A $9 million hedge fund concluded that Tesla Motors — in which I have no financial interest — will burn through its cash. The key assumption underlying that conclusion is that if the company charges $35,000 for its Model 3, Tesla will lose so much money that its cash will go up in flames.
Should you flee its shares? They look risky to me.
I will update this post should Tesla respond to my request for comment.
Before getting into Tesla’s cash forecast, let’s take a look at a concept I wrote about eight years ago — The Value Cycle — the idea that in order to sustain superior performance, a company must keep turning the strategy wheel through three distinct processes.