Hi, I’m a short seller

[Yggdrasill]

Let me know if you have any examples of this. My last big short was SunEdison, which went bankrupt because it was horribly mismanaged.

Currently it's mostly been spreading spreading all sorts of lies about Tesla. Personally I don't pay that much attention to the shorts so I don't have many specific examples.

One specific example is all the bogus NHTSA complaints filed on Tesla. Using images from accidents found online. Musk Says Feds Clear Tesla of Supension Issues; Cites 'Fraudulent' Customer Complaints - HybridCars.com

 

[Electroman]

.. and every little things get magnified. Remember the video of sparks flying during welding? how many stories and interviews went around with expert opinion that this is an indication that Tesla is making crap cars. Much ado about nothing.

just an example..of short induced lies and FUD.

 

[ShortSeller]

.. and every little things get magnified. Remember the video of sparks flying during welding? how many stories and interviews went around with expert opinion that this is an indication that Tesla is making crap cars. Much ado about nothing.

just an example..of short induced lies and FUD.

Agreed. I was more referring to “big picture” stuff like has a company ever gone bankrupt and it was determined that short sellers caused it.

 

[Electroman]

Actually Elon said the profits from S and X would pay for the 3, then made several claims that additional capital wouldn’t be necessary. As we now know, all of these claims never came true.
My expectation was the losses would at least begin to narrow 5 years into the start of mass production, but the opposite is happening.

This is a very good example of missing forest for the trees.

Elon lays out a grand vision: Making compelling EVs that people - all walks of life - really want (crave).

And then he lays out an initial strategy and roadmap to achieve that. On the way he lays out milestones: "Lets use this money to make the next product", "Lets make N number of cars this year".

The milestones and strategy are not laid hard in stone. They are just a means to achieving the actual vision of building sustainable products in a grand scale. Milestones get moved, strategy changes as he learns more when he travels alone in this uncharted territory. You got to be fluid. Not lose focus on what your main goal is - which is not to build a car company that only sells 100k cars a year and make a tidy profit.

Let me give you one example:

Elon said, "He will use 'S' profits to build 'X' then use that money to build '3'"

Seemed like a reasonable approach then. But then on the way he realized that having to depend on 3rd party Asian manufacturers to provide cells and batteries at a large scale is not going to work out. Powerwalls and Model 3 requires massive amount of cells that none of the battery OEMs can supply at a reasonable price. And he believed that cutting out the middle men and vertical integration is the answer. And there came the idea of a Gigafactory. More capital expenditure that was not originally envisioned, and so that blew away the idea of using profits from S to X.

But if you step back and look at it, you will see that this is a great decision. Now the Germans are scrambling to build their own Gigafactories.

The point is, shorts can only look up to the tip of their nose and miss the forest for the trees.

 

[dmckinstry]

The point, though, is that I didn't know. I only knew that this company was different than any I'd seen before. And that's why I bought, not because of the numbers. Because if I'd relied on the numbers, I would have stayed far away.

None of us knew, although we had hopes. I bought TSLA because I really wanted a Model S, and I admired Tesla's mission. The worst that could happen was that I'd lose all I'd invested in TSLA. The best would be that I'd get the Model S I wanted, still have most of my stock intact and Tesla would accomplish its missions. The last item is being accomplished. I didn't have enough patience to achieve my second goal as well as possible, but sold nearly half my shares at ~$94 to buy my Model S. If (ain't hindsight great) I'd waited a month or so, I would have had to only sell about 25% or my shares.

 

[EVMeister]

"The point is, shorts can only look up to the tip of their nose and miss the forest for the trees."

Maybe this thread could be re-labelled "Hi, I'm short-sighted"?

 

[ShortSeller]

This is a very good example of missing forest for the trees.

Elon lays out a grand vision: Making compelling EVs that people - all walks of life - really want (crave).

And then he lays out an initial strategy and roadmap to achieve that. On the way he lays out milestones: "Lets use this money to make the next product", "Lets make N number of cars this year".

The milestones and strategy are not laid hard in stone. They are just a means to achieving the actual vision of building sustainable products in a grand scale. Milestones get moved, strategy changes as he learns more when he travels alone in this uncharted territory. You got to be fluid. Not lose focus on what your main goal is - which is not to build a car company that only sells 100k cars a year and make a tidy profit.

Let me give you one example:

Elon said, "He will use 'S' profits to build 'X' then use that money to build '3'.

Seemed like a reasonable approach then. But then on the way he realized that having to depend on 3rd party Asian manufacturers to provide cells and batteries at a large scale is not going to work out. Powerwalls and Model 3 requires massive amount of cells that none of the battery OEMs can supply at a reasonable price. And he believed that cutting out the middle men and vertical integration is the answer. And there came the idea of a Gigafactory. More capital expenditure that was not originally envisioned, and so that blew away the idea of using profits from S to X.

But if you step back and look at it, you will see that this is a great decision. Now the Germans are scrambling to build their own Gigafactories.

The point is, shorts can only look up to the tip of their nose and miss the forest for the trees.

In Tesla’s case though, it’s not just one or two broad statements. It’s pretty consistent, quarter after quarter for several years, of claims that don’t come true. Again I would give a lot of slack for a few of these, but I’ve never seen missed guidance to this level before.

 

[adiggs]

In Tesla’s case though, it’s not just one or two broad statements. It’s pretty consistent, quarter after quarter for several years, of claims that don’t come true. Again I would give a lot of slack for a few of these, but I’ve never seen missed guidance to this level before.

Two ways of looking at that.

1) Missing guidance quarter after quarter.

2) Setting ridiculous goals, missing them, and ending up with a 10 year technology lead and moat relative to the competition, and a product everybody wants and nobody else can build.


The short term goals are largely irrelevant to me - I'm buying the company (with a 10+ year ownership horizon, so short term fluctuatios don't matter to me), that is arguably today 9 years ahead of the competition, with a day for day increase in that gap due to the inability of anybody to even match Tesla's 2008 technology that went into the Roadster.

Today, I expect that gap to have grown 2 years over the next 2 years, as I still don't see real competition arriving immediately.

 

[ShortSeller]

"The point is, shorts can only look up to the tip of their nose and miss the forest for the trees."

Maybe this thread could be re-labelled "Hi, I'm short-sighted"?

I’ll leave it as is

 

[ShortSeller]

Two ways of looking at that.

1) Missing guidance quarter after quarter.

2) Setting ridiculous goals, missing them, and ending up with a 10 year technology lead and moat relative to the competition, and a product everybody wants and nobody else can build.


The short term goals are largely irrelevant to me - I'm buying the company (with a 10+ year ownership horizon, so short term fluctuatios don't matter to me), that is arguably today 9 years ahead of the competition, with a day for day increase in that gap due to the inability of anybody to even match Tesla's 2008 technology that went into the Roadster.

Today, I expect that gap to have grown 2 years over the next 2 years, as I still don't see real competition arriving immediately.

I agree they were 10 years ahead of anyone when the S went on sale in 2012, no doubt about it. I believe the gap has shrunk to 1 or 2 years at this point (Mission E, Jag E Pace, etc).

 

[jimmyjohn]

Hi, I've been long since July 2010.

Nice to meet you.

 

[ShortSeller]

Hi, I've been long since July 2010.

Nice to meet you.

Likewise

 

[Zythryn]

ShortSeller has been made very polite, reasonably factual statement with only a minor factual error or two. In my mind, he has made no emotionally laden comments or tried to trigger any emotional outbursts by others.
In my mind, he should be welcomed and treated with respect (as most have done).

Short, this is what was likely meant by "innocent short".
Others, base everything on emotional arguments, refuse to discuss, and resort to name calling. This I would term a Troll or I suppose, guilty short.
We have seen a few of those, and some of us are gunshy about people that proclaim they are a short. So please forgive any initial skepticism shown by some.

Welcome aboard, I appreciate a variety of viewpoints

 

[North75]

I would think the stock price of Tesla is being valued by some (most?) on a different scale than other established companies. Certainly other auto companies, but also companies in other industries. To me, it seems its about the vision of Tesla... i.e. investors are possibly taking an extremely long view.

How would you compare it to a company like Amazon? How long did they go before making a profit? How did the market cap compare?
I honestly don't know, but my memory is that the Amazon went a long time before making money, instead choosing to continuously reinvest in the business. Perhaps they never had crazy market cap or debt levels though. I'm curious if they are comparable.

 

[ShortSeller]

ShortSeller has been made very polite, reasonably factual statement with only a minor factual error or two. In my mind, he has made no emotionally laden comments or tried to trigger any emotional outbursts by others.
In my mind, he should be welcomed and treated with respect (as most have done).

Short, this is what was likely meant by "innocent short".
Others, base everything on emotional arguments, refuse to discuss, and resort to name calling. This I would term a Troll or I suppose, guilty short.
We have seen a few of those, and some of us are gunshy about people that proclaim they are a short. So please forgive any initial skepticism shown by some.

Welcome aboard, I appreciate a variety of viewpoints

I appreciate it! What did I get wrong so far?

 

[RayW]

I would not buy TSLA at these prices in its current state; however, Elon does have magical powers humans do not yet understand, so I would never bet against him.

I think a better bet is long term puts against the petro companies -- 16 countries have passed, or announced they will pass, legislation banning fossil fuel cars over the next 10-20 years... that list will continue to grow, especially when other countries realize society doesn't collapse if we all drive EVs.

 

[ShortSeller]

I would think the stock price of Tesla is being valued by some (most?) on a different scale than other established companies. Certainly other auto companies, but also companies in other industries. To me, it seems its about the vision of Tesla... i.e. investors are possibly taking an extremely long view.

How would you compare it to a company like Amazon? How long did they go before making a profit? How did the market cap compare?
I honestly don't know, but my memory is that the Amazon went a long time before making money, instead choosing to continuously reinvest in the business. Perhaps they never had crazy market cap or debt levels though. I'm curious if they are comparable.

Amazon’s losses narrowed as they scaled up, the opposite is happening here.

 

[theschnell]

Awesome job getting in at $30. If I only knew then where it would end up, I’d have done the same thing.

This is truly funny. Back in 2010 - 2012, do you think the numbers made sense? They were literally on the brink of bankruptcy for the majority of that entire period. Not like today where the press claims they are going bankrupt when really they have money to last at least 12 months without cap raise at minimum. No, back then they were literally on the edge of the cliff. Survival was day to day. And you say you would have invested if you knew how it would turn out. Who wouldn't if they knew how it would turn out? The whole point is you have to see what Tesla has been through to know what they will be likely able to go through in the future.

Based on their history, you're on the wrong side of the trade, regardless of what the numbers tell you.

I strongly believe we will see $400 before $200. If your puts are in the green, I suggest cashing those in while you still can.

 

[theschnell]

I agree they were 10 years ahead of anyone when the S went on sale in 2012, no doubt about it. I believe the gap has shrunk to 1 or 2 years at this point (Mission E, Jag E Pace, etc).

The shorts were all saying the Bolt was a Tesla killer. How'd that turn out? Mission E and at best will sell out its entire 30,000 production run with little to no effect on MS demand, and 0 effect on M3 demand...

Edit: Same for Jag. By the way, its called I-Pace...

Edit 2: Who is competing with M3?

 

[Zythryn]

I appreciate it! What did I get wrong so far?

In general, you are focusing very narrowly on the quarterly statements and guidance.numbers, but not the qualifying statements.
For example, Elon gave very aggressive goals for the first Model 3 to be delivered last July, with a ramp up to a rate of 5000/year by the end of the year. He also stated that he didn’t believe they could meet that July date, but that was his goal.
They Did deliver the first Model 3 in July, but as we all know, ran into major issues with the ramp.
Tesla set goals extremely high. Many would say too high as they rarely hit those goals on time.
But the do hit the goals, it just takes a little longer.

As for factually incorrect statements...

Actually Elon said the profits from S and X would pay for the 3, then made several claims that additional capital wouldn’t be necessary. As we now know, all of these claims never came true.
My expectation was the losses would at least begin to narrow 5 years into the start of mass production, but the opposite is happening.

This may simply be a matter of semantics, but your first statement, states the profits from the X and S would pay for the 3 in its entirety.
If this is what you meant, I believe you misunderstood the statement, or got this information from a someone who purposely misstated the grand master plan. The plan was to use profits from the Model S/X towards the design and production of the Model 3.

Tesla is working to expand worldwide, in car production, car support & maintenance as well as fueling. Add to that energy storage, both residential, commercial and grid levels.

The rate of that expansion has been phenomenal, and it hasn’t been cheap. So yes, Tesla is investing a ton of money into supporting that expansion. Elon’s latest forward looking statements has been that Tesla should be cash positive in the third quarter.

Now, at some point, if Tesla keeps hitting their goals late, investors will be less and less willing to invest in Tesla. If Tesla can’t deliver at all, that investor patience will run out very quickly.
Alternatively, if Tesla hits more of their goals, in a more timely manner, I expect the stock prices to increase more quickly.