Andrew Left accepts my Tesla wager & offers $100,000+; more on Tesla; China’s economy overstated; Brexit; black man outsmarted neo-Nazis

By Whitney Tilson

Monday, March 11, 2019

1. So far 11 folks have taken me up on my friendly wager to benefit charity from Friday’s email regarding whether Tesla would report a profitable quarter this year. (If you would like to join them, click here.)

10 bet a total of $3,000 and my friend and famed short seller, Andrew Left, took the remaining $7,000 of the $10,000 I’m willing to wager.

    Andrew is bullish on the company’s prospects and tells me that he is currently long the stock, for reasons he outlined in this report last Friday, Citron Expects Tesla Rebound to $320, as well as this one from last October: Citron Reverses Opinion on Tesla.

    Andrew is so confident, in fact, that he’s willing to wager another $100,000, so if any Tesla bear wants to take him up on all or part of this, please let me know and I’ll arrange it.

    Let’s have some fun and raise money for charity!

    2. I am more confident than ever that in less than a year $10,000 will be going to my favorite charity, KIPP NY charter schools, as the wheels are rapidly falling off Tesla (pun intended!). The biggest news over the weekend was that perhaps the most bullish analyst on Tesla, Trip Chowdhry of Global Equities Research, did some excellent on-the-ground research, visiting stores etc., and issued a shockingly bearish report in which he slashed his Q1 unit sales estimate by nearly half from 93,500 cars to 48,000. Here are the highlights:

    • KEY MESSAGE: Model 3 Production & International Shipments Gushing… However, US Demand Weak, Price Reduction is not stimulating US Demand – Reducing Estimates
    • TSLA 1Q’2019 delivery numbers could be very bad. Significantly lower than 4Q’2018 numbers
    • Reducing Model 3 Deliveries estimates to 30,000 units, down from previous estimates of 60,000 Units
    • Reducing Model S/X Deliveries estimates to 18,000 units, down from previous estimates of 23,500 Units
    • Price Reduction is not stimulating US Demand; Brand Dilution at risk; customers may be viewing lower priced Model 3s to be dummified/stripped version of Model 3
    • Activity levels at US Delivery hubs and (Stores+Service Center) is Frozen, pretty much Dead

    3. More Tesla news:

    • Perseid Capital just posted its Tesla Short Thesis. I’m not familiar with the firm, but this is a solid piece of analysis.
    • INSIDEEVs has a web site that tracks U.S. sales by month for all plug-in EV cars, and it reveals that Tesla’s sales are far below guidance – and falling…

    Again, I repeat the question: how is any of this consistent with a company priced for perfection, with a $61 billion enterprise value?!?!

    4. “I can’t believe that China is reporting phony economic numbers,” said nobody, ever: China’s economy is 12% smaller than official data say, study finds. Excerpt:

    China’s economy is about 12 per cent smaller than official figures indicate, and its real growth has been overstated by about 2 percentage points annually in recent years, according to research.

    The findings in the paper published on Thursday by the Brookings Institution, a Washington think-tank, reinforced longstanding scepticism about Chinese official statistics.

    They also add to concerns that China’s slowdown is more severe than the government has acknowledged. Even based on official data, China’s economy grew at its slowest pace since 1990 last year at 6.6 per cent.

    5. Another late-night comic, Samantha Bee, has joined John Oliver in doing an informative segment that slams Brexit: A Brief History of Brexit for Americans

    6. The wildest, best story of the year! How a black man says he ‘outsmarted’ a neo-Nazi group and became their new leader. Excerpt:

    Without notifying his followers or even his inner circle, the longtime president of a legacy neo-Nazi group has signed over its control to a black civil rights activist from California.

    James Hart Stern, a 54-year-old with a history of infiltrating white supremacist groups, is the new leader of the National Socialist Movement. And his first move as president was to address a pending lawsuit against the neo-Nazi group by asking a Virginia judge to find it guilty of conspiring to commit violence at the deadly Unite the Right rally in Charlottesville in 2017.

    Next, he plans to transform the hate group’s website into a space for Holocaust history lessons.

    “I did the hard and dangerous part,” Stern told The Washington Post in his first interview since taking over the National Socialist Movement. “As a black man, I took over a neo-Nazi group and outsmarted them.”

    For weeks, the sudden change in power had confounded those who study hate groups and perplexed those within the organization, who had heard nothing from the man who led the Detroit-based hate group for 24 years, former NSM president Jeff Schoep.

    Whitney Tilson
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    About Whitney Tilson

    Prior to creating Empire Financial Research, Whitney Tilson founded and ran Kase Capital Management, which managed three value-oriented hedge funds and two mutual funds. Starting out of his bedroom with only $1 million, Tilson grew assets under management to more than $200 million.

    Tilson graduated magna cum laude from Harvard College with a bachelor’s degree in government in 1989. After college, he helped Wendy Kopp launch Teach for America and then spent two years as a consultant at the Boston Consulting Group. He earned his MBA from Harvard Business School in 1994, where he graduated in the top 5% of his class and was named a Baker Scholar.

    Click here for the full bio.