Top Performing Hedge Fund: We Believe Elon Musk Is “Likely” To Go To Jail

Top Performing Hedge Fund: We Believe Elon Musk Is “Likely” To Go To Jail
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Vilas Capital with an update on their Tesla short thesis – excerpted from an email sent to investors just moments ago – see link at the bottom of this article for more info on the hedge fund

Dear Partners,

It is now clear that Tesla never had a signed commitment letter from any investor or group of investors, nor did Tesla’s Board approve this transaction.  Thus, the comments by Elon Musk on Twitter that “Funding Secured” and that “Investor support is confirmed.  Only reason why this is not certain is it is contingent on a shareholder vote” were outright lies about material corporate developments and, therefore, violate securities laws.
Due to these facts, along with past statements, the SEC is formally investigating Elon Musk and Tesla.  We believe that the outcome of this investigation will be criminal charges, likely imprisonment of Mr. Musk, and his removal as an officer of Tesla.
Tesla stock traded at least 10 million shares per day the last 15 trading days.  Thus, 150 million shares traded hands.  The stock initially rose to $385 and then fell to its current price of $317.  We estimate that the purchasers of the shares lost at least $30 per share on average.  Thus, the loss to these buyers could be in the range of $4-5 billion (150 million times 30).  Adding in punitive amounts, we believe that the total amount of damages will be in the $10 billion range.  Tesla does not have these types of sums available to it.

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We now know that there are no buyers of the company equity at $420 per share or anywhere close to that valuation.  Further, companies under formal SEC investigations have a very difficult, if not impossible, time raising capital from banks, bond investors, equity investors or suppliers.  Given the losses that Tesla has been experiencing, which we believe, despite management assurances of profits, will continue over the next 12-24 months, their worsening balance sheet, capital expenditure needs, large working capital needs, expiring tax credits, new competition from Jaguar, Audi, Mercedes, VW, BMW, GM, etc, and a supplier base that is becoming quite nervous, we believe that Tesla will be forced into bankruptcy protection from its creditors by year end or, at the latest, by March 31.
In the event that these predictions come to fruition in the next 6-12 months, the Vilas Fund, LP should experience a material gain.
John C. Thompson, CFA
CEO and Chief Investment Officer
Vilas Capital Management, LLC
Fund Manager Profile: Kris Sidial Of Tail Risk Fund Ambrus Group

invest Southpoint CapitalA decade ago, no one talked about tail risk hedge funds, which were a minuscule niche of the market. However, today many large investors, including pension funds and other institutions, have mandates that require the inclusion of tail risk protection. In a recent interview with ValueWalk, Kris Sidial of tail risk fund Ambrus Group, a Read More

Jacob Wolinsky is the founder of, a popular value investing and hedge fund focused investment website. 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) - 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
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