Dialectic Capital co-founder John Fichthorn called Tesla's better-than-expected earnings on Wednesday a "blip," saying the results were nothing more than pressure from Wall Street to produce a profitable quarter.
Tesla shares, which have fallen 15 percent this year, soared Wednesday as investors welcomed the company's third-quarter earnings announcement. Tesla CEO Elon Musk said in a conference call that he thinks the next quarter will be profitable, citing new product launches, increased store efficiency among other improvements. Weeks earlier, Tesla also announced it generated record delivery and production numbers.
But Fichthorn, a noted short seller, said he's short on Tesla and didn't buy the hype.
He said in a interview on CNBC's "Fast Money Halftime Report" Thursday that Musk needed to ease the Street's skepticism after the electric carmaker had previously failed to generate quarterly profit for years. Fichthorn claimed that Musk "manufactured" a positive free cash flow quarter due to the scrutiny.
"It's a Tesla quarter, right. That free clash flow is not free cash flow you can take to the bank," Fichthorn said. "They extended their payables by over 600 million dollars. They worked out some inventory, they dropped their CapEx dramatically. That was a one quarter blip."
Tesla, on the other hand, said it expects more profitable quarters to come. Musk told investors on Wednesday that Tesla reaffirms its forecast of 50,000 vehicles deliveries for the second half of the year, with a next quarter plan of over 25,000 deliveries.
Tesla's stock was trading slightly higher in early afternoon trade Thursday.