5 ms·

How did short sellers actually impact the company's operation? Or was the damage entirely to his ego and his desire to reach milestones so he could vest.

jml78 5y ago
Short sellers have a vested interest in seeing a company fail. So spreading FUD absolutely happens whether it is Tesla or any company being shorted. It can definitely have an impact on the viability of a company Has nothing to do with ego.
bananabreakfast 5y ago
There were people in Palo Alto and Fremont literally harassing employees trying to get them to confess that Elon is lying. Multiple Tesla test vehicles were run off the road. Tesla filed multiple restraining orders against people dedicated to unveiling the company's "fraud". There was very much a human cost to all of the FUD the short sellers were spreading.
cliftonk 5y ago
They don’t unless they fabricate news that drives their cost of capital up in a significant way (they were never successful in doing so). “Fighting” short-sellers is something generally only seen with CEOs committing serious fraud so the wall st careerists were all but certain Tesla was a fraud by behavioral pattern recognition that had been working for entire careers. They were wrong, of course, but Elon’s focus on “shorts” was a hugely massive waste of his attention and completely unnecessary. The way you “fight” shorts is by executing and ignoring them.
- Mountain_Skies 5y ago
  Short sellers can also lobby the government for policy changes and enforcement actions that harm the company they've shorted.
  - FooBarBizBazz 5y ago
    I understand that so-called "activist" shorts will send private investigators and paparazzi after CEOs, manufacture sexual harassment charges, and all kinds of really dirty stuff.
sigil 5y ago
Chanos, the lead short seller here, manufactured a crisis of confidence that made a crucial capital raise difficult. This proved fatal to SolarCity — and also impacted SpaceX, as holder of SolarCity bonds. In 2018, the same playbook from Chanos nearly cratered Tesla. Here’s a timeline and analysis from a trader: https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-sellers.118431/ https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-s...
- chris_va 5y ago
  ... The concept of a car company purchasing a flailing solar company that happened to be owned by the same individual is probably worth of some eyebrow raising. So, I am not sure "manufactured" is the right term here, regardless of the motivation of the people involved. (I have no vested interest here)
  - sigil 5y ago
    Agreed on that point. A failure mode we're all familiar with -- more dependency arrows, more problems! But why did Vivint and Sunrun succeed when SolarCity failed? Sunrun apparently had a similar business model and economics. The linked analysis raises this question, although I don't know enough about the solar industry to say whether this is reasonable to ask, or fundamentally an apples-to-oranges comparison.
  - slownews45 5y ago
    Elon had roughly the same % of both companies both separately and together, so it's not clear to me how its a big advantage financially for him. From a strategy standpoint - a no brainer to purchase what is now energy - he knew all the people there, was already working there, had a big stake there, and they may play an important role in his green energy plan. For everyone saying he should have bought some chinese solar co - he's focused ons speed, and getting up to speed on a new solar company - why? Secondarily, how are those solarcity or tesla shareholders doing? How is tesla energy doing? You got to be able to take some risks as the boss, that's why he is there. And no question he takes risks.
  - kevin_thibedeau 5y ago
deeviant 5y ago
Short sellers have an enormous incentive for the company they short to fail and they will do anything (legal or sometimes otherwise) in order to negatively affect stock price. It turns out when a company has multiple entities with significant resources trying to make it fail, it sometimes negatively affects the shorted company.
LatteLazy 5y ago
Short sellers make it harder to raise capital and force CEOs to show more short term progress.

jml78 5y ago

Short sellers have a vested interest in seeing a company fail. So spreading FUD absolutely happens whether it is Tesla or any company being shorted. It can definitely have an impact on the viability of a company Has nothing to do with ego.

bananabreakfast 5y ago

There were people in Palo Alto and Fremont literally harassing employees trying to get them to confess that Elon is lying. Multiple Tesla test vehicles were run off the road. Tesla filed multiple restraining orders against people dedicated to unveiling the company's "fraud". There was very much a human cost to all of the FUD the short sellers were spreading.

cliftonk 5y ago

They don’t unless they fabricate news that drives their cost of capital up in a significant way (they were never successful in doing so). “Fighting” short-sellers is something generally only seen with CEOs committing serious fraud so the wall st careerists were all but certain Tesla was a fraud by behavioral pattern recognition that had been working for entire careers. They were wrong, of course, but Elon’s focus on “shorts” was a hugely massive waste of his attention and completely unnecessary. The way you “fight” shorts is by executing and ignoring them.

Mountain_Skies 5y ago
Short sellers can also lobby the government for policy changes and enforcement actions that harm the company they've shorted.
- FooBarBizBazz 5y ago
  I understand that so-called "activist" shorts will send private investigators and paparazzi after CEOs, manufacture sexual harassment charges, and all kinds of really dirty stuff.

sigil 5y ago

Chanos, the lead short seller here, manufactured a crisis of confidence that made a crucial capital raise difficult. This proved fatal to SolarCity — and also impacted SpaceX, as holder of SolarCity bonds. In 2018, the same playbook from Chanos nearly cratered Tesla. Here’s a timeline and analysis from a trader: https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-sellers.118431/ https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-s...

chris_va 5y ago
... The concept of a car company purchasing a flailing solar company that happened to be owned by the same individual is probably worth of some eyebrow raising. So, I am not sure "manufactured" is the right term here, regardless of the motivation of the people involved. (I have no vested interest here)
- sigil 5y ago
  Agreed on that point. A failure mode we're all familiar with -- more dependency arrows, more problems! But why did Vivint and Sunrun succeed when SolarCity failed? Sunrun apparently had a similar business model and economics. The linked analysis raises this question, although I don't know enough about the solar industry to say whether this is reasonable to ask, or fundamentally an apples-to-oranges comparison.
- slownews45 5y ago
  Elon had roughly the same % of both companies both separately and together, so it's not clear to me how its a big advantage financially for him. From a strategy standpoint - a no brainer to purchase what is now energy - he knew all the people there, was already working there, had a big stake there, and they may play an important role in his green energy plan. For everyone saying he should have bought some chinese solar co - he's focused ons speed, and getting up to speed on a new solar company - why? Secondarily, how are those solarcity or tesla shareholders doing? How is tesla energy doing? You got to be able to take some risks as the boss, that's why he is there. And no question he takes risks.
- kevin_thibedeau 5y ago

deeviant 5y ago

Short sellers have an enormous incentive for the company they short to fail and they will do anything (legal or sometimes otherwise) in order to negatively affect stock price. It turns out when a company has multiple entities with significant resources trying to make it fail, it sometimes negatively affects the shorted company.

LatteLazy 5y ago

Short sellers make it harder to raise capital and force CEOs to show more short term progress.