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Tesla bear says Elon Musk’s EV maker will ‘go bust,’ stock worth $14

Portfolio manager says Tesla could go bust

Elon Musk, CEO of Tesla, speaks at the Atreju political convention organized by Fratelli d’Italia (Brothers of Italy), in Rome, Italy, on Dec. 15, 2023.

Antonio Masiello | Getty Images

Tesla could “go bust” while its stock could fall to $14, Per Lekander, a hedge fund manager who has been shorting Elon Musk’s electric carmaker since 2020, told CNBC on Wednesday.

His comments come after Tesla reported 386,810 vehicle deliveries in the first quarter of the year, significantly below even the lowest market estimates.

“This was really the beginning of the end of the Tesla bubble, which probably, arguably was the biggest stock market bubble in modern history,” Lekander, managing partner at investment management firm Clean Energy Transition, told CNBC’s “Squawk Box Europe.”

“I actually think the company could go bust.” Tesla was not immediately available for comment when contacted by CNBC.

Lekander was a former portfolio manager at investment firm Lansdowne Partners who successfully called a 2018 rally in carbon prices. Since 2020, Clean Energy Transition has been short Tesla’s stock, meaning Lekander’s firm will profit if the automaker’s shares fall.

In a March 2021 interview with CNBC, Lekander called for Tesla’s stock to go down. At the time of the interview, Tesla’s shares closed at $233.94. On Tuesday, the stock closed at $166.63. But Lekander also called for a comeback of the traditional automakers, singling out Volkswagen. Volkswagen’s shares have fallen around 53% since that call, though they have rallied at the start of this year.

Lekander has taken his bearish Tesla call further, suggesting the stock could fall to $14 per share. He said his call is based on an estimate that Tesla’s full-year earnings per share this year would be $1.40. Lekander argues that Tesla is a “no growth” stock and should be valued on 10 times forward earnings, versus around 58 times forward earnings currently. Forward earnings are an important metric used by traders to gauge the value of a stock.

If Tesla’s stock hit $14, that would represent around 91% downside from Tuesday’s close. Tesla’s shares have already fallen more than 30% this year.

“I think however Tesla cannot be at $14. If it falls under a certain level because of everything that’s been going on, it’s going to go bust.”

Lekander gave a number of reasons for his negative outlook. He said Tesla’s business model has been based on strong revenue growth, vertical integration and direct-to-consumer sales. Vertical integration…

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