About two weeks ago, I wrote a post about a a former hedge fund manager, Whitney Tilson saying Tesla will be below $100 by the end of 2019.
Tilson said Tesla’s announcement last week that it is cutting the price of the Model 3, closing its brick-and-mortar stores and returning to earnings losses in the first quarter of 2019 is the beginning of the end.
“I think Musk has no more rabbits to pull out of his hat and therefore it’s all downhill from here,” Tilson wrote. “I predict that by the end of the year, the stock, today at $295, will be under $100.”
In the Markets there is usually are buyers and a sellers (and if not that’s where the Market Makers come into play). Another way of saying this is in the Markets there are bulls and bears. In the case of Tesla we will say Whitney Tilson is the bear. So let me introduce you to the Tesla bull, Ark Investment Management CEO Catherine Wood.
Catherine’s firm focuses disruptive technologies and thinks electric there will be millions and millions of cars on the road faster than people realize. So she is betting big on Elon and Tesla, Tesla is one of her fund’s largest holdings.
“If you look at the investment itself, what’s going to make Tesla move is a three-year lead in chip technology, battery technology, and data collection,” Wood continues. “And there’s also the concept that is going to get it catapulted into the world: mobility as a service, which many companies are just starting to think about.”
In February of 2018 she went on CNBC and said she believes Tesla could hit $4000 and that her bear case was $600. In recent weeks, she went back on CNBC and reiterated her targets for Tesla.
I believe Tesla isn’t a car company, but a technology company. However, what they are doing is very capital intensive. I also believe they are losing their first to market competitive advantage as other car makers enter the space. Catherine’s targets are pretty out there, but as long as Elon is associated with Tesla, I’m not going to bet against Tesla.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.