Fund manager WHEB is a leader in sustainable investing. But the Britain-based group’s portfolio doesn’t include Tesla, the Silicon Valley electric carmaker that arguably is the most exciting green tech company in the world.
“No other stock in our Sustainability universe captures the imagination like Tesla,” wrote WHEB Partner and Fund Manager Ted Franks in a September 13 commentary. “The product itself is thrilling.”
Founder and Chief Executive Elon Musk’s guidance of the company is less than stellar, however.
“Its valuation was (and still is, by some measures) completely out of kilter with its prospects,” wrote Franks. “Alarmingly, it seems to need that high valuation, to make it possible to raise the cash needed to make the story work. This is a terrifying circularity.”
Production of Tesla’s Model 3, the company’s first mass-marketed car, has failed to meet targets.
More importantly, Musk has acted erratically lately. He mocked the first responders who rescued the boys trapped in a flooded cave in Thailand, floated the possibility of taking Tesla private on Twitter and appeared to smoke marijuana on an Internet talk show.
The United States government has opened two investigations into whether Musk’s comments about privatizing the company broke securities regulations and other rules, Bloomberg recently reported.
Frank wouldn’t buy soon.
“Watching from the sidelines this past month has reminded us of the importance of sustainability in the holistic sense,” wrote Franks. “We look for companies which don’t need to do something no-one has ever done. We like management teams that stay in control.”
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