When Tesla reports its second-quarter delivery numbers this week, investors will be looking to see if Elon Musk was able to recover from those dismal Q1 numbers, when the company delivered just 63,000 vehicles to customers. Musk told employees last week that they needed to "go all out" in order to hit the 90,000 to 100,000 delivery benchmark that Musk has forecast.
But for Tesla ($TSLA) shorts like Gabe Hoffman, whether or not Tesla hits its guidance obscures the larger structural problems with the company.
"The truth is, it doesn't really matter" how many cars Tesla delivered last quarter, Hoffman told Cheddar, because the carmaker had to slash prices to goose demand as the federal tax credit for electric cars goes away (it dropped to $1,875 as of Monday).
"People have been looking to this number as the last piece of news that's not horrible," Hoffman said. He is general partner at the hedge fund Accipiter Capital Management, which has had Tesla as its largest short position all year. That position has paid off ー the stock has lost about a third of its value in the first half of 2019 even when factoring in a 20 percent climb in June.
Tesla shorts like Hoffman believe the stock is fundamentally flawed as Musk faces down the barrel of increasing competition from legacy luxury automakers like Audi and BMW, which benefit from scale and supply chain strengths that Tesla, as a relatively young company, has not yet mastered.
"Any company that sits under a mountain of debt ー any company that loses billions and billions of dollars a year ー I simply don't see any future for the stock long term," Hoffman said. "I do believe it will be very nearly worthless."
The fundamental problem is demand, according to Hoffman. Domestic demand "isn't there" and Musk's bet that he can make up for it in China ー Tesla is working furiously to complete a Shanghai Gigafactory ー is misguided, he said.
Adding to that, the company is grappling with quality issues like paint fading, a revolving door of high-level executive departures, and a sense among some Tesla owners that the service arm is understaffed, With that at the forefront, Hoffman predicts Tesla shares are likely to continue to struggle in the back half of the year, even if Q2 deliveries hit their mark.
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A rare magnum of Dom Pérignon Vintage 1961 champagne that was specially produced for the 1981 wedding of Prince Charles and Lady Diana has failed to sell during an auction. Danish auction house Bruun Rasmussen handled the bidding Thursday. The auction's house website lists the bottle as not sold. It was expected to fetch up to around $93,000. It is one of 12 bottles made to celebrate the royal wedding. Little was revealed about the seller. The auction house says the bids did not receive the desired minimum price.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
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