DoubleLine Capital founder Jeffrey Gundlach believes that Tesla Motors (TSLA) co-founder and CEO Elon Musk, whose plans to build his Gigafactory are well known, should get out of the car business.
In an interview with Bloomberg News on Tuesday, Gundlach suggested the electric car guru goes all in on batteries and leaves the car making to existing giants.
Bloomberg’s Mary Childs reports on Gundlach’s talk at Bloomberg LP’s headquarters on Tuesday:
“Gundlach said he’s been trying to get together with Musk, a fellow Southern California resident, to persuade him to cut a deal with competitors in which Tesla would stop making cars and instead supply automakers’ batteries. Tesla ‘could be wildly transformational the way electricity and electromagnets were,” the 54-year-old Gundlach said yesterday.
He added that he sees a 30 percent chance that Tesla will give speculative investors a “killer” return, and that he’d buy the company’s shares over Twitter (TWTR)’s stock, which has slumped a stunning 22 percent in the last two trading sessions. Tesla is up 33% year-to-date, while Twitter has nosedived with returns of -50% since Jan. 1.
What does Twitter create,” Gundlach asked. “It creates information flow but it’s not really creating anything. If you’re going to buy a high-flier, I would rather own Tesla.”
Price action: Tesla shares are down $7 and change, or 3.51%, at $199.97, while Twitter shares are down $1.44, or 4.65%, to $30.40.