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Having worked in the stock-trading world and seeing some of the murky things that go on first-hand, I would not be surprised to learn that many of the negative

Having worked in the stock-trading world and seeing some of the murky things that go on first-hand, I would not be surprised to learn that many of the negative comments we see every time Elon Musk is mentioned is due to a concerted effort by short-sellers.

epistasis 11y ago
I would think that too, except for all the comments that are so financially ignorant. Unless the shortsellers have misread the HN audience and think that they don't understand these things.
- polymatter 11y ago
  > so financially ignorant I agree, and specifically I think of the confusion between gross profit margin and net operating cashflow. Tesla makes money on every car sold (as they actually have a gross profit) but have been spending cash really fast (as they have a negative cashflow). All this really tells you is that Tesla is investing a lot of money, which is to be expected for a company that is trying to spearhead a paradigm shift within the entire automotive industry. Also, since one big weakness in Tesla is whether it relies on government subsidies and loans for its continued survival. Thats something I don't understand and if I had a horse in this race, I'd be weary of a company that relies on the whims of political support in order to survive.
  - mikeash 11y ago
    Something is pushing this "Tesla loses money" angle hard. Since I bought mine, I've discovered that a lot of people who know very little about the company "know" that they make a loss on every car sold. Regarding subsidies, the "good" news there is that at least in the US, there isn't much in the way of uncertainty, because the US federal subsidy starts to drop off at 200,000 units per manufacturer and is unlikely to be expanded. Given how quickly they're moving, they'll probably hit that within the next few years and one way or another they'll have to learn to do without. But at least they won't be waiting for politicians to drop the knife on them.
  - forgetsusername 11y ago
    >"Tesla makes money on every car sold (as they actually have a gross profit)" You knock people for financial ignorance, then say this? You realize that gross margin is sales less cost of goods sold? And that cost of goods does not include things like paying your employees, interest on debt used to expand, the cost of running the factories, etc etc? I come from a retail environment where our gross margin is typically 25-35%, while our profit margin is about 2-4%. So saying that Tesla "makes money on every car sold" simply because they have "gross profit" is about as fast and loose with "profit" as you can get. Of course, nobody in the finance world would think that...
  - makomk 11y ago
    Having a gross profit is not the same thing as making money on every car sold because gross profits don't include a whole bunch of per-unit costs like sales staff, shipping, after-sales support, repairs and recalls, etc - basically, any costs incurred after the moment the car rolls off the production line aren't included.
ChuckMcM 11y ago
Don't be hard on them, I made a lot of money off Tesla short sellers :-)
x5n1 11y ago
I personally think Telsa's car business is bound to fail when the majors decide to compete. But that's a more long term strategy.
- Joona 11y ago
  Why couldn't Tesla become the Ferrari of electric cars?
  - mikeash 11y ago
    Because its CEO won't settle for that, and will insist on making it to the mass market or die trying.
  - mlakewood 11y ago
    I think the real question is why would it want to? Ferrari is a specialist marque that, like most other super luxury brands, the parent company (in this case Fiat I believe) keeps around for the glow it gives its cheaper cars. There really isnt a lot of money is super expensive cars compared to the mass market. Have a look at the history of all the expensive car companies.. none of them are still standing.
- epistasis 11y ago
  Having dealt with lots of the "majors'" new car models lately in rentals, I doubt that they have much to bring to the table anymore. The amount of stupidity in design is astounding. I think that once Tesla scales, it will completely demolish any of the other US car companies. Toyota and Honda may be able to compete. I'm really really hungry for competence in both manufacturing and design, which is something that is sorely lacking in the current large US car companies. Based on their current track record, Tesla has a much better chance of delivering than Ford or GM.
  - kbenson 11y ago
    > Having dealt with lots of the "majors'" new car models lately in rentals, I doubt that they have much to bring to the table anymore. I think it's more a matter of being shortsighted. If the ads from this season of the Startup podcast are any indication, they are so busy focusing on small pieces of the experience (such as having designing wear suits to simulate feeling old, etc) that they are missing the major advances. It's somewhat understandable, the major automakers have been making basically interchangeable cars for a few years, so spending time to enhance the entire experience in many small ways seems to make sense. That is, until some upstart shows up with something radically better.
soup10 11y ago
They are in a lot of pain right now. Something like 25% of the float is short interest and the stock keeps going up. It may not matter that the price is so divorced from the fundamentals because people are buying it for the long term gamble.
nationcrafting 11y ago
You might be right. Very unusual comments indeed. And ridiculous, too. Everyone's entitled to their opinion, but so much commenting here is literally just a catalogue of received ideas. Tesla are on a mission to solve massive problems for humankind while taking into account modern humans' lack of commitment to solving those problems in a way that would feel like a step back, or that would create discomfort. Tesla's existence as a market solution to the oil and pollution problems is evidence that you don't always need political coercion to solve problems like externalities: Tesla's cars are not only electric cars - i.e. the answer to a problem that could potentially destroy civilisation as we know it - they are also great cars, by any "petrolhead" standard. As a company and an investment, Tesla's long term mission, its strategy and its step-by-step tactics have been presented in a way that is extremely rare for a company. Most of the work I do for brands this size involves working with a 5-year plan that is nowhere near as clear as Tesla's, and the plans are 5-years because that's when the owners' exit plan kicks in. Tesla's strategy set a clear path for 15 years at least. So what's not's not to like? I think many investors feel they may have missed the boat on the next great world company. It's quite normal to sit on the edge for a while, to miss out on the opportunity, and to then find a dozen reasons to tell oneself it was good to pass on it.
- Cthulhu_ 11y ago
  I hate to be a cynic, but, you know that your idealist, optimistic post could be seen as propaganda intended to boost trust (and by extension the price) in/of Tesla's stocks, right? Just trolling, I agree with your points. I'm just saying that any posts about publicly traded companies should be taken with a grain of salt.
sliverstorm 11y ago
That's the opposite of the impression I get, for a while I was pretty sure HN was a cult that worshipped their Lord and Savior, Elon Musk :)
kbenson 11y ago
If almost all the downvoted top-level comments weren't from accounts with over 1k karma (or very close), then I would be tempted to believe you. Since they are, I think it's more likely in this case that he, and the companies he runs, are very polarizing. That said, the reason he's polarizing may be because of other information that's readily available due to a concerted effort by short-sellers.
flyinghamster 11y ago
Don't forget there are also a lot of ultra-wealthy folks who have a vested interest in the status quo. The Koch brothers and their fellow carbon moguls really don't want people moving over to electric cars (or any other green tech for that matter), and they'll do anything they can to discourage people from adopting them. If I had the right circumstances to make it feasible, I wouldn't hesitate getting a Model S.
forgetsusername 11y ago
>""comments we see every time Elon Musk is mentioned is due to a concerted effort by short-sellers." Oh, brother. This article is from a massive, mainstream financial news site, and is reposted all over the internet. But the short-sellers come here, to a niche tech site, to try to influence people to...what exactly?
- chipsy 11y ago
  A perfect example of bashing.
  - jblow 11y ago
    From a newly-created account, no less... sigh.
    - forgetsusername 11y ago
      I'm away on my iPad, and don't have access to my account information. But you're right, I don't post here often anymore; the community isn't great.
      - rizwank 11y ago
        Where do you go?
- Cthulhu_ 11y ago
  > to try to influence people to...what exactly? Buy / sell Tesla stocks; the general audience here is the hip Silicon Valley startup crowd, of which some are 20-some year old instant-millionaires whose hip startup was bought by Google/Facebook/Paypal/etc, or who are making over 100K a year. You probably shouldn't underestimate the net worth and expendable income of the crowd here, or how easily they're influenced. It doesn't take much to get a stock to travel in an upwards direction, and even the slightest increase will cause some people or organizations to make a lot of money.

epistasis 11y ago

I would think that too, except for all the comments that are so financially ignorant. Unless the shortsellers have misread the HN audience and think that they don't understand these things.

polymatter 11y ago
> so financially ignorant I agree, and specifically I think of the confusion between gross profit margin and net operating cashflow. Tesla makes money on every car sold (as they actually have a gross profit) but have been spending cash really fast (as they have a negative cashflow). All this really tells you is that Tesla is investing a lot of money, which is to be expected for a company that is trying to spearhead a paradigm shift within the entire automotive industry. Also, since one big weakness in Tesla is whether it relies on government subsidies and loans for its continued survival. Thats something I don't understand and if I had a horse in this race, I'd be weary of a company that relies on the whims of political support in order to survive.
- mikeash 11y ago
  Something is pushing this "Tesla loses money" angle hard. Since I bought mine, I've discovered that a lot of people who know very little about the company "know" that they make a loss on every car sold. Regarding subsidies, the "good" news there is that at least in the US, there isn't much in the way of uncertainty, because the US federal subsidy starts to drop off at 200,000 units per manufacturer and is unlikely to be expanded. Given how quickly they're moving, they'll probably hit that within the next few years and one way or another they'll have to learn to do without. But at least they won't be waiting for politicians to drop the knife on them.
- forgetsusername 11y ago
  >"Tesla makes money on every car sold (as they actually have a gross profit)" You knock people for financial ignorance, then say this? You realize that gross margin is sales less cost of goods sold? And that cost of goods does not include things like paying your employees, interest on debt used to expand, the cost of running the factories, etc etc? I come from a retail environment where our gross margin is typically 25-35%, while our profit margin is about 2-4%. So saying that Tesla "makes money on every car sold" simply because they have "gross profit" is about as fast and loose with "profit" as you can get. Of course, nobody in the finance world would think that...
- makomk 11y ago
  Having a gross profit is not the same thing as making money on every car sold because gross profits don't include a whole bunch of per-unit costs like sales staff, shipping, after-sales support, repairs and recalls, etc - basically, any costs incurred after the moment the car rolls off the production line aren't included.

ChuckMcM 11y ago

Don't be hard on them, I made a lot of money off Tesla short sellers :-)

x5n1 11y ago

I personally think Telsa's car business is bound to fail when the majors decide to compete. But that's a more long term strategy.

Joona 11y ago
Why couldn't Tesla become the Ferrari of electric cars?
- mikeash 11y ago
  Because its CEO won't settle for that, and will insist on making it to the mass market or die trying.
- mlakewood 11y ago
  I think the real question is why would it want to? Ferrari is a specialist marque that, like most other super luxury brands, the parent company (in this case Fiat I believe) keeps around for the glow it gives its cheaper cars. There really isnt a lot of money is super expensive cars compared to the mass market. Have a look at the history of all the expensive car companies.. none of them are still standing.
epistasis 11y ago
Having dealt with lots of the "majors'" new car models lately in rentals, I doubt that they have much to bring to the table anymore. The amount of stupidity in design is astounding. I think that once Tesla scales, it will completely demolish any of the other US car companies. Toyota and Honda may be able to compete. I'm really really hungry for competence in both manufacturing and design, which is something that is sorely lacking in the current large US car companies. Based on their current track record, Tesla has a much better chance of delivering than Ford or GM.
- kbenson 11y ago
  > Having dealt with lots of the "majors'" new car models lately in rentals, I doubt that they have much to bring to the table anymore. I think it's more a matter of being shortsighted. If the ads from this season of the Startup podcast are any indication, they are so busy focusing on small pieces of the experience (such as having designing wear suits to simulate feeling old, etc) that they are missing the major advances. It's somewhat understandable, the major automakers have been making basically interchangeable cars for a few years, so spending time to enhance the entire experience in many small ways seems to make sense. That is, until some upstart shows up with something radically better.

soup10 11y ago

They are in a lot of pain right now. Something like 25% of the float is short interest and the stock keeps going up. It may not matter that the price is so divorced from the fundamentals because people are buying it for the long term gamble.

nationcrafting 11y ago

You might be right. Very unusual comments indeed. And ridiculous, too. Everyone's entitled to their opinion, but so much commenting here is literally just a catalogue of received ideas. Tesla are on a mission to solve massive problems for humankind while taking into account modern humans' lack of commitment to solving those problems in a way that would feel like a step back, or that would create discomfort. Tesla's existence as a market solution to the oil and pollution problems is evidence that you don't always need political coercion to solve problems like externalities: Tesla's cars are not only electric cars - i.e. the answer to a problem that could potentially destroy civilisation as we know it - they are also great cars, by any "petrolhead" standard. As a company and an investment, Tesla's long term mission, its strategy and its step-by-step tactics have been presented in a way that is extremely rare for a company. Most of the work I do for brands this size involves working with a 5-year plan that is nowhere near as clear as Tesla's, and the plans are 5-years because that's when the owners' exit plan kicks in. Tesla's strategy set a clear path for 15 years at least. So what's not's not to like? I think many investors feel they may have missed the boat on the next great world company. It's quite normal to sit on the edge for a while, to miss out on the opportunity, and to then find a dozen reasons to tell oneself it was good to pass on it.

Cthulhu_ 11y ago
I hate to be a cynic, but, you know that your idealist, optimistic post could be seen as propaganda intended to boost trust (and by extension the price) in/of Tesla's stocks, right? Just trolling, I agree with your points. I'm just saying that any posts about publicly traded companies should be taken with a grain of salt.

sliverstorm 11y ago

That's the opposite of the impression I get, for a while I was pretty sure HN was a cult that worshipped their Lord and Savior, Elon Musk :)

kbenson 11y ago

If almost all the downvoted top-level comments weren't from accounts with over 1k karma (or very close), then I would be tempted to believe you. Since they are, I think it's more likely in this case that he, and the companies he runs, are very polarizing. That said, the reason he's polarizing may be because of other information that's readily available due to a concerted effort by short-sellers.

flyinghamster 11y ago

Don't forget there are also a lot of ultra-wealthy folks who have a vested interest in the status quo. The Koch brothers and their fellow carbon moguls really don't want people moving over to electric cars (or any other green tech for that matter), and they'll do anything they can to discourage people from adopting them. If I had the right circumstances to make it feasible, I wouldn't hesitate getting a Model S.

forgetsusername 11y ago

>""comments we see every time Elon Musk is mentioned is due to a concerted effort by short-sellers." Oh, brother. This article is from a massive, mainstream financial news site, and is reposted all over the internet. But the short-sellers come here, to a niche tech site, to try to influence people to...what exactly?

chipsy 11y ago
A perfect example of bashing.
- jblow 11y ago
  From a newly-created account, no less... sigh.
  - forgetsusername 11y ago
    I'm away on my iPad, and don't have access to my account information. But you're right, I don't post here often anymore; the community isn't great.
    - rizwank 11y ago
      Where do you go?
Cthulhu_ 11y ago
> to try to influence people to...what exactly? Buy / sell Tesla stocks; the general audience here is the hip Silicon Valley startup crowd, of which some are 20-some year old instant-millionaires whose hip startup was bought by Google/Facebook/Paypal/etc, or who are making over 100K a year. You probably shouldn't underestimate the net worth and expendable income of the crowd here, or how easily they're influenced. It doesn't take much to get a stock to travel in an upwards direction, and even the slightest increase will cause some people or organizations to make a lot of money.