Einhorn Says Tesla Once Again "On Brink Of Failure"


“We believe that right here, right now, the company appears to again be on the brink.”

MarketWatch reports Tesla again ‘on the brink’ of failure, says Einhorn's Greenlight hedge fund.

Tesla Inc.’s “wheels are falling off,” sometimes literally, and the Silicon Valley car maker appears to “again be on the brink” of failure, David Einhorn’s Greenlight Capital told investors Friday.

Hedge-fund titan Einhorn is a frequent Tesla critic who has called Chief Executive Elon Musk “erratic and desperate” and last year compared Tesla’s path to the path of doomed investment bank Lehman Brothers.

While Musk may promise Model 3 worldwide demand of around 500,000 to 700,000, “the reality is quite different,” as demand from the fan base has already been satisfied, Greenlight said.

“If Q1 is any indication, total annual global demand for the Model 3 is 200,000 vehicles,” it said. “We believe that (Tesla’s) poor reputation for quality and service and diminishing tax incentives are limiting broader demand.”

“We believe that right here, right now, the company appears to again be on the brink,” Greenlight said.

“The signs are everywhere, from the lack of demand, desperate price cutting, layoffs, closing-and-then-not-closing stores, closing service centers, cutting capex, rushed product announcements and a new effort to distract investors from the demand problem with hyperbole over (Tesla’s) autonomous driving capabilities,” it said.

Tesla Won't Survive

I side with Einhorn on one point: Tesla will not survive. The company has too much debt and its product is poor.

Timing is another matter. Story stocks survive much longer than anyone thinks, then collapse all of a sudden.

When? I don't know.

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Duanne Johnson 10 months ago Member's comment

So is his fund balance.

Barry Hochhauser 10 months ago Member's comment

#Tesla is always on "the brink of failure." Yet always pulls through. $TSLA

Moon Kil Woong 10 months ago Contributor's comment

They can sell off pieces of themselves if they get in big enough trouble. That would be the sign. There are way too many variables to declare that it will or won't survive. The chief issue is whether or not they can raise more capital or equity in the near term.

Craig Newman 10 months ago Member's comment

The last time, "single digits weeks" from failure, LRon was pumping. Just like now. Demand is gone until a sub $25k car comes.