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Misleading investors is one thing, misleading consumers is another. Rightly or wrongly, many people believed Musk when he said the cars could drive themselves.

Misleading investors is one thing, misleading consumers is another. Rightly or wrongly, many people believed Musk when he said the cars could drive themselves. Musk is a cult of personality and as a result Tesla definitely has customers believing everything Musk says about his cars. To me, that's the bigger problem than lying to investors: investors are supposed to know better.

acdha 3y ago
Very large investors are supposed to know better but it’s not the 80s and most investors (by number, not wealth) are those same consumers, especially for a stock which has been heavily boosted by Musk’s public persona. When they make lies in official statements like “The person in the driver’s seat is only there for legal reasons. He is not doing anything. The car is driving itself.” or claiming that the car drives better than a human, as Musk did on an earnings call in 2016, the government should be thinking of the retiree who bought a few shares rather than the professional trader who pays consulting engineers to fact-check that marketing.
- taylodl 3y ago
  Good point - I need to adjust my thinking on who an investor is.
- enslavedrobot 3y ago
  Any retiree that bought shares in 2016 is living on a yacht with 1000+% gains. The company is literally one of the greatest engines of retail investor wealth creation in history.
  - acdha 3y ago
    So were Enron and Pets.com, until they weren’t. Healthy markets depend on accurate information so regulators care about whether you were knowingly misrepresenting the health of the company, not just whether there was a period afterwards where you could sell at a net profit. Their job is to avoid what happens when a popular stock craters, not worry about the good times.
    - enslavedrobot 3y ago
      Enron and Pets.com? 1) Enron misstated earnings 2) Pets.com did not commit wire fraud. Tesla is one of the most financially healthy companies on Earth. Literally one of the(if not the) fastest growing manufacturing company years by revenue.
      - acdha 3y ago
        > Enron and Pets.com? 1) Enron misstated earnings 2) Pets.com did not commit wire fraud. … but both illustrate in different ways that “number go up” is not sufficient to know about the health of a company. Both had cheerleaders saying exactly what you’re saying now the whole time. In Tesla’s case, that’s important because their P/E has been wildly out of the norm for their industry but they don’t have much in the way of a competitive edge and the higher end market they’re relying on is getting tight. Similarly, they’re making a huge profit on their carbon credits but there is no reason to expect that to scale up or even last long term. The whole play is predicated on turning into a tech company, and that’s why this matters: if they’re saying that high share price is justified because they’re going to sell self-driving cars it’s especially important that company officers are not misleading the public. That share price would collapse if it turned out that they knew they were behind and were dishonestly hyping the stock.
        enslavedrobot 3y ago
        As a PhD Materials Scientist with a business degree, I don't think you understand the Tesla business case. I invite you to read Tesla's SEC filings carefully. I found the business case to be extremely compelling when I bought 3400 shares at 16$. I still find deep value in the stock despite relentless negative sentiment from people who have no idea what an absolute juggernaut the company is. Comparing Tesla to Enron or pets.com is absurd. Tesla is on another planet in comparison. The idea that Tesla investors have been duped is also absurd. I follow the company's developments closely and have driven FSD for years. They have an unassailable advantage in the coming networked renewable energy market and are on track to implement high margin recurring revenue digital services across their class leading hardware products, which include EVs, home storage, and grid scale storage. The latter two have just moved out of the Tesla Roadster era of development and are achieving scale just as solar and wind deployment reaches wide scale adoption. Good luck to all who see promise in a renewable future. Sorry to those who don't get it.
  - 1vuio0pswjnm7 3y ago
    Unfortunately that's not a defense to wire fraud.
rsynnott 3y ago
> investors are supposed to know better. Part of the reason that public companies are regulated far more harshly than private is that not all investors do; a lot of investors are basically just consumers.

acdha 3y ago

Very large investors are supposed to know better but it’s not the 80s and most investors (by number, not wealth) are those same consumers, especially for a stock which has been heavily boosted by Musk’s public persona. When they make lies in official statements like “The person in the driver’s seat is only there for legal reasons. He is not doing anything. The car is driving itself.” or claiming that the car drives better than a human, as Musk did on an earnings call in 2016, the government should be thinking of the retiree who bought a few shares rather than the professional trader who pays consulting engineers to fact-check that marketing.

taylodl 3y ago
Good point - I need to adjust my thinking on who an investor is.
enslavedrobot 3y ago
Any retiree that bought shares in 2016 is living on a yacht with 1000+% gains. The company is literally one of the greatest engines of retail investor wealth creation in history.
- acdha 3y ago
  So were Enron and Pets.com, until they weren’t. Healthy markets depend on accurate information so regulators care about whether you were knowingly misrepresenting the health of the company, not just whether there was a period afterwards where you could sell at a net profit. Their job is to avoid what happens when a popular stock craters, not worry about the good times.
  - enslavedrobot 3y ago
    Enron and Pets.com? 1) Enron misstated earnings 2) Pets.com did not commit wire fraud. Tesla is one of the most financially healthy companies on Earth. Literally one of the(if not the) fastest growing manufacturing company years by revenue.
    - acdha 3y ago
      > Enron and Pets.com? 1) Enron misstated earnings 2) Pets.com did not commit wire fraud. … but both illustrate in different ways that “number go up” is not sufficient to know about the health of a company. Both had cheerleaders saying exactly what you’re saying now the whole time. In Tesla’s case, that’s important because their P/E has been wildly out of the norm for their industry but they don’t have much in the way of a competitive edge and the higher end market they’re relying on is getting tight. Similarly, they’re making a huge profit on their carbon credits but there is no reason to expect that to scale up or even last long term. The whole play is predicated on turning into a tech company, and that’s why this matters: if they’re saying that high share price is justified because they’re going to sell self-driving cars it’s especially important that company officers are not misleading the public. That share price would collapse if it turned out that they knew they were behind and were dishonestly hyping the stock.
      - enslavedrobot 3y ago
        As a PhD Materials Scientist with a business degree, I don't think you understand the Tesla business case. I invite you to read Tesla's SEC filings carefully. I found the business case to be extremely compelling when I bought 3400 shares at 16$. I still find deep value in the stock despite relentless negative sentiment from people who have no idea what an absolute juggernaut the company is. Comparing Tesla to Enron or pets.com is absurd. Tesla is on another planet in comparison. The idea that Tesla investors have been duped is also absurd. I follow the company's developments closely and have driven FSD for years. They have an unassailable advantage in the coming networked renewable energy market and are on track to implement high margin recurring revenue digital services across their class leading hardware products, which include EVs, home storage, and grid scale storage. The latter two have just moved out of the Tesla Roadster era of development and are achieving scale just as solar and wind deployment reaches wide scale adoption. Good luck to all who see promise in a renewable future. Sorry to those who don't get it.
- 1vuio0pswjnm7 3y ago
  Unfortunately that's not a defense to wire fraud.

rsynnott 3y ago

> investors are supposed to know better. Part of the reason that public companies are regulated far more harshly than private is that not all investors do; a lot of investors are basically just consumers.