NEW YORK (TheStreet) --Stanphyl Capital's managing member and portfolio manager Mark Spiegel joined CNBC's "Closing Bell" on Monday to explain why he is short Tesla (TSLA) - Get Reportand why he says Elon Musk has deceived investors.
"Tesla has absolutely nothing sustainable propriety and yet it's losing a massive amount of money with zero direct long-range electric car competition. Starting in just a few months and into 2018 it's going to be swarmed with long-range electric car competition," Spiegel explained.
Speaking to this point of long-range electric car competition, Spiegel noted that Mercedes is rolling out four, Porsche (POAHF) is rolling out two, Audi's (AUDVF) rolling out two, Jaguar (JAGGF), and Bentley (BESR), are rolling out one each. On the mass market, Ford (F) is rolling out two, Volkswagen (VLKAY) is rolling out five, Hyundai (HYMLF) is rolling out two, and that's all in 2018-2019.
Spiegel sees no practical way the company can continue on the path it's currently on, in trying to infiltrate the mass car market, with the amount of money it loses per production of a Model 3 vehicle.
"Tesla lost last quarter as a GAAP number, around $20,000 for every Model 3 it sold with a base price of $70,000. Even, when accounting for some capital expenditure and research and development figures, it still lost thousands of dollars per car. There is no way in the world they can build the Model 3 for a cost of anything less than maybe $45,000-high $40,000s," Spiegel noted.
Finally, Spiegel discussed the man behind Tesla, Elon Musk, and how he believes Musk might not be as invested in the company as some think.
"Elon Musk is the most deceptive CEO I've ever seen. You can compare what he says and what he claims to what is happening, and if anybody studied that stuff, he would have no credibility. Now, the one credible thing he has said is he doesn't care if Tesla stays in business as long as he can electrify the world of cars. That's very nice of him, but that's not a company to invest in," Spiegel concluded.
Separately, rates Tesla as a"Sell" with a ratings score of D+." This is driven by a number of negative factors, which TheStreet Ratings believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks TheStreet Ratings covers.
The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: TSLA