Mike Segar/REUTERS
Whitney Tilson
- Tesla shares will tank below $100 this year, the former hedge-fund manager Whitney Tilson reportedly said Monday.
- Last week, Tesla warned it might not be profitable in the first quarter.
- Tilson used to manage the $50 million hedge fund Kase Capital, which he closed in September 2017 following underperformance.
- Watch Tesla trade live.
Tesla shares will lose more than 60% of their value this year, the former hedge-fund manager Whitney Tilson said on Monday.
"Today I'm making one of my rare big calls: we will look back on last Friday as the beginning of the end for Tesla's stock," Tilson said in a newsletter distributed Monday that was seen by the research firm Quoth the Raven. He added that stock would be at "under $100" before the end of 2019.
"I sense that the number of investors who are losing confidence in Musk is finally exceeding those who are drinking his Kool Aid," Tilson said.
On Thursday, CEO Elon Musk warned that Tesla might not be profitable in the first quarter of 2019 after ending last year with two consecutive quarters of profitability. As recently as February, Musk expressed optimism that the company would be profitable in "all quarters going forward."
Tesla also announced it planned to shift to online-only sales and close most of its 378 retail stores. Using that strategy and other cost efficiencies, Tesla slashed the prices of its Model 3, Model S, and Model X vehicles by about 6% on average, according to a blog post.
The company's announcement showed that Tesla had lost its rising momentum, according to Tilson. "If Tesla had any positive card to play, they would have played it on Thursday afternoon in order to soften the blow," he said. "I think this means they are out of bullets."
Tilson previously managed Kase Capital, a $50 million hedge fund. He closed Kase in September 2017 amid underperformance.
Tesla was down 2.54% to $287.29 a share early Monday and was down 5% this year.
More from Tesla's big announcement:
- Tesla is shuttering most of its stores as the company switches to an online-only sales model
- Tesla has changed its Autopilot package - customers now have to pay more for some features
- More layoffs expected at Tesla as the company shutters most of its retail stores
- Elon Musk says Tesla will probably not be profitable in the first quarter of 2019
- Tesla's $35,000 Model 3 is coming - here's what Wall Street is saying
- Tesla stock slides after Elon Musk warns it won't be profitable in Q1
MI