Whitney Tilson On Tesla “It’s still not too late to get out. This stock is going down a lot more. Don’t say I didn’t warn you…”

Whitney Tilson’s email to investors describing who he is and what he does; his big calls, the latest of which is Tesla Inc (NASDAQ:TSLA).

Whitney Tilson big call

In response to one of my e-mails about Tesla, one of the folks on my Tesla e-mail lis, who’s bullish on the stock (he’s owned a Model S for many years), e-mailed me the following:

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Q1 hedge fund letters, conference, scoops etc

Please practice better and more careful reporting. You have an agenda, not that hard to discern, but similar to Fox, it makes all your comments suspect... and there are a number that are useful if they weren't so shrill.

Here was my reply:

Thank you for giving me the opportunity to clarify who I am and what I do.

I am not a journalist, though much of what I do is similar to what any good reporter does: I read a lot, talk to/e-mail with many people, and try to deeply understand complex companies and issues.

But I am, first and foremost, an investor and, secondarily, an investment newsletter publisher.

This means that, unlike a journalist, my goal is, first, to develop a strong opinion about the future of a company or industry – ideally one that is out of consensus (and therefore not reflected in the stock price(s).

Then, I write up my analysis and resulting conclusion (what you pejoratively call "an agenda") and share it with my readers. (I give much of it away for free in Empire Financial Daily, but reserve the best ideas for my paid-up subscribers of the Empire Investment Report – you can sign up for it here; there is a 30-day money-back guarantee.)

I have three objectives: to educate, entertain, and enrich all of my readers, whether subscribers or not.

Every day in these e-mails, I seek to provide solid insights, sound advice, and provocative opinions (if I don't make you laugh out loud and/or spit out your coffee at least once a week, I'm not doing my job!).

In addition, I look, a few times a year, to make a big, bold call. I only do so when I'm extremely confident I'll be proven right. People pay attention because I have a two-decade track record to back me up. Past examples include:

  • Recommending Apple (AAPL) when it had a $7.2 billion market cap (vs. $850 billion today) and warning about Cisco (CSCO) when its market cap was $395 billion (vs. $247 billion today), on October 16, 2000 ( Cisco, Apple, and Probabilities)
  • Pitching Netflix (NFLX) at my conference and on CNBC the day it bottomed at $7.78 on October 1, 2012, when I called it "this decade's Amazon" (you can see my slides here)
  • Warning about the Internet, housing, 3D printing, bitcoin, and pot stock bubbles right at their peaks (in the case of the latter two, to the very hour!).

My latest big call is the prediction I made on March 4 that Tesla's stock would crash to $100 by year-end: Friday was the beginning of the end for Tesla.

Almost every day since then, I have continued to pound the table, warning my readers to avoid what I consider to be the most dangerous stock in America. If that means I have "an agenda" and am "shrill," then I am guilty as charged... and proud of it. I've heard from many people whom I've made/saved a lot of money...

Which isn't to say that I won't consider or present the bull case on the stock. Heck, one of my analysts owns both the car and the stock, and I engage with him daily on the latter, often sharing his viewpoint with those on my Tesla e-mail.

In conclusion, only two and half months after my big call, the stock is already halfway to my price target. If you'd listened to me rather than sending me so many critical e-mails, you'd have saved yourself a 32% loss so far.

It's still not too late to get out. This stock is going down a lot more. Don't say I didn't warn you...

Best regards,

Whitney




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 four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore 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 a few grams of Gold and Silver