Tesla bear takes off gloves in letter scorning bull for waiting on robo-taxis
As Tesla Inc. shares continued to unravel amid unrestrained tweeting from CEO Elon Musk, the bull versus bear fight on the stock is heating up fast.
David Einhorn, the longtime Tesla critic who runs Greenlight Capital, mentioned Catherine Wood of ARK Investment Management in a quarterly letter on Friday.
He noted that Wood’s estimate that Tesla will eventually be worth US$4,000 a share is heavily dependent on the company’s ability to operate a massive fleet of robotaxis by 2023.
The only wrinkle in the theory — Tesla has not yet announced any concrete plan to enter the robotaxi business, even though Musk has hinted at it.
“The interesting thing about the analysis is that 84 per cent of the value came from the assumption that Tesla would be operating a platform of 3 million robo-taxis in 2023,” the letter said.
“As of today, Tesla hasn’t even announced a plan to enter the robo-taxi business, nor is it possible for the company to develop the manufacturing capability to make 3 million robo-taxis within five years.”
In the letter, Einhorn also drew parallels between Tesla and Lehman Brothers Holdings Inc., saying the electric-vehicle maker’s troubles resemble those of the bank’s before it failed.
Wood backed her views on Tesla, saying that the electricvehicle company is three years ahead of any auto manufacturer in the mobility-as-a-service space, “based on three metrics — its battery pack system cost per unit of performance, its new AI chip, and the amount of data it has collected (via its own consumers) that will power its autonomous vehicles,” she said in an emailed statement to Bloomberg.
“If anything, our conviction in Tesla’s positioning in the EV market and the autonomous taxi network market has increased significantly in the last few months, Elon’s tweets notwithstanding,” she said.
Wood is not alone in holding high hopes for the robo-taxi venture. Morgan Stanley analyst Adam Jonas last month said the carmaker’s ride sharing/robo-taxi business, Tesla Mobility, was worth about US$95 a share, or about US$17.7 billion. In 2015, he had predicted the service could be worth as much as US$244 a share.
At the time, he had a US$465 price target on Tesla, compared with his current target of US$291. Tesla dropped as much as 7.8 per cent on Friday in New York, netting short sellers in the stock more than US$500 million in paper profits, according to financial analytics firm S3 Partners. That adds to the US$941 million in profits for the shorts since Musk agreed to settle his lawsuit with the Securities and Exchange Commission last weekend.
Since then the shares have given back all of their settlement-related gains.