Tesla will fall 70% after robotaxi and AI ambitions stop protecting a failing business, says ‘Big Short’ investor

A Tesla car charging at a Tesla Supercharger. Justin Sullivan via Getty Images

• “Big Short” investor Danny Moses is still betting against Tesla shares and expects them to fall to $50.

• Tesla’s focus on robotaxis and AI is a distraction from its “collapsing” core business, he told CNBC.

• In addition to the faulty fundamentals, Moses also noted that the company is facing a DOJ investigation.

Tesla stocks are headed toward a sharp correction and will suffer a decline that even new technology initiatives will not be able to avoid, says investor Danny Moses CNBC.

“The Big Short” trader and longtime Tesla bear isn’t backing down from his bet against the electric vehicle maker, and he still predicts Tesla shares will eventually hit $50, a 70% decline from trading. current levels of $171. That’s because the company’s robotaxi and artificial intelligence ambitions can only cloud a shaky business outlook for so long.

The founder of Moses Ventures revealed a Short Tesla last year, triggered by frustration with the purchase of X, formerly Twitter, by CEO Elon Musk. In Moses’ opinion, this hurt Musk’s attention to Tesla at a time when numerous headwinds were mounting.

Moses again focused on Musk for why he remains bearish on the stock, which is down nearly 33% year-to-date.

Shares rebounded briefly after CEO doubled down on robotaxi and AI plans in his first quarter earnings callbut Moses sees these announcements as a distraction from the company’s flawed fundamentals.

“For someone who cares so much about the human race, he’s laying off a lot of humans right now, and everything is falling apart in his core business,” he said Sunday. “So what’s he doing? He’s pointing everyone at Robotaxis and AI and autonomy and everything.”

Ahead of first-quarter results, many on Wall Street also became cautious about the EV company, citing stumbling delivery volumes and diminishing industry prospects.

The list of obstacles goes beyond its performance, Moses noted, citing that Tesla now faces a Justice Department investigation to determine whether Tesla deceived consumers and investors about the autonomous driving capabilities of their vehicles.

“The longer you spend here, and your core business comes under pressure, I think this movement to open it up to robotaxis and AI will fade over time. So $150 billion market cap at $50 – that seemed like a reasonable valuation to me,” he said.

While Moses considers Tesla to be his main short, he praised a separate autonomous driving company called Wayve. The company had recently raised $1 billion from major investors such as Nvidia and Bill Gates.

Read the original article at Business Insider

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