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.
Joe Cecela, Dream Exchange CEO, explains how they are aiming to form the first minority-controlled company to operate an exchange in U.S. history. Watch!
A Michigan judge is putting sponges in the hands of shoplifters and ordering them to wash cars in a Walmart parking lot when spring weather arrives. Genesee County Judge Jeffrey Clothier hopes the unusual form of community service discourages people from stealing from Walmart. The judge also wants to reward shoppers with free car washes. Clothier says he began ordering “Walmart wash” sentences this week for shoplifting at the store in Grand Blanc Township. He believes 75 to 100 people eventually will be ordered to wash cars this spring. Clothier says he will be washing cars alongside them when the time comes.
The State Department had been in talks with Elon Musk’s Tesla company to buy armored electric vehicles, but the plans have been put on hold by the Trump administration after reports emerged about a potential $400 million purchase. A State Department spokesperson said the electric car company owned by Musk was the only one that expressed interest back in May 2024. The deal with Tesla was only in its planning phases but it was forecast to be the largest contract of the year. It shows how some of his wealth has come and was still expected to come from taxpayers.
At 100 years old, the Goodyear Blimp is an ageless star in the sky. The 246-foot-long airship will be in the background of the Daytona 500 — flying roughly 1,500 feet above Daytona International Speedway, actually — to celebrate its greatest anniversary tour. Even though remote camera technologies are improving regularly and changing the landscape of aerial footage, the blimp continues to carve out a niche. At Daytona, with the usual 40-car field racing around a 2½-mile superspeedway, views from the blimp aptly provide the scope of the event.
You'll just have to wait for interest rates (and prices) to go down. Plus, this deal's a steel, the big carmaker wedding is off, and bribery is back, baby!
