Noted Tesla bear says Musk’s EV maker could ‘go bust’ and stock is worth $14
Elon Musk, CEO of Tesla, speaks at the Atreju political convention organized by Fratelli d’Italia (Brothers of Italy), in Rome, Italy, on Dec. 15, 2023.
Antonio Masiello | Getty Images
Tesla could “go bust” while its stock could fall to $14, Per Lekander, a hedge fund manager who has been shorting Elon Musk‘s electric car maker since 2020, told CNBC on Wednesday.
His comments come after Tesla reported 386,810 vehicle deliveries in the first quarter of the year, significantly below even the lowest market estimates.
“This was really the beginning of the end of the Tesla bubble, which probably, arguably was the biggest stock market bubble in modern history,” Lekander, managing partner at investment management firm Clean Energy Transition, said on “Squawk Box Europe.”
“I actually think the company could go bust.”
Tesla was not immediately available for comment when contacted by CNBC.
Lekander was a former portfolio manager at investment firm Lansdowne Partners who successfully called a 2018 rally in carbon prices. Since 2020, Clean Energy Transition has been short Tesla’s stock, meaning Lekander’s firm will profit if the automaker’s shares fall.
In a March 2021 interview with CNBC, Lekander called for Tesla’s stock to go down. At the time of the interview, Tesla’s shares closed at $233.94. On Tuesday, the stock closed at $166.63. But Lekander also called for a comeback of the traditional automakers, singling out Volkswagen. Shares of Volkswagen have fallen around 53% since that call, though they rallied at the start of this year.
Lekander has taken his bearish Tesla call further, suggesting the stock could fall to $14 per share. He said his call is based on an estimate that the company’s full-year earnings per share this year would be $1.40. Lekander contends that Tesla is a “no growth” stock and should be valued on 10 times forward earnings, versus around 58 times forward earnings currently. Forward earnings are an important metric used by traders to gauge the value of a stock.
If Tesla’s stock hit $14, that would represent around 91% downside from Tuesday’s close. Tesla’s shares have already fallen more than 30% this year.
“I think however Tesla cannot be at $14. If it falls under a certain level because of everything that’s been going on, it’s going to go bust.”
Lekander gave a number of reasons for his negative outlook. He said Tesla’s business model has been based on strong revenue growth, vertical integration and direct-to-consumer sales. Vertical integration broadly refers to when one company internally handles many parts of a process from the manufacturing of the car to the software. This model is “brilliant” when a company grows, but goes in “reverse” when sales fall, Lekander said.
The hedge fund boss said Tesla’s first-quarter problems were not to do with some of the reasons the company cited such as supply chain disruption. Instead, it is a “demand problem,” according to Lekander, who said two cars — the Model 3 and Model Y — make up the bulk of the U.S. automaker’s sales. And the company does not see another new vehicle being released until 2025.
“I don’t see any reason whatsoever to see any recovery over the next two years given that these models are stale and given the economy is not rocketing,” Lekander said.
Tesla said in its statement Tuesday it had faced numerous challenges during the quarter.
Negative Tesla voices growing
Lekander is among a chorus of negative voices on Tesla after disappointing delivery numbers.
“While the long-term proposition of electrical vehicles remains unchanged, the realities of delivering on that proposition are really starting to tell as Tesla (and the others) have run out of well-heeled consumers willing to pay big money to be beta testers,” Richard Windsor, founder of Radio Free Mobile, said in a research note Wednesday.
Windsor questioned Tesla’s roughly $500 billion valuation calling it “ludicrous” at a time when the company is facing rising competition.
“There is still plenty of downside in Tesla’s shares,” Windsor said.
Dan Ives, a noted Tesla bull at Wedbush Securities, who has a $300 price target on the electric vehicle maker, has become concerned.
“Let’s call this as it is: While we were anticipating a bad 1Q, this was an unmitigated disaster 1Q that is hard to explain away. We view this as a seminal moment in the Tesla story for Musk to either turn this around and reverse the black eye 1Q performance,” Ives said in a note Tuesday.
“Otherwise, some darker days could clearly be ahead that could disrupt the long-term Tesla narrative,” he added.
Analysts at HSBC and TD Cowen cut their price targets on Tesla’s stock on Wednesday.
Cathie Wood buys Tesla stock
Tesla is arguably one of the most divisive stocks on Wall Street and there are many that are still bullish on the company.
Cathie Wood’s Ark Invest bought Tesla stock for some of its funds this week ahead of the first-quarter delivery numbers in a sign of support.
Meanwhile, some analysts are talking up the longer-term potential of Tesla.
Tom Narayan, analyst at RBC Capital Markets, told CNBC’s “Squawk Box Asia” on Wednesday that most of the reasons behind the fall in first-quarter deliveries were “one-time in nature.”
But he said one near-term catalyst could be a recent directive from Tesla’s CEO to employees to install and show customers how to use the latest version of the company’s driver assist system, marketed as FSD or Full Self-Driving. Tesla also launched a free trial of the service for compatible cars which usually costs $199 per month.
“Maybe that gets people in the showrooms, maybe it gets people to subscribe to it, maybe it gets people to buy cars. So there is that near-term catalyst,” Narayan said.
The RBC analyst, who has an outperform rating on Tesla’s stock with a $298 price target, said his valuation is based on Tesla’s energy storage business, which is a “huge opportunity” for the company. And he added that “autonomy” is also a big part of his rating on Tesla.
“If FSD works, now it’s [Tesla] a software business with a software multiples,” Narayan said. Tesla’s FSD system does not make a car autonomous. It still requires a driver to take control of the car.
Technology
OpenAI investor Reid Hoffman spars with AI czar Sacks, calls Anthropic ‘one of the good guys’
Reid Hoffman, Partner at Greylock and co-founder LinkedIn, speaks during the WSJ Tech Live conference hosted by the Wall Street Journal at the Montage Laguna Beach in Laguna Beach, California, on October 21, 2024.
Frederic J. Brown | Afp | Getty Images
Two of the main members of the PayPal mafia are sparring again — this time over artificial intelligence.
Billionaire tech investor and LinkedIn co-founder Reid Hoffman on Monday called Anthropic “one of the good guys” after the AI startup was criticized last week by David Sacks, the venture capitalist serving as President Donald Trump’s AI and crypto czar.
“Anthropic, along with some others (incl Microsoft, Google, and OpenAI) are trying to deploy AI the right way, thoughtfully, safely, and enormously beneficial for society,” Hoffman wrote on X. “That’s why I am intensely rooting for their success.”
Hoffman has served on Microsoft’s board since 2017, shortly after selling LinkedIn to the software giant. Microsoft is a key OpenAI investor and partner. Hoffman was also an early investor in OpenAI, Anthropic’s larger rival, and remains a shareholder. He revealed on Monday that Greylock, where he’s a partner, has invested in Anthropic.
Greylock and Anthropic didn’t respond to requests for comment.
In a series of posts, Hoffman said he tries to avoid commenting directly about companies like OpenAI and Anthropic, but that “in all industries, especially in AI, it’s important to back the good guys.”
Hoffman and Sacks were both early employees at PayPal, joining in 1999 and assuming major roles at the payments company. Along with Peter Thiel, Elon Musk, Max Levchin and a group of other high-profile techies, they were part of what became known as the PayPal mafia because of the number of successful companies they went on to build.
But Hoffman and Sacks have been public antagonists recently, due mostly to their political differences. Hoffman is a major Democratic donor, contributing millions of dollars to Kamala Harris’ unsuccessful presidential bid.
Sacks emerged as a vocal Trump supporter ahead of the 2024 election before joining the administration. He hosted a fundraiser for Trump at his San Francisco mansion.
Politics of AI
AI has become an intensely political issue, mostly due to disagreements about safety issues and how it should be regulated.
Anthropic was founded in 2021 by a group of former OpenAI executives and researchers who left the company over concerns about safety. Jack Clark, one of the startup’s co-founders and its current head of policy, added fuel to the debate about regulation last week, publishing an essay called “Technological Optimism and Appropriate Fear.”
David Sacks, U.S. President Donald Trump’s “AI and Crypto Czar”, speaks to President Trump as he signs a series of executive orders in the Oval Office of the White House on Jan. 23, 2025 in Washington, DC.
Anna Moneymaker | Getty Images
Sacks criticized the essay and, in a post on X, accused Anthropic of “running a sophisticated regulatory capture strategy based on fear-mongering.” He said the company is “principally responsible for the state regulatory frenzy that is damaging the startup ecosystem.”
Anthropic has repeatedly pushed back against efforts by the federal government to hinder state-level regulation of AI, including a Trump-backed provision that would have blocked those rules for 10 years.
After Hoffman shared his thoughts about Anthropic on Monday, Sacks and Musk, who owns a competing AI company called xAI and was also a major early figure in the second Trump administration, were quick to respond.
“The leading funder of lawfare and dirty tricks against President Trump wants you to know that ‘Anthropic is one of the good guys,'” Sacks wrote in response to Hoffman on Monday. “Thanks for clarifying that. All we needed to know.”
“Indeed,” Musk said in a reply.
The chirping went back and forth on Monday.
“Shows you didn’t read the post (not shocked),” Hoffman wrote. “When you are ready to have a professional conversation about AI’s impact on America, I’m here to chat.”
Jason Calacanis, who co-hosts the All-In podcast, along with Sacks and two other tech friends, wrote in response to Hoffman that he should “come on the pod,” inviting him this week. Hoffman previously joined for an episode at the end of August, roughly two months before the presidential election.
Hoffman wrote that he is “open to coming back on” but that “this week is packed.”
— CNBC’s MacKenzie Sigalos contributed to this report
WATCH: Anthropic’s Mike Krieger on new model release and the race to build real-world AI agents
Mike Windle/Getty Images
OpenAI announced on Monday in a joint statement that it will be working with Bryan Cranston, SAG-AFTRA, and other actor unions to protect against deepfakes on its artificial intelligence video creation app Sora.
The “Breaking Bad” and “Malcolm in the Middle” actor expressed concern after unauthorized AI-generated clips using his voice and likeness appeared on the app following the Sora 2 launch at the end of September, the Screen Actors Guild-American Federation of Television and Radio Artists said in a post on X.
“I am grateful to OpenAI for its policy and for improving its guardrails, and hope that they and all of the companies involved in this work, respect our personal and professional right to manage replication of our voice and likeness,” Cranston said in a statement.
Along with SAG-AFTRA, OpenAI said it will collaborate with United Talent Agency, which represents Cranston, the Association of Talent Agents and Creative Artists Agency to strengthen guardrails around unapproved AI generations.
The CAA and UTA previously slammed OpenAI for its usage of copyrighted materials, calling Sora a risk to their clients and intellectual property.
OpenAI had to block videos of Martin Luther King Jr. on Sora last week at the request of King’s estate after users created “disrespectful depictions” of the civil rights leader.
Zelda Williams, the daughter for late comedian Robin Williams, asked people to stop sending her AI-generated videos of her father shortly after the Sora 2 release.
OpenAI’s approach to copyright restrictions and other issues related to likeness have evolved since the Sora 2 launch Sept. 30.
On Oct. 3, CEO Sam Altman updated Sora’s opt-out policy, which previously allowed the use of IP unless studios specifically requested that their material not be used, to allow rightsholders “more granular control over generation of characters.”
At launch, Sora required an opt-in for the use of an individual’s voice and likeness, though OpenAI said that it is now also committing to “responding expeditiously to any complaints it may receive.”
The company reiterated its support of the NO FAKES Act, a federal bill passed designed to protect against unauthorized AI-generated replicas of people’s voice or visual likeness.
“OpenAI is deeply committed to protecting performers from the misappropriation of their voice and likeness,” Altman said in a statement. “We were an early supporter of the NO FAKES Act when it was introduced last year, and will always stand behind the rights of performers.”
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