5 ms·

It's not shorted because of its mission, its shorted because of the negative cash flow. Musks' public persona doesn't exactly give off the aura of a man who has

by arawde 8y ago

It's not shorted because of its mission, its shorted because of the negative cash flow. Musks' public persona doesn't exactly give off the aura of a man who has his companies operating expenses and profitability under control.

toomuchtodo 8y ago
So, I get it. This is how capitalism is supposed to work. But I don't think anyone is going to care about the wealth of these short sellers when the climate is irreversibly changed. China is smart. They don't fuck around with tax incentives and other silly market manipulators. They use central policy planning to drive forward renewables and battery electric vehicles at nation state scale, and it's a damn shame the United States and other first world countries don't have the same fortitude; yet, our markets will rail against someone who has bet his personal fortune to accomplish these goals.
- ivraatiems 8y ago
  In my opinion: We (as a society and a country) need Tesla to succeed. Tesla can't succeed with Elon Musk as CEO at this point. So Elon should be removed.
  - toomuchtodo 8y ago
    Owning about 12k shares of TSLA, having followed the company closely since inception (when it was ran by Martin Eberhard and Marc Tarpenning), I can't see Tesla succeeding without Musk. It'll end up acquired, or as a boutique manufacturer like Ferrari. Tesla's value is Musk's determination. Still, he needs to choose his actions more wisely, clearly.
    - kgwgk 8y ago
      > It'll end up acquired, Maybe. The main question is whether it will happen before or after bankruptcy (chapter 11 reorganization).
    - spookthesunset 8y ago
      > Owning about 12k shares of TSLA If only all of the TSLA fanboys posted how much money they have on the line. After reading this, all the rest of your comments suddenly make sense. Pro Tip: Don't get emotional over your investments or you are gonna lose the ability to think rationally and get burned.
      - toomuchtodo 8y ago
        I'm financially independent without my Tesla holdings. If it all goes to zero, I'm prepared for that. If being a fanboy of a company working towards positive change in the world (which is so very often rare, unfortunately) is wrong, I don't want to be right. Everyone finds meaning in different ways. This is my small contribution.
- avar 8y ago
  Without short sellers or another market mechanism to call bullshit on over-inflated and over-hyped investments, capital will be badly allocated. You're imagining some future where because of shorts we don't put enough money into TSLA and never have electric cars. That's not how this works. With shorts (if the short sellers are right) TSLA is full of it, and capital is much better allocated at BMW, Toyota, or some other car startup, and the sooner everyone finds that out and moves their money over or stops inflating TSLA the better.
  - toomuchtodo 8y ago
    > Without short sellers or another market mechanism to call bullshit on over-inflated and over-hyped investments, capital will be badly allocated. Capital allocates to what is best for the markets, not what is best for the world. I can't breath shareholder returns. We can't wait for BMW and Toyota to cannibalize their internal combustion product lines with EVs because it's not financially convenient for them (runaway climate change, all that jazz [1]). Traditional manufacturers have no incentive to disrupt the status quo and instead, continue to churn out internal combustion vehicles. “Yes, the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders.” [2] [1] https://www.theguardian.com/environment/2018/sep/26/global-warming-climate-change-targets-un-report https://www.theguardian.com/environment/2018/sep/26/global-w... ("World 'nowhere near on track' to avoid warming beyond 1.5C target") [2] https://www.newyorker.com/cartoon/a16995 https://www.newyorker.com/cartoon/a16995
    - dragontamer 8y ago
      Short-sellers didn't cause Elon Musk to tweet fraudulently, putting himself and his company into legal jeopardy with the SEC. Frankly, Q3 2018 was shaping up to be a big moment where M3 cars were mass produced and selling well. If Mr. Musk just shut up for the past 6 months and never tweeted anything, then Tesla would be in a far stronger position. Today: Musk has to deal with the pedophile slander lawsuit, the SEC investigation, and now the DoJ investigation. The shorts did NONE of this, it was all Mr. Musk's mistake. If Mr. Musk sat tight, released the (what seem to be) good Q3 2018 numbers, then the shorts would have been busted naturally. That's how you "beat the shorts". Have a strong quarter, have a strong year, and push the stock price up. Short sellers lose money every time the stock rises. ------------- And I'm sure people out there will complain about the 2-billion convertible loan due 2019, and how short-sellers are destroying the $360 price point. Guess what? The CEO's job is to secure funding. It was Mr. Musk who signed Tesla to that deal. If you think the loan was idiotic, then it was Mr. Musk's fault for signing the loan back in 2014. That's Musk's decision however. He's had 5 years to make a profit on a 5-year loan with 0.25% coupon (!!!) and that's his own darn fault for not keeping track of it and turning a profit in time. (Frankly: 0.25% loan for 5-years are stupendous terms. I do think it was good way to raise money) Details on the loan due March 2019: http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?symbol=TSLA4103350&ticker=C607199 http://finra-markets.morningstar.com/BondCenter/BondDetail.j... The terms of this loan are: $360 call option or cash back on March 2019. Which means bondholders can buy the stock at $360 (no matter what price TSLA is at), OR can demand cash back instead. Given the current price of TSLA, it seems like the bondholders will ask for Cash. But Musk clearly though, way back in 2014 when he signed this deal, that he would raise the stock price to $360 to avoid paying back the loan. OR he was fine with a 0.25% coupon (!!) on a 5-year rate. Anyone who follows finances knows that this bond was an incredible deal to the advantage of Tesla, and no one should be touting this loan as a disadvantage.
drawkbox 8y ago
Obviously car companies are hard to run. Though internet companies aren't the best at cash flow management either, it is more about getting the market / customers then the profit. I think innovation is excusable for revenue/profits for some time. Starting an electric car ONLY car company is even harder than having it as part of an existing car company like Mercedes is doing well with. The shorts are mainly trying to kill Tesla and coming from the oil, gas, other auto companies most of all. Lots of games are played with car companies (see VW short squeeze a historically big one) because they can't react as fast as it is hard work. I think the shorts have been not just focused on profitability but to drive out the competitive threat, the shorts have also been attacking Elon Musk non-stop.
- computerex 8y ago
  Do you have any evidence for the claims you are making? Elon Musk has done plenty on his own to be attacked.
- compcoffee 8y ago
  >The shorts are mainly trying to kill Tesla and coming from the oil, gas, other auto companies most of all. What about when Elon was spreading rumours that the Saudi's wanted to take Tesla private?
- rleigh 8y ago
  I imagine they are hard to run. But they don't require "genius" to run, they require people skilled in process management, supply chain operations, assembly automation and the rest. The stuff all the other big car manufacturers have been doing for decades. All stuff that Musk doesn't have a background in. What makes Tesla unique in this respect, and Musk so essential to the operations? I'd argue nothing at all, other than his image. Hire some experts from the other companies, people with a few decades of experience, and let them turn it around. Maybe start with why you're hand-assembling and gluing things together in tents, rather than using the high efficiency production lines everyone else is using.
  - drawkbox 8y ago

by arawde 8y ago

toomuchtodo 8y ago

So, I get it. This is how capitalism is supposed to work. But I don't think anyone is going to care about the wealth of these short sellers when the climate is irreversibly changed. China is smart. They don't fuck around with tax incentives and other silly market manipulators. They use central policy planning to drive forward renewables and battery electric vehicles at nation state scale, and it's a damn shame the United States and other first world countries don't have the same fortitude; yet, our markets will rail against someone who has bet his personal fortune to accomplish these goals.

ivraatiems 8y ago
In my opinion: We (as a society and a country) need Tesla to succeed. Tesla can't succeed with Elon Musk as CEO at this point. So Elon should be removed.
- toomuchtodo 8y ago
  Owning about 12k shares of TSLA, having followed the company closely since inception (when it was ran by Martin Eberhard and Marc Tarpenning), I can't see Tesla succeeding without Musk. It'll end up acquired, or as a boutique manufacturer like Ferrari. Tesla's value is Musk's determination. Still, he needs to choose his actions more wisely, clearly.
  - kgwgk 8y ago
    > It'll end up acquired, Maybe. The main question is whether it will happen before or after bankruptcy (chapter 11 reorganization).
  - spookthesunset 8y ago
    > Owning about 12k shares of TSLA If only all of the TSLA fanboys posted how much money they have on the line. After reading this, all the rest of your comments suddenly make sense. Pro Tip: Don't get emotional over your investments or you are gonna lose the ability to think rationally and get burned.
    - toomuchtodo 8y ago
      I'm financially independent without my Tesla holdings. If it all goes to zero, I'm prepared for that. If being a fanboy of a company working towards positive change in the world (which is so very often rare, unfortunately) is wrong, I don't want to be right. Everyone finds meaning in different ways. This is my small contribution.
avar 8y ago
Without short sellers or another market mechanism to call bullshit on over-inflated and over-hyped investments, capital will be badly allocated. You're imagining some future where because of shorts we don't put enough money into TSLA and never have electric cars. That's not how this works. With shorts (if the short sellers are right) TSLA is full of it, and capital is much better allocated at BMW, Toyota, or some other car startup, and the sooner everyone finds that out and moves their money over or stops inflating TSLA the better.
- toomuchtodo 8y ago
  > Without short sellers or another market mechanism to call bullshit on over-inflated and over-hyped investments, capital will be badly allocated. Capital allocates to what is best for the markets, not what is best for the world. I can't breath shareholder returns. We can't wait for BMW and Toyota to cannibalize their internal combustion product lines with EVs because it's not financially convenient for them (runaway climate change, all that jazz [1]). Traditional manufacturers have no incentive to disrupt the status quo and instead, continue to churn out internal combustion vehicles. “Yes, the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders.” [2] [1] https://www.theguardian.com/environment/2018/sep/26/global-warming-climate-change-targets-un-report https://www.theguardian.com/environment/2018/sep/26/global-w... ("World 'nowhere near on track' to avoid warming beyond 1.5C target") [2] https://www.newyorker.com/cartoon/a16995 https://www.newyorker.com/cartoon/a16995
  - dragontamer 8y ago
    Short-sellers didn't cause Elon Musk to tweet fraudulently, putting himself and his company into legal jeopardy with the SEC. Frankly, Q3 2018 was shaping up to be a big moment where M3 cars were mass produced and selling well. If Mr. Musk just shut up for the past 6 months and never tweeted anything, then Tesla would be in a far stronger position. Today: Musk has to deal with the pedophile slander lawsuit, the SEC investigation, and now the DoJ investigation. The shorts did NONE of this, it was all Mr. Musk's mistake. If Mr. Musk sat tight, released the (what seem to be) good Q3 2018 numbers, then the shorts would have been busted naturally. That's how you "beat the shorts". Have a strong quarter, have a strong year, and push the stock price up. Short sellers lose money every time the stock rises. ------------- And I'm sure people out there will complain about the 2-billion convertible loan due 2019, and how short-sellers are destroying the $360 price point. Guess what? The CEO's job is to secure funding. It was Mr. Musk who signed Tesla to that deal. If you think the loan was idiotic, then it was Mr. Musk's fault for signing the loan back in 2014. That's Musk's decision however. He's had 5 years to make a profit on a 5-year loan with 0.25% coupon (!!!) and that's his own darn fault for not keeping track of it and turning a profit in time. (Frankly: 0.25% loan for 5-years are stupendous terms. I do think it was good way to raise money) Details on the loan due March 2019: http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?symbol=TSLA4103350&ticker=C607199 http://finra-markets.morningstar.com/BondCenter/BondDetail.j... The terms of this loan are: $360 call option or cash back on March 2019. Which means bondholders can buy the stock at $360 (no matter what price TSLA is at), OR can demand cash back instead. Given the current price of TSLA, it seems like the bondholders will ask for Cash. But Musk clearly though, way back in 2014 when he signed this deal, that he would raise the stock price to $360 to avoid paying back the loan. OR he was fine with a 0.25% coupon (!!) on a 5-year rate. Anyone who follows finances knows that this bond was an incredible deal to the advantage of Tesla, and no one should be touting this loan as a disadvantage.

drawkbox 8y ago

Obviously car companies are hard to run. Though internet companies aren't the best at cash flow management either, it is more about getting the market / customers then the profit. I think innovation is excusable for revenue/profits for some time. Starting an electric car ONLY car company is even harder than having it as part of an existing car company like Mercedes is doing well with. The shorts are mainly trying to kill Tesla and coming from the oil, gas, other auto companies most of all. Lots of games are played with car companies (see VW short squeeze a historically big one) because they can't react as fast as it is hard work. I think the shorts have been not just focused on profitability but to drive out the competitive threat, the shorts have also been attacking Elon Musk non-stop.

computerex 8y ago
Do you have any evidence for the claims you are making? Elon Musk has done plenty on his own to be attacked.
compcoffee 8y ago
>The shorts are mainly trying to kill Tesla and coming from the oil, gas, other auto companies most of all. What about when Elon was spreading rumours that the Saudi's wanted to take Tesla private?
rleigh 8y ago
I imagine they are hard to run. But they don't require "genius" to run, they require people skilled in process management, supply chain operations, assembly automation and the rest. The stuff all the other big car manufacturers have been doing for decades. All stuff that Musk doesn't have a background in. What makes Tesla unique in this respect, and Musk so essential to the operations? I'd argue nothing at all, other than his image. Hire some experts from the other companies, people with a few decades of experience, and let them turn it around. Maybe start with why you're hand-assembling and gluing things together in tents, rather than using the high efficiency production lines everyone else is using.
- drawkbox 8y ago