Greenlight Results “Far Worse” Than We Imagined, Says Einhorn

Billionaire hedge fund manager David Einhorn informed 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 automaker.

Greenlight lost 18.3 percent in the first six months of this year, Einhorn wrote in a letter to investors. Tesla shares, which increased 29 percent in the last quarter, was the fund’s “second biggest loser” during that time, he added.

Hours after sending the letter, Einhorn informed investors that the fund’s returns dropped again in July. After a dip of 0.4 percent this month, the fund dropped 18.6 percent for the year, an investor informed Reuters.

Tesla’s Model S residual values are dropping, Einhorn wrote.

The company’s more budget-friendly Model 3 got modest reviews and bad publicity, which Einhorn stated was “probably having a negative impact on the brand.” He said he doubted the vehicle could be “produced profitably anytime soon, if ever” and criticized the company’s strategy to rush cars to consumers.

Einhorn said the fund’s returns over the last three years have been “far worse than we could have imagined.” He further added several investors have run out of patience and asked for their money back. A filing from the end of March indicated Greenlight had assets of approximately $4 billion.

He referred Tesla Chief Executive Elon Musk as “erratic and desperate,” after Musk stated an analyst asked a “boring boneheaded question” during the company’s last quarterly earnings call.