at the heartstrings.

I am NOT saying that Tesla is a scam -- but I am saying that the environmental do-gooder angle on Tesla has certainly blinded a lot of people to an extremely dangerous and overvalued stock and a pathologically lying CEO.

2) From a friend (it KILLS me that I didn’t think to record that call):

Recent days and hours have been so filled with one Tesla drama after the next, that it's easy to forget what has been revealed to be the single biggest whopper of them all -- after the $420 funding secured, of course. What am I talking about?

On the May 2 funding call hosted by Goldman Sachs, Elon Musk said that Tesla wasn't going to spend the money it was in the process of raising that day.

That was of course beyond crazy on the face of it, right then and there. However, it came into new light in the last 24 or so hours, with the leaked internal memo, which basically says the company is bleeding cash and that the $2.4 billion just raised, may not last long.

Now, connect the dots: Elon promised on the deal call that they would not spend the money raised. Now, he's telling his employees otherwise:

https://www.cnbc.com/2019/05/17/elon-musk-calls-for-cost-control-in-memo-to-employees.html

Musk's loss of credibility happened a long time ago already. This most brazen lie has taken it to a whole new level.




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and three kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own 2.5 grams of Gold