BOSTON (Reuters) - Billionaire hedge fund manager David Einhorn told investors on Tuesday that a sharp rally in Tesla Inc shares, which he bet against, turned into heavy second-quarter losses at his Greenlight Capital fund, and stuck by his dim outlook for the electric carmaker.
David Einhorn, President of Greenlight Capital, Inc., presents during the 2018 Sohn Investment Conference in New York City, U.S., April 23, 2018. REUTERS/Brendan McDermid
Greenlight lost 18.3 percent in the first six months of 2018, Einhorn wrote in a letter to investors seen by Reuters. Tesla shares, which rose 29 percent in the last quarter, was the fund’s “second biggest loser” during that period, he added.
Hours after sending the letter, Einhorn notified investors that the fund’s returns fell again in July. After a dip of 0.4 percent this month, the fund is down 18.6 percent for the year, an investor told Reuters.
Tesla’s Model S residual values are falling, Einhorn wrote, noting he has been frustrated by power windows and touch screen problems in his own Model S sedan and got rid of the vehicle as his lease ended.
The company’s more affordable Model 3 got modest reviews and bad publicity, which Einhorn said was “probably having a negative impact on the brand.” He said he doubted the car could be “produced profitably anytime soon, if ever” and criticized the company’s plan to rush cars to customers.
He called Tesla Chief Executive Elon Musk “erratic and desperate,” after Musk said an analyst asked a “boring boneheaded question” during the company’s last quarterly earnings call.
"Tragic," Elon Musk tweeted bit.ly/2n2vveR as he responded to Einhorn's comments.
“Will send Einhorn a box of short shorts to comfort him through this difficult time,” Musk tweeted early Wednesday.
