4 ms·

Without short sellers or another market mechanism to call bullshit on over-inflated and over-hyped investments, capital will be badly allocated. You're imagini

by 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.
  - deleted 8y ago
    [deleted]
  - toomuchtodo 8y ago
    Elon has wasted capital, both political and economic; this I can't argue with. I agree with the mission, not the man's behaviors, but have also lived long enough to recognize what a necessary evil is.
    - avar 8y ago
      Let's be real here. In the grand scheme of things Tesla's selling luxury toys and is bound to be something similar to cars as what Apple is to general computing. Overly expensive status symbols. Both in number of vehicles sold[1] and in distance driven[2] Tesla vehicles are handily beat by the likes of the Chevy Volt and Nissan Leaf. Those are the sorts of vehicles that are going to change the game and make a dent in climate change, not luxury cars. 1. https://insideevs.com/plug-in-electric-car-sales-ranked-by-oem-for-2017/ https://insideevs.com/plug-in-electric-car-sales-ranked-by-o... 2. https://insideevs.com/us-crosses-10-billion-e-miles-driven-facts-and-graphs/ https://insideevs.com/us-crosses-10-billion-e-miles-driven-f...
      - toomuchtodo 8y ago
        Let’s be real then. Tesla is actually attempting to ramp energy storage and EVs as fast as possible. No one else is even trying. Nissan has sold 300k Leafs in 7 years. Tesla sells that many EVs in a year at their current run rate. Ford isn’t even going to sell sedans in the US anymore, only low gas mileage trucks. The president of Fiat Chrysler asked people not to buy their EVs, as they lost money on each one. The Volt isn’t a vehicle worth arguing about (Chevrolet has only sold 100k of them, ever). The Model 3 is even outselling all BMW sedan sales. Just the Model 3, not including the S and X.
        dragontamer 8y ago
        > Let’s be real then. Tesla is actually attempting to ramp energy storage and EVs as fast as possible. I know we've talked about this before. But +100MW-hrs here and there is nothing. Yeah, 300MW in Australia is impressive for Lithium Ion. But... https://www.nytimes.com/interactive/2018/07/24/business/energy-environment/hoover-dam-renewable-energy.html https://www.nytimes.com/interactive/2018/07/24/business/ener... This singular $3 Billion project will give 2GW of power. If the lake holds 8-hours of water, that'd be 16-GW-hrs of energy in a single project. --------- If energy storage is to be figured out in the USA, we need to be calculating GW-hr scale projects, not MW-hr scale projects like Mr. Musk. Lithium Ion's main benefit was to Tesla, as Tesla would have a 2nd place to sell their Lithium Ion batteries. Its great for Tesla, but its way too small of a scale for me to consider it as a major solution to the USA's energy problem.
jsight 8y ago
I'm ok with shorts in general, but I do wish that the SEC put at least as much energy into prosecuting some of the bad behavior by some negative parties (who may or may not have been shorts, tbh) as it is the company. I follow the company closely, and have definitely seen some questionable behavior that seemed to be aimed at trying to create the negative news cycle for the business. Things like promoted reddit articles and a horde of bogus NHTSA complaints can be very damaging to the business' fundamentals. But maybe there is more investigation into these things than I realize, and certainly the need to investigate this material doesn't negate the need to investigate Musk's own questionable conduct as well.
- avar 8y ago
  Why should the SEC be prosecuting short sellers writing slander about TSLA any more than they should be prosecuting the people who are long on TSLA writing literal or figurative press releases praising the company? Both parties have an interest in the stock going one way or the other. Regulators need to get involved when something like insider manipulation of the stock happens, say when the CEO uses Twitter the way Elon Musk does.
  - jsight 8y ago
    When those statements are blatantly false with a clear intent to do reputational and market damage to the business they become more than simply "short sellers writing slander". When they pay to have them promoted it looks more like fraud.
    - avar 8y ago
      The SEC doesn't regulate people talking shit in public, even when those people are talking shit because they have a financial interest in a public company, or even if they're paying to make their message heard. They regulate things like people talking shit in public on Twitter while having access to insider information. There's no evidence that any of these people talking shit about TSLA because they hold shorts have access to information not available through the usual market disclosure mechanisms.

by avar 8y ago

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.
- deleted 8y ago
  [deleted]
- toomuchtodo 8y ago
  Elon has wasted capital, both political and economic; this I can't argue with. I agree with the mission, not the man's behaviors, but have also lived long enough to recognize what a necessary evil is.
  - avar 8y ago
    Let's be real here. In the grand scheme of things Tesla's selling luxury toys and is bound to be something similar to cars as what Apple is to general computing. Overly expensive status symbols. Both in number of vehicles sold[1] and in distance driven[2] Tesla vehicles are handily beat by the likes of the Chevy Volt and Nissan Leaf. Those are the sorts of vehicles that are going to change the game and make a dent in climate change, not luxury cars. 1. https://insideevs.com/plug-in-electric-car-sales-ranked-by-oem-for-2017/ https://insideevs.com/plug-in-electric-car-sales-ranked-by-o... 2. https://insideevs.com/us-crosses-10-billion-e-miles-driven-facts-and-graphs/ https://insideevs.com/us-crosses-10-billion-e-miles-driven-f...
    - toomuchtodo 8y ago
      Let’s be real then. Tesla is actually attempting to ramp energy storage and EVs as fast as possible. No one else is even trying. Nissan has sold 300k Leafs in 7 years. Tesla sells that many EVs in a year at their current run rate. Ford isn’t even going to sell sedans in the US anymore, only low gas mileage trucks. The president of Fiat Chrysler asked people not to buy their EVs, as they lost money on each one. The Volt isn’t a vehicle worth arguing about (Chevrolet has only sold 100k of them, ever). The Model 3 is even outselling all BMW sedan sales. Just the Model 3, not including the S and X.
      - dragontamer 8y ago
        > Let’s be real then. Tesla is actually attempting to ramp energy storage and EVs as fast as possible. I know we've talked about this before. But +100MW-hrs here and there is nothing. Yeah, 300MW in Australia is impressive for Lithium Ion. But... https://www.nytimes.com/interactive/2018/07/24/business/energy-environment/hoover-dam-renewable-energy.html https://www.nytimes.com/interactive/2018/07/24/business/ener... This singular $3 Billion project will give 2GW of power. If the lake holds 8-hours of water, that'd be 16-GW-hrs of energy in a single project. --------- If energy storage is to be figured out in the USA, we need to be calculating GW-hr scale projects, not MW-hr scale projects like Mr. Musk. Lithium Ion's main benefit was to Tesla, as Tesla would have a 2nd place to sell their Lithium Ion batteries. Its great for Tesla, but its way too small of a scale for me to consider it as a major solution to the USA's energy problem.

jsight 8y ago

I'm ok with shorts in general, but I do wish that the SEC put at least as much energy into prosecuting some of the bad behavior by some negative parties (who may or may not have been shorts, tbh) as it is the company. I follow the company closely, and have definitely seen some questionable behavior that seemed to be aimed at trying to create the negative news cycle for the business. Things like promoted reddit articles and a horde of bogus NHTSA complaints can be very damaging to the business' fundamentals. But maybe there is more investigation into these things than I realize, and certainly the need to investigate this material doesn't negate the need to investigate Musk's own questionable conduct as well.

avar 8y ago
Why should the SEC be prosecuting short sellers writing slander about TSLA any more than they should be prosecuting the people who are long on TSLA writing literal or figurative press releases praising the company? Both parties have an interest in the stock going one way or the other. Regulators need to get involved when something like insider manipulation of the stock happens, say when the CEO uses Twitter the way Elon Musk does.
- jsight 8y ago
  When those statements are blatantly false with a clear intent to do reputational and market damage to the business they become more than simply "short sellers writing slander". When they pay to have them promoted it looks more like fraud.
  - avar 8y ago
    The SEC doesn't regulate people talking shit in public, even when those people are talking shit because they have a financial interest in a public company, or even if they're paying to make their message heard. They regulate things like people talking shit in public on Twitter while having access to insider information. There's no evidence that any of these people talking shit about TSLA because they hold shorts have access to information not available through the usual market disclosure mechanisms.