"Tespondent" Musla looks like Lehman, says Einhorn of Greenlight

NEW YORK (Reuters) – Hedge fund manager David Einhorn has criticized Tesla Inc. (TSLA.O) and his president "shot down" Elon Musk on Friday, comparing the electric car company to Lehman Brothers Holdings Inc., where he had reported accounting problems several months before his collapse in 2008.

"Just like Lehman, we believe that deception is about to catch up with TSLA," said Greenlight Capital, an Einhorn Group company, which sold short Tesla shares, in a quarterly investor letter obtained from Reuters. "The erratic behavior of Elon Musk suggests that he sees it in the same way."

Greenlight's letter came one day after Musk, a long-time short sellers critic, appeared to have provoked the US Securities and Exchange Commission into a "shortseller enrichment commission". on Twitter.

That was just five days after Musk had settled the fraud charges with the SEC, in an agreement that allowed him to remain Tesla's chief executive but demanded that he step down as president. A judge has not yet approved the settlement.

Tesla did not immediately respond to requests for comment. His shares were down 7% to $ 262.05 at the end of the day.

Greenlight had a difficult year with a core fund down 25.7% up in September, but said its short position on Tesla was its second-biggest winner in the third quarter.

In a presentation made to investors in May 2008, four months before the Lehman bankruptcy, Einhorn had questioned the investment bank's accounting, including for real estate, and had indicated that it needed to mobilize investments. significant capital.

Einhorn said Tesla had "many parallels" with Lehman, who "threatened the short sellers, refused to raise capital (she even bought back shares), and the management publicly suggested that she would pass to the private sector ".

"A few months later, shareholders, creditors, employees and the global economy paid a heavy price when management's reckless behavior led to bankruptcy," said Einhorn.

He added that Musk's main problem was that Tesla would lose too much money by selling his model 3 at a starting price of $ 35,000, without "resolving" to cancel the program and repay customer deposits. .

"His conduct suggests that he is doing his best to be relieved of his CEO position to avoid any liability," Einhorn said.

Musk, on the other hand, used Twitter to make fun of Einhorn, saying that on August 1 he would "send Einhorn a box of shorts to comfort him during this difficult time".

Greenlight said it also sold its latest Apple Inc (AAPL.O) in August at $ 228 per share, eight years after the iPhone manufacturer's purchase to less than a sixth of that price, for fear of "China's retaliation against America's trade policy."

Apple did not immediately respond to a request for comment. His shares were down 1.4% to 224.71 dollars on Friday night.