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Thanks. Your last sentence seems to sum up the motive here in my opinion, not so much to screw the short sellers, but to limit/stop the ability of them to influ

by S_A_P 8y ago

Thanks. Your last sentence seems to sum up the motive here in my opinion, not so much to screw the short sellers, but to limit/stop the ability of them to influence the value of the company through whatever means.

Tomte 8y ago
Short sellers aren‘t evil. They are a mechanism how the public trade exchange improves its estimate how much a company is worth. After the very ugly financial news over the last months (but probably true — nobody has credibly refuted them), it‘s not hard to see why Musk and the less rational part of his supporters would love to see short sellers disappear, and „punished“.
- ChicagoDave 8y ago
  I wouldn't say "evil" either. I just think some of the short sellers have motivations beyond straight financial business modeling.
- fossuser 8y ago
  Shorting is fine when you're predicting the stock will go down, it starts leaning towards evil when you try and damage the company to cause the price to go down. Billions on the line create a nasty incentive and a publicly traded company is more at risk of negative attacks when they're not yet profitable.
  - nopriorarrests 8y ago
    There is zero evidence of shorts trying to damage the company. Every time when TSLA stock was down last year it was some material news regarding missing Model 3 production estimates previously provided by Elon Musk himself or something like that.
    - ChicagoDave 8y ago
      Not quite true... https://electrek.co/2018/07/24/tesla-troll-short-doxxed-oil-industry-musk-calls-boss/ https://electrek.co/2018/07/24/tesla-troll-short-doxxed-oil-...
ChicagoDave 8y ago
Oh I wouldn't discount Elon's interest in screwing the short-sellers. There's ample evidence of his disdain for these people and even if you're bearish on Tesla, I think a lot of the short-sellers are fueled by oil & gas interests, so Elon's ire is not unwarranted. I don't think the media portrays this battle appropriately. Tesla is the #1 enemy of the combustion engine supply chain and that is no small thing. Every single auto parts store, every car manufacturer that does not sell EV's, and especially the oil & gas industry is at risk of Tesla's success. This is a titanic battle. Don't anyone ever forget that.
- karpodiem 8y ago
  I'm not fueled by oil and gas interests - I know a fraud when I see one. I'm short the equity, since dividends aren't a concern. Tesla cannot manufacture at scale - they do not have the experience or capital to execute on this. Their financial statements demonstrate as much, and the build quality/reliability issues that are prevalent on forums/reddit/twitter demonstrate this.
  - ChicagoDave 8y ago
    Jeff Bezos was a fraud for a number of years too. If Musk gets the funding to go private, gets the 2-4 years of runway he needs to make the business work, that's a good thing. I'm not a fan of businesses that run red year after year, but in some cases, there are societal benefits that vastly outweigh those concerns. A successful mass-production battery and EV business is something that can have a massive impact on reducing CO2 emissions. So a lot of people and investors are less concerned about making money and financial models than they are about moving from fossil fuels to renewables. And if Tesla gets a few more years, the profits will come. If you're only concerned with the bottom line, why are you investing in or against a startup? That seems like gambling to me and if you lose, that's on you, not on Tesla.
BonesJustice 8y ago
Short sellers aren't the only ones getting screwed. If you had taken a long position by buying call options with a strike price over $420, you're not gonna have a good time. For example, the bids on $430 call options expiring in January and June 2019 were down ~20% and ~25%, respectively. If Elon's plan goes to fruition, those options can (probably) never be exercised. The further out the expiry and the higher the strike, the worse it gets. Liquidity just evaporated, and the spreads are getting wider.

by S_A_P 8y ago

Tomte 8y ago

Short sellers aren‘t evil. They are a mechanism how the public trade exchange improves its estimate how much a company is worth. After the very ugly financial news over the last months (but probably true — nobody has credibly refuted them), it‘s not hard to see why Musk and the less rational part of his supporters would love to see short sellers disappear, and „punished“.

ChicagoDave 8y ago
I wouldn't say "evil" either. I just think some of the short sellers have motivations beyond straight financial business modeling.
fossuser 8y ago
Shorting is fine when you're predicting the stock will go down, it starts leaning towards evil when you try and damage the company to cause the price to go down. Billions on the line create a nasty incentive and a publicly traded company is more at risk of negative attacks when they're not yet profitable.
- nopriorarrests 8y ago
  There is zero evidence of shorts trying to damage the company. Every time when TSLA stock was down last year it was some material news regarding missing Model 3 production estimates previously provided by Elon Musk himself or something like that.
  - ChicagoDave 8y ago
    Not quite true... https://electrek.co/2018/07/24/tesla-troll-short-doxxed-oil-industry-musk-calls-boss/ https://electrek.co/2018/07/24/tesla-troll-short-doxxed-oil-...

ChicagoDave 8y ago

Oh I wouldn't discount Elon's interest in screwing the short-sellers. There's ample evidence of his disdain for these people and even if you're bearish on Tesla, I think a lot of the short-sellers are fueled by oil & gas interests, so Elon's ire is not unwarranted. I don't think the media portrays this battle appropriately. Tesla is the #1 enemy of the combustion engine supply chain and that is no small thing. Every single auto parts store, every car manufacturer that does not sell EV's, and especially the oil & gas industry is at risk of Tesla's success. This is a titanic battle. Don't anyone ever forget that.

karpodiem 8y ago
I'm not fueled by oil and gas interests - I know a fraud when I see one. I'm short the equity, since dividends aren't a concern. Tesla cannot manufacture at scale - they do not have the experience or capital to execute on this. Their financial statements demonstrate as much, and the build quality/reliability issues that are prevalent on forums/reddit/twitter demonstrate this.
- ChicagoDave 8y ago
  Jeff Bezos was a fraud for a number of years too. If Musk gets the funding to go private, gets the 2-4 years of runway he needs to make the business work, that's a good thing. I'm not a fan of businesses that run red year after year, but in some cases, there are societal benefits that vastly outweigh those concerns. A successful mass-production battery and EV business is something that can have a massive impact on reducing CO2 emissions. So a lot of people and investors are less concerned about making money and financial models than they are about moving from fossil fuels to renewables. And if Tesla gets a few more years, the profits will come. If you're only concerned with the bottom line, why are you investing in or against a startup? That seems like gambling to me and if you lose, that's on you, not on Tesla.

BonesJustice 8y ago

Short sellers aren't the only ones getting screwed. If you had taken a long position by buying call options with a strike price over $420, you're not gonna have a good time. For example, the bids on $430 call options expiring in January and June 2019 were down ~20% and ~25%, respectively. If Elon's plan goes to fruition, those options can (probably) never be exercised. The further out the expiry and the higher the strike, the worse it gets. Liquidity just evaporated, and the spreads are getting wider.