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Elon Musk vs. Short sellers

Discussion in 'TSLA Investor Discussions' started by jesselivenomore, Jun 18, 2018.

  1. SFInvestor21

    SFInvestor21 Member

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    Out of curiosity did you read the judgement issued that allowed the lawsuit to go forward related to Tesla’s acquisition of Solarcity??

    It might change your mind about the company’s destiny. It had insufficient cash flow to service its debt and was a poorly run company. Musk controlled the entire acquisition process even though the board deferred the proposed acquisition several times. Musk bailed out SpaceX (who owned Solarcity bonds), himself and his relatives who all owned equity/bonds. Not ethical and shows poor governance.
     
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  2. Zhelko Dimic

    Zhelko Dimic Careful bull

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    I'm wondering if you actually read post to which you're responding in its entirety, as you are making some points that were already made in the post... Are you a designated short of the week?
     
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  3. SFInvestor21

    SFInvestor21 Member

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    I did, the author is giving to much credence to short sellers bring down stocks. Solarcity would have gone bust even if short selling was illegal. Also saying Chanos is some evil short seller is ridiculous. The guy has uncovered tons of corporate fraud which is more than anyone on these forums can say.
     
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  4. Deeppurple

    Deeppurple Member

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    TSLA long would be a good “charity” plus you will like get to rip the benefits, while also helping the cause.i am maxed out on TSLA, and just ordered my second one, MX 100D.

    There is a fenominal and unjustified attachment of the uneducated public to the fossil fuels, I think it’s well planned and Tesla should also be concerned about possible sabotages from the oil-rich regimes.
    Interesting thread, thanks.
     
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  5. Electroman

    Electroman Active Member

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    Let me amend that. If your only goal is to make money - hook or crook, lies or deceit - then you may have a hard time believing anyone else could have any other goal (not a comment on Reality, but shorts in general)

    So looks like that is why these guys are now resorting to more drastic measures - sabotage. I always suspected it is only a matter of time this would happen. Like a desperate drug addict denied his daily dose would resort to anything to get his hands on, the shorts are getting desperate. Anything that can bring the stock down is game here.
     
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  6. UrsS

    UrsS Member

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    Are you taking over for @Reality?
     
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  7. pz1975

    pz1975 Member

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    New shift starting at the short factory it seems.
     
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  8. Dwdnjck

    Dwdnjck Member

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  9. Dwdnjck

    Dwdnjck Member

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    That is not true. I personally was responsible for uncovering Medi Care Fraud in the medical lab business that saved hundreds of millions of dollars. My two whistleblower cases recovered $150 million and others followed for even more.
     
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  10. bambam4171

    bambam4171 Member

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    This thread is [insert most extreme swearwords here] awesome, thank you very much for this!
     
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  11. TradingInvest

    TradingInvest Member

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    SFInvestor21, first please google the definition of FUD. But maybe you already know it because you are actively spreading FUD.

    A few facts regarding the SolarCity deal:

    1. The most important piece of evidence: even without Elon's vote, 85% of Tesla's shareholders voted FOR the Tesla/SolarCity merger. Do you understand the power of this voting result? In case you didn't know, Tesla disclosed this potential merger to shareholders in the early stage so every shareholder could have time to understand and make a fully informed decision. With shorts like Jim Chanos ponding the table everyday and explaining why it's a bad deal for Tesla, shareholders had plenty time to look at every potential drawback of the deal.

    2. On Tesla's 2006 Master Plan, there is an item called "Provide solar power". Tesla has long planned to have a solar unit, it's not a sudden idea to buy SolarCity. SolarCity has unique value to Tesla. Elon likes to do Giga scale productions (car, energy storage, and solar energy). SolarCity has a Gigafactory in Buffalo which has access to low cost hydrapower energy, also the factory only costs $1 a year to rent. Put everything aside, this factory is super valuable for Tesla's Master Plan. SolarCity also has other assets that fit perfectly as the energy unit under Tesla. Most of SolarCity's debt was in solar bond, backed by income streams from installed solar panels. Today when I look at the $2.6B deal, I still think it's a great deal for Tesla from long term view. It will generate a lot of positive cashflow in the long run. Majority of Tesla shareholders focus on longterm economics and understand the value. Tesla is now testing/perfecting the solar roof. Based on the early results I saw online, (Yes it's already installed on some houses), this product makes a lot of sense. I am personally waiting to buy the solar roof.

    3. For those who are not familiar with the matter, before merger, Elon was never the CEO of SolarCity and his involvement with SolarCity's day-to-day business was very limited. If Tesla didn't buy SolarCity, I have no doubt Elon would have taken SolarCity private and run it into a highly successful solar energy company. Elon has the capability and financial resource to do that. Unfortunately that would be a loss for Tesla shareholders. When I picked up my Model 3, I saw several customers talking to the rep discussing potential installation of solar panels/roofs. Now Tesla is becoming a one-stop shop for all the energy needs: cars, solar, energy storage.

    Shorts say Tesla lose money on every car, and lose money on every solar installation. We will see what will happen in the next 6 months and the next few years.
     
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  12. Oil4AsphaultOnly

    Oil4AsphaultOnly Active Member

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    You should read OP's link to the Fairfax case. Your hero Chanos was complicit in the attempted destruction of a legitimate business and the innocent lives of all its employees and families.
     
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  13. ggr

    ggr Roadster R80 537, SigS P85 29, M3P 80k

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    Yes, as far as I know Chanos had exactly one good call, which just happened to be Enron.
     
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  14. jesselivenomore

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    #114 jesselivenomore, Jun 18, 2018
    Last edited: Jun 18, 2018
    Profit and Beyond


    As long as Tesla depends on access to capital to survive, it will have certain characteristics of a financial company - venerable to short sellers and market sentiment.(and often times market sentiment caused by short sellers) This was part of the downfall for Solarcity. Because of this, the Moody's downgrade(potentially brought about by short sellers) materially harmed Tesla by increasing its borrowing cost.

    I believe a CEO should focus on running their company instead of worrying about stock price or short sellers.

    The thing is though, I think when Elon Musk looks around, he realizes the greatest threat to his company is not the Mission E or Model 3 take rate or whatever.(both will be positive for Tesla) It is the massive amount of capital betting against him steered by bad actors with malicious intent and an incriminating history.

    I think this is why after 15 years Tesla has now made profitability and positive cash flow such a priority, so much so that they are going to extraordinarily lengths to achieve it. By laying off 9% of the entire workforce while retaining all production personnel, the numbers could be as high as 20% for non-production. By cutting cap ex for all but the essentials, Elon stated that anything over $1 million has to be personally vetted by himself, and only cap ex for immediate(next 2 years iirc) needs will be approved.

    Because the way to break from the short sellers influence is by becoming self sustaining. When you no longer need to sell stock to survive, you don't care how high or low your stock goes. When you no longer need to raise debt to survive, you don't care which agencies short sellers can manipulate.

    Remember, these short sellers are not in because they think the stock is overvalued(since they cover near the highs), instead they are trying to break Tesla during the times of distress. And even though they have been unsuccessful so far, they have caused material harm.

    However, if Tesla becomes self sustaining, the shorts would lose their effect and therefore lose their purpose. It is my hope that once this happens the short interest will disperse and Tesla would be free from these attacks. I believe this will happen. However, I do fear that with the stakes so high, once they lose control of share price, they may instead move on the the next logical targets. Attacking demand - they already do this with the fires and autopilot incidents. Or even worse, attack the factory and its people(concerned about the news that just came out). Those are much harder to pull off compared to price/sentiment manipulation, and carry a lot more legal risk, so I hope for their sake it does not come to that.

    Last bit is that, to be clear, even when Tesla becomes self sustaining, they will still raise tons of capital in the future, actually more than ever before(most likely debt at a favorable rate). Tesla has massive ambitions and even greater capital needs for 10 gigafactories and the pipeline of new products. I actually agree with Goldman that they will need at least $10 billion over the next few years. The difference is when you are a self sustaining company, you can raise capital on your own terms. And if the terms offered are unfavorable, you can simply move on and wait for a better opportunity. Of course, Tesla could also try to grow organically by only expanding with the cash it generates, but then that would go against their mission statement: to accelerate the world's transition to sustainable energy.

    *fin
     
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  15. FredTMC

    FredTMC Model S VIN #4925

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    Great post.

    So, Q2 financials may be a little better than expected.
    Q3 will be profitable. Q2 profit is likely out of reach IMO
     
  16. SPadival

    SPadival Member

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    I assumed everyone knew about this!! I am face palming myself for not creating a dedicated thread for this. Thanks Jesse

    C8A1A585-3DC9-4FDB-BBDB-BCF4AB31B01C.png
     
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  17. TradingInvest

    TradingInvest Member

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    I will add one piece of my observation regarding short attack.

    Around the end of March 2018, eight of my friends contacted me individually, some called on the phone, some emailed. They were asking the same question: is it true that Tesla will bankrupt soon? I was curious, why all of them are suddenly so concerned?

    Turned out they all got the same message but from various sources: Tesla will bankrupt soon. After I visited those sources, It was clear to me it's a coordinated effort to take down TSLA and then Tesla. They were trying to create a bank-run situation (so Tesla can't get money and even the parts suppliers will demand upfront cash). It was a pretty big effort, a friend forwarded me some long foreign TV programs which described Elon as a fraud, SpaceX landing is easy and fraudulent, and most importantly, Tesla will bankrupt soon. That TV man is the worst paid basher, but he probably fooled lots of people.

    I wrote them a long email to explain why I think Tesla has zero chance to bankrupt and $250 is not a time to sell, instead it's a good time to buy more shares. I know it's crazy to make that kind of statement when everything seemed scary, I would hate it to see my friends get duped to sell their stock right before a big rally.
     
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  18. dakh

    dakh Member

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    First off, thanks for great insights. On this one, it would be logical for shorts to simply move to an easier target if they're just out to make money. So if attacks continue in other forms, we know it's not shorts trying to make money by attacking Tesla on the market/media, it's other vested interests at play.
     
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  19. MP3Mike

    MP3Mike Well-Known Member

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    I think they have too much invested to just move on...
     
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  20. pz1975

    pz1975 Member

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    Can you (jesse) or a mod please copy and paste all of jesse’s 4 posts into the first post on this thread so they can be read one after another altogether? It will be way easier to reference in the future and for new readers to be able to read all of them without having to wade through all the other posts.

    I plan to send a link to this thread to many friends/family but want to make it easy for them to read all of it.

    And I would definitely be in favour of electrek/@FredLambert running the entire series of posts as an article on his website.
     
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