David Einhorn Still Not-So-Patiently Waiting For Elon Musk’s Spell To Wear Off

It's been a whole week since he warned you, guys. What are you waiting for?

Last week, David Einhorn patiently explained to his investors—and, by extension, the Church of Elon—that Tesla’s soaring stock price made no sense, and that it would all end in tears, except for short-sellers and General Motors fans like himself, who would be richly vindicated. He didn’t know when it would happen, just like he didn’t know when, exactly, the dot-com bubble would blow 17 years ago. He just knew it had to happen eventually. All of the signs are there.


And apparently at some point within the ensuing eight days, because when David Einhorn awoke, drove his Honda Odyssey into work and discovered that the mists had still not cleared from the eyes of the loyal Muskovites, that his intervention had not yet broken the spell, that people were still not hearing what he had to say, he had no choice but to repeat it.

“For the time being, investors remain hypnotized by Tesla’s CEO,” Einhorn said Wednesday in a conference call discussing results at Greenlight Capital Re Ltd., the Cayman Islands-based insurer where he oversees investments. “We are skeptical that the company will be able to mass market its Model 3 at volumes and margins that justify the current valuation….”

“The enthusiasm for Tesla and other bubble-basket stocks is reminiscent of the March 2000 dot-com bubble,” Einhorn said. “As was the case then, the bulls rejected conventional valuation methods for a handful of stocks that seemingly could only go up. While we don’t know exactly when the bubble will pop, it eventually will.”

And when it does and you sell, consider sending some of that cash into the stock of GM, an automaker that actually makes money with something approaching regularity.

“GM trades at a significant discount to its intrinsic value despite the company’s strong operating performance,” Einhorn said Wednesday.

Einhorn Says Tesla Investors ‘Hypnotized’ in Dot-Com-Like Bubble [Bloomberg]


David Einhorn Said No To A Capital Raise, Kept The Door Open For A Pub Crawl

Remember how David Einhorn got in trouble in England for insider trading on Punch Taverns stock and he was all "what?" and we were all "what?"? Well, you can judge it for yourself because now the entire disputed call with Punch is available online (at the back of this). So go read it, or read the highlights here. The FSA still thinks it's insider trading, but the count of people confused by the whole thing is rising, and now includes the Merrill banker on the call. There's lots of insider traderiness on this side of the pond today too so we should talk about that in a bit. For now, though, two other things. One is quick - no one can resist one part of the call and I can't either so here it is: DAVID EINHORN: Hi, I’m sorry I didn’t get to see you when you were in New York. PUNCH CEO: No, no, we -- well, we’ve -- we’ve only had the chance to speak once, although we have seen [reference to Greenlight Analyst] a few times since then. DAVID EINHORN: Oh, you’re -- you’re -- you’re getting more than -- than I could help with anyway. So, this is good. PUNCH CEO: Okay. That’s fair enough. Well, one day we’ll get you around on a pub crawl around some English pubs. DAVID EINHORN: Oh, that sounds fun. PUNCH CEO: It is. You’re right. English readers: Is it? I just assumed that Punch Taverns are rather grim places, like TGI Friday's but with more ... punching? ... but maybe I'm totally off base here. Also, here is a hypothesis: vice investments do well because, for the same level of profitability, they get more analyst/investor coverage and enthusiasm. Wouldn't you rather go on a pub crawl instead of like a tour of an auto parts factory in Queens? Would that influence your stock recommendations / money allocations? Someone should do a study.