Hedge Fund Finds Two Ways To Lose Money On Tesla

Like some of his peers, Jacob Ma-Weaver still believes that Tesla will eventually be subject to the same facts, logic and market forces as other listed enterprises. As such, the Cable Car Capital chief is shorting its shares. This has not gone well.

Tesla’s stock jumped as much as 6% in after-hours trading Tuesday after the company announced a five-for-one stock split, set to go into effect on August 31…. Tesla’s stock is on a roll this year, despite challenges presented by the coronavirus pandemic. Shares have risen more than 200% since January to $1,374, and its market capitalization has surpassed the likes of Disney, Toyota and Coca Cola.

But Ma-Weaver wasn’t content to simply bet on Tesla’s eventual failure the old-fashioned way. He also decided to give a little “non-recourse financial support” to one Martin Tripp, a former Tesla technician who has spent much of his free time since leaving the company’s Nevada factory posting all manner of allegedly confidential information about it on social media. This has gone about as well as the short position: Not only has this failed to dent Tesla’s share price to Cable Car’s benefit, but it seems unlikely that Tripp’s defamation claim against the company will produce a return that might allow him to repay Cable Car. On the bright side, Tripp’s legal costs are about to go way down.

Tesla on Tuesday persuaded a judge to issue an emergency order forbidding Tripp from further publicizing confidential information. Tripp has disclosed volumes of Tesla’s confidential documents, deposition transcripts and filings in his posts on Twitter, YouTube and Google Drive, Tesla said in federal court in Reno, Nevada…. Cable Car portfolio manager Jacob Ma-Weaver, in a statement Wednesday, said it was “deeply disappointing” that Tripp “has chosen, against advice of counsel, to publicize confidential information including his funding arrangements….”

“We’re obviously horrified and disappointed about what has happened,” [Tripp lawyer William] Fischbach said Tuesday at a hearing by phone on Tesla’s emergency request.

Tripp is parting ways with his lawyers and intends to represent himself, Fischbach said….

In addition, the judge scheduled a hearing on whether Tripp should be held in contempt of court for violating the order to keep information confidential and what sanctions he might face if so. Those sanctions could include dismissing his claim against Tesla and rendering a default judgment against him, Baldwin said.

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