Mike Segar/REUTERS
Whitney Tilson
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.
MI
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