Renowned hedge fund manager Per Lekander recently warned that Tesla's stock price has been overvalued and may soon face a significant correction.
In his view, Tesla is only worth $15, which means it is about to plummet by over 90%.
He said in an interview, "In my opinion, Tesla is the largest stock market foam in the history of the world. The models on the market are outdated, and the valuation is absolutely crazy." He predicted that Tesla's earnings may decline by 50% this year.
Lekand is the managing partner of Clean Energy Transition LLP, an investment management company with over thirty years of work experience in the global energy sector, and is renowned for accurately predicting the soaring carbon prices in 2018. Although this investment management company claims to be a "positive force for energy transformation," it has been short selling Tesla stocks since 2020.
He said in 2021 that Tesla was in a foam. Earlier this year, he also warned that he believed Tesla could go bankrupt in the future. He, like other bears of Tesla, criticized the stock for being overvalued.
Tesla's sales in the previous quarter were far below expectations, indicating that the automaker is working hard to address weak demand and intensified competition in the electric vehicle industry.
Lekand stated that Tesla also faces the risk of multiple ongoing lawsuits and a huge compensation package from the board. He previously said that Tesla is already a stock with no growth prospects, and the expected price to earnings ratio should be only 10 times.
In the latest interview, he emphasized, "I think considering there is no growth here - a 10 times P/E ratio is very generous. My target stock price is $15... I think this is very dangerous."
As of Monday's closing of the US stock market, Tesla rose 5.3% to $187.44. As the market closed, Musk posted on social media X that he was actively working on Tesla's "grand plan four," stating that it would be an epic plan. Musk announced the first, second, and third parts of the plan in 2006, 2016, and 2023, respectively.
So far, each master plan outlines a business plan to advance sustainable transportation, household and commercial energy storage products, as well as deploying larger, grid scale batteries and other renewable solutions.
The prospect is worrying
Lekand's target price means that Tesla's stock price will drop by nearly 92% from its current level, and he predicts that once Tesla releases its second quarter results, the stock price will fall.
According to him, considering Tesla's dismal production results in the first quarter, Q2 delivery may improve, but the profits of this automaker will be "absolutely poor".
"The company may suffer losses," he said.
Lekand also predicts that if Tesla experiences losses for two consecutive quarters, its stock price is likely to experience double-digit declines.
"Once the stock price starts to decline, it will fall even more... I think we are very, very close to the turning point," he added.