Mike Segar/REUTERS
- Tesla will tank below $100 by the end of this year as the company, 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 and closed Kase in September 2017 after its underperformance.
- Watch Tesla trade live.
Tesla has disappointed its investors and will tank more than 60% of its value by the end of this year, 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 seen by the research firm Quoth the Raven. He added that stock will 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 Tesla might not be profitable in the first quarter of 2019 after achieving two consecutive quarters of profitability in the second half of last year, a first in the company’s history. In February, Musk said the company would be profitable in "all quarters going forward."
Tesla also announced it was shifting to online-only sales and closing most of its 378 retail stores. In part to its moves to shift all sales online and other ongoing 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 has 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 of 2017 after its underperformance.
Tesla was down 2.54% to $287.29 a share Monday and was down 5% so far this year.
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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
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Source: Business Insider – ejiang@businessinsider.com (Ethel Jiang)