Whitney Tilson’s email to investors discussing if Musk panic-cutting expenses because Tesla Inc (NASDAQ:TSLA) is going to miss the quarter again; NTSB Report on death of Tesla driver using Autopilot raises troubling questions.
1) I was emailing back and forth with one of my readers about whether, as I believe (and offered a $10,000 bet on), Musk promised to have Level 5 autonomy by the end of this year and a million robotaxis by the middle of next year.
Get Our Activist Investing Case Study!
Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below!
Q1 hedge fund letters, conference, scoops etc
Contrary to Musk’s clear language, Sarah Huckabee Sanders (uh, I mean, my reader), argued that Musk didn’t really say these things and concluded his email:
I can understand why you’re not interested in actually understanding what Tesla is communicating and must spin every piece of information as negative. You’re invested (financially or not) in its failure. A shameful position if you ask me.
Here was my reply:
I have no financial position in anything I write about.
Save your “shameful” accusations.
I serve my readers and subscribers – and have saved them a TON of money since I made my call on March 4 (Friday was the beginning of the end for Tesla) when the stock was at $295.
You have clearly drunk the Musk Kool-Aid and, as such, twist or selectively quote his words to make it seem like he’s not raising billions of dollars on the back of wild, impossible promises when in fact that’s exactly what he’s doing.
He is the one behaving shamefully.
2) Tesla’s stock is in freefall, down nearly 8% today and 28% from my call on March 4, thanks to today’s double whammy of a) Musk’s desperation email which makes it clear (to all but the biggest Kool Aid drinkers) that sales are in the toilet and the company will soon face (another!) cash crunch, despite just raising over $2 billion; and b) the NTSB report, confirming that Tesla’s Autopilot drove a Tesla owner to his death, straight into a huge truck at 68 mph.
Hmmm, is it any wonder that I haven’t heard from the two people who said they’d take me up on my $10,000 bet re. autonomous Teslas, even when I was willing to give Musk an extra YEAR?!
Here’s Anton Wahlman’s spot-on take on both of these:
a) Is Musk Panic-Cutting Expenses Because Tesla Is Going To Miss The Quarter Again? Excerpt:
- Tesla’s CEO writes to its employees that “hard-core” measures must be taken to control cost. Why? The company has only 10 months of cash left, he wrote.
- It’s becoming very clear that the $2.2 billion cash balance as of March 31 was a highly window-dressed number.
- I’m showing the quarter-to-date sales numbers from two of Tesla’s best markets in Europe. The numbers are way behind what’s needed to make the quarter’s guidance.
- However, as with last quarter, there’s still hope for Tesla if it can deliver approximately 80% of its sales in the second half of the quarter.
- Barring such a huge increase in sales for the second half of the quarter, I estimate that Tesla will deliver 74,000 units for Q2 – a 22% shortfall vs the company’s guidance.
b) NTSB Report on Death of Tesla Driver Using Autopilot Raises Troubling Questions. Excerpt:
The National Transportation Safety Board (NTSB) has issued a preliminary report regarding a Tesla (TSLA) Autopilot fatality that took place in Florida on March 1, 2019. This report raises multiple troubling questions for Tesla, including speculating on the different kinds of liability Tesla may have.
The report is only two pages long, so I encourage every reader to go to the original source, linked to above. In summary, the Tesla was traveling on a 55 MPH speed limit road while on Autopilot — but going 68 MPH. A large truck was crossing the road, and for whatever reason the Tesla did not stop.
As a result, Tesla hit the truck, slicing the roof off the car, and the person in the Tesla died. The remains of the car were found 1,600 feet away, where it had come to a stop.
Message to investors in Tesla’s latest funding round: Take a good look at this picture. Elon sold you $2.7 billion of securities based on lies about Tesla’s autonomy capabilities. This picture is the reality. Tesla’s cars can’t even see the broadside of a tractor trailer. $TSLA pic.twitter.com/1EoPNLrvoo
— NetflixAndLamp (@NetflixAndLamp) May 16, 2019