Hedge fund manager and noted Tesla bear Crispin Odey, in the wake of Tesla’s nearly 10% crash on Friday, talked in his most recent investor letter about how difficult it was to be short the name. He also made the revelation that he believes that the company is “entering the final stages of its life”.
Odey, like many shorts, has ridden out the seemingly never-ending bullishness in Tesla stock as, despite failed promises and erratic behavior from CEO Elon Musk over the last couple of years, the equity has done very little but move higher since it has been a public company.
Odey also compared Musk’s behavior to Donald Crowhurst, “the amateur sailor who set off in the 1960s on a solo voyage around the world and never came back,” according to a Bloomberg article.
Tesla shares were pummeled on Friday, dropping almost 10% after Thursday night’s New York Times piece, in which Musk tearfully broke down and admitted not only that no one had reviewed his going private Tweet before he put it out whilst driving, but also that he would voluntarily resign the position of CEO to somebody who could do it better.
“…if you have anyone who can do a better job, please let me know,” he told the New York Times. “They can have the job. Is there someone who can do the job better? They can have the reins right now.”
Also in Musk’s interview with the New York Times, published Thursday evening, he again couldn’t help himself and had to take a shot at short-sellers like Odey.
Musk said he was bracing for “at least a few months of extreme torture from the short-sellers, who are desperately pushing a narrative that will possibly result in Tesla’s destruction.”
Referring to short-sellers, he added:
“They’re not dumb guys, but they’re not supersmart. They’re O.K. They’re smartish.”
It’s not just short sellers that Musk thinks are “not supersmart” – he reserves that designation for virtually anyone, especially if they happen to disagree with him: in recent months, in addition to wrangling with short-sellers and sending David Einhorn “short shorts”, Musk has belittled analysts for asking “boring, bonehead” questions.
The Bloomberg article noted that Tesla is Odey European Inc’s second biggest equity short position.
“The path this fund has taken to reach this place was so painful, but now I would not swap this portfolio for anyone else’s,” Odey wrote in the letter. “It is a pity you daren’t give it a try.”
Perhaps over the coming weeks, we will truly see who is smart and who is “smartish”.