Tesla's ‘day of reckoning' is near as its plunging stock increases risk

"Tesla represents a financially non-viable business. It has an upside-down balance sheet. The multi-billion cash burn is massive with no end in sight," Accipiter Capital's Gabe Hoffman wrote in an email Wednesday. "The financial need for Tesla to issue massive amounts of new equity has been glaringly obvious for quite some time."

Hoffman cited the recent departures of Tesla executives such as its chief accounting officer in early March.

"This is an incredibly ominous sign, which I believe confirms my thesis," he wrote. "Tesla is our fund's largest short position. We have not covered a single share on this decline."