Billionaire financier David Einhorn, who has been harmed by his bet against Tesla Inc, stated on that the automaker is over-valued and that the business is not sufficiently capitalized.
“The company is expected to burn more than $2 billion this year as it begins production of its Model 3,” Einhorn stated on a revenues call for his reinsurance company Greenlight Capital Re. “It is presently only capitalized for the next 3 quarters,” he included.
Performance at Einhorn’s Greenlight Capital has been harmed by bets against high-flying stocks like Tesla, Amazon.com Inc and Athenahealth Inc which he regards his bubble basket stocks. But he is sticking to those short bets.
Tesla’s share price has risen 50 percent to $319.82 since January and Einhorn said the increase weighed on his fund’s performance from April to June.
Recently, Tesla’s share rate dropped after CEO Elon Musk cautioned that the company would deal with “manufacturing hell” as it increases production of its brand-new mass-market Model 3 sedan.
In July Einhorn’s Greenlight Capital carried out much better when a 2.1 percent gain helped clean away nearly all losses for the year. On the call Einhorn discussed only second-quarter performance. During those three months the fund lost 4 percent, leaving the firm with a 2.8 percent loss in the first half.
Greenlight Capital, like majority of hedge funds, is trailing the wider stock market Standard & Poor’s index 11.6 percent gain in the first 7 months of this year.
Einhorn likewise stated the fund lost money on its bets versus Amazon and Athenahealth. But he is not making changes, stating “I like the structure of the portfolio.”
His winners during the quarter consisted a bet on Bayer AG where he stated a prepared $66 billion takeover of U.S. agrochemicals group Monsanto would be boosting. Likewise a bet against oil expedition company Continental Resources Inc was a winner Einhorn stated.