Investment Analyst Steve Eisman is Betting Against Tesla


#1

Eisman gained mainstream notoriety when his story was depicted in the Michael Lewis book “The Big Short,” and Eisman was later depicted by actor Steve Carell in the Hollywood movie based on the book. Eisman famously predicted and profited off of the collapse of the U.S. housing market in 2007 and 2008. In an interview with Bloomberg on Friday, Eisman says he’s now betting on a similar fate for Tesla.”

https://money.usnews.com/investing/stock-market-news/articles/2018-07-30/tesla-inc-tsla-stock

I’m not buying it. Tesla’s indeed having significant corporate difficulties, but the biggest problem is they can’t make their cars fast enough and on budget, not that they can’t sell their cars. If the cars didn’t sell, then such a pessimistic outlook would make more sense.


#2

OTOH, if Tesla can’t figure out how to build reasonably reliable cars in a comparable time to their competitors, they can’t remain in business. I hope they continue in business, but they can’t lose money forever.


#3

The thing is I think there has only been two quarters that he has managed to operate in the black. Operating on borrowed money is not a long term success strategy. Then throw in having to make cars in a tent with human welders because the robots aren’t cooperating, plus the quality issues, suggests there is a real problem in pushing the product out the door, regardless of sales and losing some of his key personnel. Then of course is the sun-setting of the tax breaks causing some to cancel orders, not to mention that the body styles are getting stale already. All in all, the candle is not burning very bright if you take a hard look at the operation.


#4

Tesla has asked for money back from suppliers for purchases going back to2014 because without it they will not be in the black at all this year. To top it off Tesla has not produced any ot the $35000 cars they promised and have no timetable for producing them. To make it worse their solar panel division is bleeding money and sales are falling because people are finding out that the cost savings of their solar panels in most of the country are a vodoo math illusion.

Solar City’s calculator wanted $65000 up front to install solar panels on my house. My electric bill is only $900 a year. If I put $65000 in a CD it would more than pay my electric bill with the interest and I would still have my $65000. If I had to finance $65000, the math is even worse.


#5

I don’t remember the numbers or even who exactly although I think I knew them, but there was a big article in the paper a year or two ago on them going solar and what a good deal it was going to be. If I remember right it was a break even after about ten years mainly because of the energy credits. Seems to me the power company was kicking in quite a bit of it because they are under a legal mandate. At any rate they were excited but it sounded pretty risky to me. I’m always concerned going out 10-20 years on anything due to obsolescence, having to replace the roof or the panels themselves, etc. So I’m not lining up to install them.


#6

Yes, they calculated my savings after 30 years as $12000 after a $16000 rebate. They calculated a 2% increase in electric rates per year but didn’t account for inflation because they said they couldn’t predict inflation.Also the overstated my annual electric costs to start with. Their figures assume no repairs for 30 years. What if your roof leaks? Would not do it even if the figures worked, I don’t have 30 years left.


#7

Tesla has just reached the 200K cars sold point where the tax incentives phase out. Tesla’s ability to raise capital is fading if not ended. I believe they are rapidly approaching a tip-over point in their existence.

They are building their “mass market” car. They have orders in hand (potential orders, the car’s not sold until the checks get cashed!). investors want to see the company in the black as Musk promised by the end of the year. The point of reckoning is at hand. I’m not betting either way.


#8

Big earnings report due tomorrow from Tesla. (Wednesday). Let’s see if Tesla offers facts about Model 3 deliveries and Model 3 reservations in the report. If there are no explicit facts laid out, you will know the news is not good. It will also be interesting to see is Tesla, Inc.'s solar power generation business is profitable.


#9

Could FOMO cause Tesla fans to see their cash deposits slip over the edge of that cliff everyone warns us about? There seemed to have been so many profitable opportunities in the production and marketing of various subsystems and hybrid variations that were ignored in an effort rushing toward the CROWN JEWEL and possible bankruptcy. But maybe it’s better to go down in a grand crash like Tucker as compared to Crosley and Kaiser.


#10

Tesla has already accomplished its goal. The idea behind Tesla was to prove that an electric car could be something enjoyable and practical to own and drive - a car you’d actually want to own rather than a car that you own because you feel a sense of obligation toward divorcing from fossil fuels.

They did that a long time ago. The Model S is a beautiful car, it’s comfortable, it’s faster than most gas-powered sedans (heck, in the P version it’s faster than most supercars), it’s got very good range so you don’t constantly suffer from charge anxiety.

And look what’s happened as a result - major carmakers are coming out of the woodwork with electric cars. Even Porsche is making one. And the few who were already making them have been spurred into making them better - the Leaf, for instance, is no longer a 60 mile-range enclosed golf cart, but a real, practical city car that wont’ make you wonder if you can get home if you have to run an errand or two after work.

Tesla set out to prove that electric cars can work, and work well. They did that. Even if they go away, their contributions to the automotive field are invaluable.

All that aside, I think Tesla would best be served by having Musk step down. The only person who makes more of an ass out of himself on Twitter is Trump, and when you act like a nutjob on Twitter the businesses you’re associated with can suffer. Calling the rescue diver a pedo because the guy happened to be in Thailand was the last straw for me. The ranting narcissist has to go.

If Musk stepped down and Tesla brought in established talent from the automotive industry (say, someone high up at Honda/Toyota) I think they’d be a runaway success. Even beyond the social media stupidities, Musk and his inability to focus is holding Tesla back.

And they also need to fire whoever thinks minimalist design is the wave of the future. They’re now talking about stripping everything but a floating tablet from the dashboard of the Model S. Yeah, because someone buying a $130,000 luxury car wants a plain-jane Ikea dashboard that looks like someone velcroed an iPad to the center. Dumb.


#11

Has Tesla developed an Us(?) against Them(?) culture battle? These days everything seems to be developing into grand 3-D cultural-financial-political chess games.


#12

Depends on the perspective. If I was an investor, I would not agree to that statement…maybe if you changed its to one


#13

If you were an investor and you did not realize that this was its goal (as it stated repeatedly when it formed, and further provided evidence for by allowing free use of its patents by anyone) then you didn’t do your homework. :wink:


#14

It’s obvious I am not for those reasons. People that knowingly did for that reason I would hardly call an “investor”.


#15

So we probably agree that Tesla as a business is a failure but maybe not as a social movement. I guess when investing money in a social movement, you shouldn’t be concerned with profit.


#16

Forget profit, you’re not likely getting your base investment back either. More appropriately known as a gift or donation.

I expressed my skepticism a few years back on this forum. Frankly, I’m surprised they’re still in the game at all. I read that quite a few people are pulling their orders as the effects of the koolaid have worn off over time. The tidy bowl man is circling the bowl…


#17

I think most of the orders being pulled are because 1. the tax credits are due to expire 2. some people are just tired of waiting 3. and it maybe because some like myself are upset at Musk being a twitter jerk.