Articles re Tesla—Fact or Fiction?

[Lump]

Oh Oh, you did a No No. That a WSJ article with Murdoch influence behind it.

 

[maoing]

Who's Murdoch? The market doesn't distinguish who's behind I think.

 

[Robert.Boston]

My question about the article is why was it posted in the short term thread? Was it anticipated that there was something in it that would alter the course of the share price? I didn't view it as having anything in it that someone would trade on.

And that's really why I moved it. Yes, I have an agenda to keep the Short-Term Price Movements discussions be about short-term price movements and the things that are likely causing, or will cause, them. The WSJ has historically had some very unflattering coverage of Tesla, and so the article ended up on this particular dissection table.

I have re-read the WSJ article with my FUD-antennae gain increased, and I'm going to revise my earlier opinion and say it's appropriately here. Why? The article does get its facts right, but let's look at some language choices:

1. The very title of the article. Tesla's own statements are that it's targeting (a) unit sales and (b) gross margin. Why does the WSJ think it's trying to maximize revenue? Profit, maybe, but there's nothing wrong with maximizing profit. Of course, I realize that authors don't always choose their article's title, but that just points to institutional bias.
2. "The Palo Alto, Calif., auto maker launched the dual-motor P85D late last year at a price designed to increase its average transaction prices and potentially bring the money-losing company closer to steady profitability." The "money-losing company" phrase is a clear signal we're heading into FUD-world: the company is profitable before R&D, but it's investing heavily, as young companies should. Now parse the sentence; the author is putting forward a thesis that Tesla added a high-priced car to increase revenue, suggesting that there is limited demand and ergo Tesla needs to pump as much cash out of each of the few potential customers.
3. "Tesla’s online ordering tool this week shows the Model S P85D is available for delivery in late March, while the $71,000 and up single-electric motor Model S is first available in May. A spokeswoman said the company has prioritized deliveries of the P85D. The short wait time—in the past year deliveries have been as long as three months—raises concerns about the strength of demand for Tesla’s pricey cars." Again, the "pricey car" epithet gives a pulse on the FUD meter. Looking at the implied logic of these sentences, though, and it's clear that the author is implicitly rejecting Tesla's explanation. The delivery time for a standard S is still about three months, as it was "in the past year," but if you want a P85D, you'll get it sooner. The facts don't back up his assertion.
4. "This week, Tesla confirmed it is trimming staff in China amid weaker-than-expected demand there." This is subtle, but the WSJ is speculating that the layoffs are related to weak demand. We actually don't know, and it's just as likely, given the executive departures, that new management decided that they were over-staffed even to meet initially forecast demand.
5. Sequencing of facts. The author presents some speculative evidence about demand at the beginning of the article, but then presents the fact that Tesla has a 10,000-deep backlog of orders for the Model S. Odd placement; the author reaches a conclusion and only later introduces contradicting facts from the company. I hear an implicit "and Tesla is lying about the backlog" from this choice.

 

[Curt Renz]

FUD does not mean untrue, however to some people there is that connotation.

There was clearly a spin on this one, but not as bad as most.

My question about the article is why was it posted in the short term thread? Was it anticipated that there was something in it that would alter the course of the share price? I didn't view it as having anything in it that someone would trade on.

TSLA had been steady in the green around $192 for nearly an hour, then quickly fell into the red under $190 shortly after the article was published online. The spin of the article was that a shortened wait time implies reduced demand:

“… but the short waiting time raises additional concerns about the strength of demand for Tesla's products…”

“…Earlier this week, Tesla said it is trimming staff in China, amid weak demand…”

“…Still, investors are hungry for more details about the company's progress toward meeting its goals, particularly after Tesla fell short of its delivery target in 2014…”

“…One of the biggest question marks facing the company relates to inventory. Credit Suisse auto analyst Dan Galves said on Monday that his firm estimates inventory of unsold vehicles is 1,000 vehicles. CVC Research pegs inventory at 3,000 vehicles…”

“…the level of unsold sedans is the latest indication that the company's build-to-order model is under pressure…”

No mention was made of the facts that Tesla normally hastens the delivery of more expensive models, and works hard to meet delivery targets during the last month of a quarter. No consideration that having some non-customized cars ready for quicker delivery is likely an option that would have been made available eventually. No thought that an acceleration of production may have been a factor, and that might be a good thing. No hint that shorter waiting times might encourage more demand.

 

[maoing]

Instead of folks delligently calling FUD or fighting with FUD here or over SA. Actually all those are "nothing" to do with stock price, the most powerful weapon is TM's execution. If TM can meet or beat guidance in very quarter, then the market will just simply ignore all those FUDs. Before that, FUD will fourish for a while. Just IMHO.

I clearly remembered there was not so much FUD calling last year in this forum when stock price in bull mode, TSLA will be up and down regardless FUDs actually.

 

[sub]

A lot of the recent news is not so much FUD as it is confusion. We have to remember that we are tremendously better informed about Tesla than those shorting the stock (forget the bias) and think just how much less informed random financial or, even worse, auto journalists are.

Take, for instance, the latest piece about P85D delivery schedule. To know that this is likely a non-issue you need to know that Tesla has always heavily prioritized delivery of higher-end models, that Tesla always focuses on US sales at the end of the quarter, realize that the timing of these deliveries corresponds with the end of the quarter, and understand that the P85D is in a price category where even a 4 week backlog is impressive (given the addressable market).

These points are obvious to us, but at best the journalist who wrote that piece recognizes the final point (though he gave no indication of that) because it is pretty intuitive. The spokesperson for Tesla did point out the first point (that they prioritize higher-end cars), but it is easy to disregard that if you aren't familiar with the history of the company like we are. You can easily write it off as an excuse given that everybody knows Tesla's demand is wearing thin.

I think it is fine for us to pick apart these articles. But, there seems to be a tendency that has grown in recent months to attribute malice where stupidity (or really just the fact that these people have a life) is much more likely. And, rather than moan and complain about it, realize that this right here is what every investor dreams about. To know more than the rest of the market. This is your chance to make money, because there is an imbalance in information about the future of this company. We have more information and a higher quality understanding of it.

The bigger and better known and more popular Tesla (and TSLA) get, the harder and harder it is going to be to have such an advantage.

it seems to me that if some of the misinformation is coming from ignorance, there would be misinformation over stating tesla success and there doesn't seem to be much if any errors made in Tesla's favor.

i have no problem with the discussion of negatives on tsla, I think what bothers me and some others on this thread is the "sky is falling" reaction to everything. I'm guessing it has something to do with the varying degrees of emotional stability within our species

 

[Robert.Boston]

Moderator's Note

I'm sticking to our guns that discussions about articles needs to be split out from the Short-Run Price Movements thread. That thread moves so quickly it's impossible to have any focused analysis there. I know that some of you prefer to be able to read one, and only one thread, but such a multi-stranded conversation is impossible for anyone not reading in real-time to make sense of.

That said, I don't mind if someone (emphasis on ONE) puts a post in the Short-Term thread flagging that a new article about Tesla came across the wire. A WSJ piece can move the price. But let's thrash it out here, please.

Although some liked the initial name of the thread, "FUD Bunker", I agree that it's unduly prejudicial (albeit clever). I've changed it to a more neutral "Articles re Tesla—FUD or fact?"

My view is that moving discussions to this thread is not "burying" the discussion. This is a sticky thread, right up there with Short-Term and Investing Strategies.

 

[NigelM]

TSLA had been steady in the green around $192 for nearly an hour, then quickly fell into the red under $190 shortly after the article was published online. The spin of the article was that a shortened wait time implies reduced demand:

“… but the short waiting time raises additional concerns about the strength of demand for Tesla's products…”

“…Earlier this week, Tesla said it is trimming staff in China, amid weak demand…”

“…Still, investors are hungry for more details about the company's progress toward meeting its goals, particularly after Tesla fell short of its delivery target in 2014…”

“…One of the biggest question marks facing the company relates to inventory. Credit Suisse auto analyst Dan Galves said on Monday that his firm estimates inventory of unsold vehicles is 1,000 vehicles. CVC Research pegs inventory at 3,000 vehicles…”

“…the level of unsold sedans is the latest indication that the company's build-to-order model is under pressure…”

No mention was made of the facts that Tesla normally hastens the delivery of more expensive models, and works hard to meet delivery targets during the last month of a quarter. No consideration that having some non-customized cars ready for quicker delivery is likely an option that would have been made available eventually. No thought that an acceleration of production may have been a factor, and that might be a good thing. No hint that shorter waiting times might encourage more demand.

You put those points in quotation marks but some of them are not even in the article.

 

[anticitizen13.7]

Who's Murdoch? The market doesn't distinguish who's behind I think.

http://en.wikipedia.org/wiki/Rupert_Murdoch

Keith Rupert Murdoch /ˈmɜrdɒk/,[SUP][8][/SUP] AC, KCSG (born 11 March 1931) is anAustralian American business magnate. Murdoch became managing director of Australia's News Limited, inherited from his father Sir Keith Arthur Murdoch in 1952.[SUP][6][/SUP][SUP][9][/SUP] He is the founder, Chairman and CEO of global media holding company News Corporation, the world's second-largest media conglomerate, and its successors News Corp and 21st Century Fox after the conglomerate split on 28 June 2013.[SUP][10][/SUP][SUP][11][/SUP][SUP][12][/SUP][SUP][13][/SUP]In 1986, keen to adopt newer electronic publishing technologies, he consolidated hi UK printing operations in Wapping, causing bitter industrial disputes. His News Corporation acquired Twentieth Century Fox (1985), HarperCollins (1989)[SUP][14][/SUP]and The Wall Street Journal (2007). He formed BSkyB in 1990 and during the 1990s expanded into Asian networks and South American television. By 2000, Murdoch's News Corporation owned over 800 companies in more than 50 countries with a net worth of over $5 billion.

Murdoch's views and media empire are generally very conservative and the audiences of Murdoch media outlets predisposed to be opposed to Tesla Motors. Murdoch's corporations and business associates have been implicated in a distasteful scandal involving cell phone hacking.

News Corp. and its related companies have a conservative agenda and they are pretty open about it.

 

[Auzie]

I'm sticking to our guns that discussions about articles needs to be split out from the Short-Run Price Movements thread. That thread moves so quickly it's impossible to have any focused analysis there. I know that some of you prefer to be able to read one, and only one thread, but such a multi-stranded conversation is impossible for anyone not reading in real-time to make sense of.

That said, I don't mind if someone (emphasis on ONE) puts a post in the Short-Term thread flagging that a new article about Tesla came across the wire. A WSJ piece can move the price. But let's thrash it out here, please.

Although some liked the initial name of the thread, "FUD Bunker", I agree that it's unduly prejudicial (albeit clever). I've changed it to a more neutral "Articles re Tesla—FUD or fact?"

My view is that moving discussions to this thread is not "burying" the discussion. This is a sticky thread, right up there with Short-Term and Investing Strategies.

The thread title "Articles on Tesla - critical analysis" may go a long way.

Agree with Nigel's comments re being prejudicial by having FUD in thread title.

 

[Drax7]

In a vacuum of fundamental data, FUD reigns.
Elon does not want to publish monthly orders production and deliveries , allowing
for FUD to thrive.

 

[SteveG3]

http://en.wikipedia.org/wiki/Rupert_Murdoch



Murdoch's views and media empire are generally very conservative and the audiences of Murdoch media outlets predisposed to be opposed to Tesla Motors. Murdoch's corporations and business associates have been implicated in a distasteful scandal involving cell phone hacking.

News Corp. and its related companies have a conservative agenda and they are pretty open about it.

The Wall Street Journal was sold from family ownership (~20 family members) to Rupert Murdoch about 8 years ago. Concerns among these family members that Murdoch would turn the paper into a mouthpiece for his personal
agenda was high enough to give Rupert a firm no. Over months he persuaded them he would not meddle with the content of WSJ (his offer may have increased some, but I don't remember a substantial increase). In the end he won over enough of the family to buy the paper.

 

[Drax7]

The ny times is a liberal rag, and very open about it too. Their views on tesla have been
pretty ugly if I recall .
the Sulzberger family pretty much runs the times, and they are not carrying card
members of the tea party.

cory johnson at Bloomberg despises musk and tesla, and Bloomberg is pretty liberal.

Frankly i I don't think any of these ceo cares a hoot about tesla.

i am a conservative and in 40 years of reading the wsj and Barrons I have never made a penny
that I can attribute to their reports.

 

[Curt Renz]

You put those points in quotation marks but some of them are not even in the article.

I pasted those lines from the Dow Jones (parent of WSJ) article by Mike Ramsey as it appeared in my TD Ameritrade account. In that account there also appears a shortened version by Mike Ramsey for MarketWatch (another Dow Jones company). I now see that Ramsey wrote a third version for WSJ.

 

[NigelM]

I pasted those lines from the Dow Jones (parent of WSJ) article by Mike Ramsey as it appeared in my TD Ameritrade account. In that account there also appears a shortened version by Mike Ramsey for MarketWatch (another Dow Jones company). I now see that Ramsey wrote a third version for WSJ.

I wondered if you were reading something different. Might be worth linking to the other version if possible.

 

[SteveG3]

Who's Murdoch? The market doesn't distinguish who's behind I think.

Rupert owns Wall Street Journal, Barrons and MarketWatch. There are times when the three of them push out many articles at once on some FUD. Not uncommon for them to report on the others' reporting. For those unaware of the connection (as you weren't) it it can be used to try to give the impression that a FUD narrative is "what everyone thinks" (sort a much more potent form of "sock puppets" in online message boards). Moreover, the three of them once had large credibility for many people (particularly WSJ and Barrons). I suspect what anyone of them reports on, and more so what all three report on, can influence what other media outlets believe is a credible interpretation/story meriting coverage.

- - - Updated - - -

The ny times is a liberal rag, and very open about it too. Their views on tesla have been
pretty ugly if I recall .
the Sulzberger family pretty much runs the times, and they are not carrying card
members of the tea party.

cory johnson at Bloomberg despises musk and tesla, and Bloomberg is pretty liberal.

Frankly i I don't think any of these ceo cares a hoot about tesla.

i am a conservative and in 40 years of reading the wsj and Barrons I have never made a penny
that I can attribute to their reports.

Politics can make strange bed fellows. Politics and money even more of the same right? I would guess Cory Johnson does not have some huge political agenda. Either personal hatred of Elon, $ from hedge fund world he used to be in or entrenched interests Tesla can impact. NYTimes? My recollection is Broder was not an auto report but rather that he'd covered the energy industry for years.


All this said, I certainly can only speculate on motives. I am, however, highly confident though that Cory Johnson, Barrons, WSJ, and MarketWatch have had an agenda to damage Tesla.

 

[jhm]

You put those points in quotation marks but some of them are not even in the article.

Which ones? I could find all but the last one. What I did find was the following:

Whatever the level of unsold inventory, the company traditionally has followed a build-to-order model. Last month, Tesla said in a regulatory filing it change how it refers to finished goods. Once only including cars in transit to customers, the term was broadened to include cars available for immediate sale.
Barclays auto analyst Brian Johnson called that move “a departure from the past—indicating that Tesla production is not as much a build-to-order model as it has been historically.”

Could it be that WSJ has edited this article?

In any case, the author is following the spurious line of attack that somehow the inclusion of vehicles ready for sale in finished goods inventory represents a departure from made-to-order. This author is parroting obvious FUD material. While talking with the Tesla spokesperson, did the author think to ask for any clarification on the finish good inventory theory? If not, he is not doing his job as a journalist. But if he did and chose not to report a correction to this FUD narrative, then I would question his ethics.


On balance, this author is bringing no news worthy facts to light, but is simply rehearsing the FUD narrative from last week.

 

[Curt Renz]

The ny times is a liberal rag, and very open about it too. Their views on tesla have been
pretty ugly if I recall .
the Sulzberger family pretty much runs the times, and they are not carrying card
members of the tea party.

cory johnson at Bloomberg despises musk and tesla, and Bloomberg is pretty liberal.

Frankly i I don't think any of these ceo cares a hoot about tesla.

i am a conservative and in 40 years of reading the wsj and Barrons I have never made a penny
that I can attribute to their reports.

Indeed it's unfortunate that in our modern politically polarized country there is a tendency to blame the other side for all wrongs. The broadcast TV stations for which I worked went out of their ways to appear unbiased. The FCC could have revoked their licenses and broadcast frequencies, if we misbehaved. However, there are no similar government restraints on the print, cable or internet media. Their lifeblood is advertising money, no matter what the owners' political persuasions. Being a manufacturer that does no media advertising, while disrupting industries that heavily advertise, sets it up as a target for negative media exploitation. The media outlet owners do not have to explicitly put out the word. The needs of a corporation becomes obvious through its culture and the way the employees are commended or rewarded.

 

[NigelM]

Which ones? I could find all but the last one.

If you don't take my word for the quotes not being in the original article, try Google page search (Ctrl F on the article page if you use Google Chrome); you'll find that the first quote Curt's posted isn't in there at all, the second quote was in there but worded differently, the third quote isn't there, the fourth quote was in there but worded differently, the fifth quote wasn't in there.

Could it be that WSJ has edited this article?

No, although I see they've updated the headline a couple of times now. If you read Curt's later post you'll see he was quoting from a different version of the article with a different source.

- - - Updated - - -

Since I can't link you to my TD Ameritrade account, I'll simply paste the article.

Curt, I'm happy as always to take your word for it; we're not allowed though to copy and paste an entire article without the copyright holders confirmed approval.

 

[Curt Renz]

If you don't take my word for the quotes not being in the original article, try Google page search (Ctrl F on the article page if you use Google Chrome); you'll find that the first quote Curt's posted isn't in there at all, the second quote was in there but worded differently, the third quote isn't there, the fourth quote was in there but worded differently, the fifth quote wasn't in there.



No, although I see they've updated the headline a couple of times now. If you read Curt's later post you'll see he was quoting from a different version of the article with a different source.

- - - Updated - - -



Curt, I'm happy as always to take your word for it; we're not allowed though to copy and paste an entire article without the copyright holders confirmed approval.

Please feel free to delete my post with the pasted article, Nigel. As a former financial news reporter, I realized that might be a concern, but news services expect a newswire version will be copied and are not likely to complain.

Meanwhile, here’s my first quoted line from the newswire version:

“… but the short waiting time raises additional concerns about the strength of demand for Tesla's products…”

And here’s how it appears in the Wall Street Journal version that I found:

“…The short wait time—in the past year deliveries have been as long as three months—raises concerns about the strength of demand for Tesla’s pricey cars…”

Sometime these rewrites are done by the author and at other times by someone else. In any event, only Mike Ramsey’s byline appears on the three versions I’ve seen, all published by Dow Jones (Rupert Murdoch) companies.