Whitney Tilson’s email to investors discussing if Tesla Inc (NASDAQ:TSLA)’s recent acquisition, Maxwell Technologies Inc (NASDAQ:MXWL), will be a game changer for the company.
One reader asked:
Was talking Tesla with a friend and he told me he thinks Maxwell Technologies will be a game changer for Tesla. Have you or any other shorts looked into it?
I think I am humble enough to say that I am not smart or qualified enough to evaluate Maxwell’s technology. By way of background, I have been pitched the Maxwell story since 1999 -- for 20 years now. I have had multiple people -- very smart people I know -- swear that Maxwell would become the biggest thing since sliced bread.
There are two things I know about Maxwell in today’s context:
First, the company has been on sale for so many years already. The company has been shopped to everyone. People with all the expertise in the world have investigated the company in detail. Nobody thought it was worth $200 million.
Second, I would not take that guy in the YouTube video’s word for it. If I know too little about Maxwell to have an intelligent opinion, he probably isn’t any better either.
My hunch is this: If you had asked that YouTube guy, say, a year ago about Maxwell -- but said that they have a revolutionary technology that will bring Tesla to its knees -- he would likely have attacked the company and its technology. He would have made a video showing how Maxwell had useless technology that stands no chance against Tesla.
In other words, now that Maxwell is “on Tesla’s side” (having been acquired by Tesla), he’s making up whatever he can to make the pro-Maxwell case. All that mattered was that Maxwell would have been bad if it tried to compete with Tesla, but now that Musk has said that Maxwell is good, and has acquired Tesla, it must be great. I suspect it is a purely partisan argument from that YouTube guy.
Again, I don’t know whether Maxwell is great or a disaster. It really could be anything. But I’m slightly on the skeptical side given that every company anywhere near these industries did due diligence on Maxwell for so many years, and didn’t think it was worth even $200 million. All other things equal, I trust their judgment in this case.
But I could be wrong here.