So here is the "hole" Doug Kass found. If I didn't understand the whole reason for why Tesla exists and why it was founded, I'd be worried. Let's discuss Tesla Takes Shareholders for a Ride Originally published on Thursday, May 8, at 2:15 p.m. EDT. Tesla's management received a multibillion-dollar transfer of wealth from the common shareholders. Yesterday as we all know, Tesla Motors released its first-quarter 2014 earnings report, and, based on my analysis, there was less than meets the eye. But even more egregious (by a factor of let's say 400x!) was a line item in the Tesla's 2013 annual report regarding the company's issuance of stock options. We all recall several months ago that my friend/buddy/pal David Winters began a public quarrel with Coca-Cola's management. David felt that there was an excessive transfer of wealth to management via a too-generous option program. Based on my analysis below, I suspect that Tesla's Elon Musk was not listening carefully to either David Winters or Warren Buffett. Buried deep within Tesla's 2013 Form 10-K, it was revealed that the difference between the value of the options issued and the market price (intrinsic value of the options) rose from $317 million to over $2.8 billion last year. In other words, Tesla's management has received a multibillion-dollar transfer of wealth from the common shareholders. The difference of nearly $2.5 billion (the benefit accrued by virtue of the price appreciation in Tesla's shares last year) obviously dwarfs Tesla's balance sheet and has entirely been ignored by the analyst community. I reshorted Tesla on the rally at midday. At the time of publication, Kass was short TSLA.