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David Einhorn is Still Shorting Tesla Despite its Record Quarter
Despite reporting a record profit in the third quarter – and flipping one famous short-seller even before posting that surprising performance – Elon Musk and Tesla have still not won over another well-known short-seller: Greenlight Capital’s David Einhorn, who believes the carmaker has essentially peaked with its record-setting quarter, as Bloomberg reports.
“We believe this will be as good as it gets for the company,” Einhorn said in a Greenlight earnings call on Tuesday, according to Bloomberg. “We believe they’ve exhausted most of the demand from customers who can afford the highest-priced versions of the Model 3.”
Tesla posted a 3Q profit of roughly $312 million, which is about $1.75 a share, “beating the average estimate for a loss of 99 cents by analysts surveyed by FactSet,” as the Wall Street Journal noted. In the year-ago quarter, the Journal also pointed out, Tesla suffered a a loss of $619.4 million, or about $3.70 a share.
The company said that its Model 3 vehicle “was the best-selling car in the US in terms of revenue and the 5th best-selling car in terms of volume.” Its weekly Model 3 production through 3Q (excluding planned shutdowns) averaged about 4,300 units per week.
“Model 3 is attracting customers of both premium and non-premium brands, making it a truly mainstream product,” the company said in a statement announcing its quarterly results.
Prominent short-seller Andrew Left – who has sued Elon Musk and his car company for alleged “price manipulation” after Musk notoriously tweeted his desire to take Tesla private – had a stunning change of heart and announced that he and his firm Citron Research are now long on the carmaker, declaring that “Tesla is destroying the competition.”
Left added that Tesla’s “Model 3 is a proven hit” with car buyers.
“The most challenging part of being a short seller is to constantly check your thesis to make sure nothing has changed,” Left wrote in a blog post. “You must let all predispositions and prejudices disappear and stay focused on only the facts.”
However, “the facts” leave Einhorn unmoved, as Bloomberg notes.
“Tesla is contending with a litany of competitive, regulatory, human-resources, vehicle-quality and capital-structure issues,” he said in the earnings call.