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While the shares of Tesla Inc. (TSLA) have slipped on the latest news about its CEO and founder, Elon Musk, a short seller is pleading for the title to drop to a single-digit value. In an interview with CNBC, short-seller Robert Chapman said that while Musk's behavior is a problem for the electric vehicle manufacturer at the business level, Tesla's fundamentals are what motivates his bearish stance.
Tesla shorts on inflated evaluation, not Musk's judgment
Last week, Tesla announced that senior executives resigned after Musk appeared on the Joe Rogan Experience podcast, discussing topics such as electric planes, marijuana and whiskey. The short seller called Joe Rogan's recent development of "non-development" and "perpetuation of what we already know about Elon Musk".
(See also: A bad week for Tesla has just gotten worse.)
Despite the tragedy surrounding Musk, Chapman is more concerned about the valuation of Tesla, considering it highly inflated compared to companies like Ford Motor Co. (F).
"Actually, I do not think you should shorten it [Musk’s] judgment. I think he's a fascinating businessman, probably the most incredible entrepreneur since Edison …. I think selling it short is a mistake, "said the seller. I think the short sale of a $ 50 billion automaker is struggling to create a profitable and sustainable business model. . "
Chapman is among the bears worried about Tesla's cash consumption and its inability to make a profit. Although Musk says Tesla will be profitable by the end of 2018, the company has spent about $ 1.8 billion in cash after capital investments in the first two quarters of 2018. Tesla was about 2, $ 2 billion in cash at the end of the NBCC.
Down 6.3% Friday at $ 263.24, the Tesla stock has posted a 15.5% loss since the beginning of the year (compared to the S & P 500's 7.4% return over the same period). period). Shares of automaker based in Palo Alto, Calif., Rose 3.4% on pre-market Monday, according to an optimistic report by Baird analysts citing the company's long-term competitive advantage after a tour of his Gigafactory.
(See also: Tesla will reach the goal of Model 3 and purchase the third quarter results: Oppenheimer.)
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