“Tesla is undoubtedly on the verge of bankruptcy”, Chief Investment Officer of Vilas Capital Management John Inn Thompson said. Even when Tesla’s investors approved the largest compensation plan for its CEO Elon Musk, the company incurred almost USD 5 billion of losses, Finance.ua reports quoting The Fortune.
According to the new strategy, Elon Musk should work for Tesla until 2028. In addition, it is supposed that in case of achieving the financial targets, the company will pay him up to 50 bln dollars thanks to the share sale. Thus, Tesla’s market value, which is 53 bln dollars today, should increase to 650 bln dollars, in order Musk could use all advantages of the compensation package.
In spite of such shareholders’ decision, which confirms their trust in Musk and his vision of the company’s future, Vilas Capital bets against Tesla. Thompson is confident that in three-six months, Tesla will face the issues, associated with Model 3 and declining demand for Model S and X.
For quite long, Musk has been using the strategy, based on the growth of financing through attracting a large amount of capital. According to Thompson’s estimates, he will need about 8 billion dollars within next 18 months in order to save Tesla.
The Musk’s new compensation package encourages company’s expansion and increasing Tesla’s market value, but does not focus attention on the profitability.
“Yes, Tesla costs twice more than Ford, but last year, Ford sold 6 million cars, totaling USD 7.6 bln, while Tesla – 100,000 cars with the loss, amounting to USD 2 bln. During my career, I have never seen anything more absurd”, Thompson stated.
