NEW YORK (Reuters) – David Einhorn, the hedge fund manager known for his prescient call about Lehman Brothers’ accounting troubles, lambasted Tesla Inc (TSLA.O) and Elon Musk on Friday, saying the carmaker’s woes resemble those of the global financial services firm before its collapse.
FILE PHOTO: David Einhorn, President of Greenlight Capital, Inc., presents during the 2018 Sohn Investment Conference in New York City, U.S., April 23, 2018. REUTERS/Brendan McDermid
“Like Lehman, we think the deception is about to catch up to TSLA,” Greenlight Capital, which has been selling Tesla shares short, said in a quarterly letter seen by Reuters.
“Elon Musk’s erratic behavior suggests that he sees it the same way,” the letter added, referring to Tesla’s combative chief executive after he took another shot at short sellers in the electric carmaker on Thursday.
Tesla shares were down 7 percent at $262 on Friday.
Einhorn pointed to parallels by saying “Lehman threatened short sellers, refused to raise capital (it even bought back stock), and management publicly suggested it would go private” in the months leading up to the bank’s collapse.
“Months later, shareholders, creditors, employees and the global economy paid a big price when management’s reckless behavior led to bankruptcy,” Eihorn said.
Einhorn said in the letter his short position on Tesla was his second biggest winner in the third quarter. Greenlight’s main fund has lost 26 percent this year.
Tesla could not be reached for immediate comment.
Einhorn’s Greenlight sold its remaining shares of Apple Inc (AAPL.O) on growing fear of “Chinese retaliation against America’s trade policies”, according to the letter.
Einhorn in August slashed his bet on Apple by 77 percent to 142,100 shares. The firm sold the remaining Apple stock on Aug. 31 at $228 per share. Apple did not immediately respond to a request for comment.
Apple’s shares were down 2 percent at $223.43 on Friday.
Reporting by Jennifer Ablan; Editing by Tom Brown