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Open Source Bear Narrative Rebuttals

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SteveG3

Active Member
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Sep 21, 2012
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Generally there's a handful of bear narratives that are repeated, often for years, in the media. Thought it would be more efficient to share a few rebuttals on these common narratives that anyone can feel free to use without attribution in various comment sections of articles, social media, etc. My suggestion is that along with rebutting a narrative, where it applies, these rebuttals include some noting of so much of the media giving such massively off the track and easily refuted narratives an uncritical free megaphone. The more people that realize that most of the media's coverage of Tesla is tremendously distorted the better. That is, it's not just false bear narratives, it's also the media coverage allowing these unfit but unquestioned arguments to heavily frame the discussion of Tesla.

Bold, naming of the narrative taken on in a post will make it easy to find these when looking to share them. Please join in as you can.

Here's one as a start,



THE BANKRUPTCY BEAR NARRATIVE

The bear narrative that Tesla is on a path to bankruptcy is sideshow stuff.

The discussion of bankruptcy in general is a sideshow, the fact that it is not effectively challenged, let alone readily and thoroughly debunked by the financial media is quite informative about the quality of media "coverage" of Tesla.

Tesla bankruptcy in the next year or so? A rough estimate of the probability, under 1 in 25 million.

1) Probability that Tesla needs funds before finishing ramp to 5K/week and generating funds to take care of debt? 15%

2) If 1), probability that Tesla could not raise such funds via a cap raise or debt offering if needed? 1%

3) If 2) probability that Elon Musk could not and would not use a small fraction of his over $10 billion in SpaceX holdings to pay finance Tesla's viability (something with far more extreme precedent)? under 0.05%

That is one in over a million right there.

4) if 3) odds that Tesla would not be bought out for at least $20 billion? 20%

So, less than one in 5 million that about $125 isn't something of a floor for TSLA. In this analysis, the odds that all these events happen and no suitor comes other than a government bailout at less than one in 25 million. Odds of a Tesla bankruptcy in the next year or so under 1 in 25 million.

Again, the fact that "Tesla bankruptcy" chatter is not debunked by the financial media, and the confidence of those making such absurd claims is not called into question by the media are both quite informative about the quality of media "coverage" of Tesla.
 
probability that Elon Musk could not and would not use a small fraction of his over $10 billion in SpaceX holdings to pay finance Tesla's viability

Just confused by this one. Tesla needs cash, or at the very least, liquidity.

SpaceX holdings aren't liquid. How are you suggesting that Elon would bail out Tesla with SpaceX holdings, exactly?

4) if 3) odds that Tesla would not be bought out for at least $20 billion? 20%
20% is really, really high. Most of the potential buyers of Tesla would want it to be cleaned in bankruptcy court before buying it.

But let's say you're right, and someone buys them out for $20B. I would be a very, very happy short.
 
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Just confused by this one. Tesla needs cash, or at the very least, liquidity.

SpaceX holdings aren't liquid. How are you suggesting that Elon would bail out Tesla with SpaceX holdings, exactly?
You keep saying that Tesla needs cash. We keep saying that we believe they will raise sufficient cash from sales soon. Note that I say sufficient; they may choose to raise cash to fund quicker expansion. So I guess we can all stop saying that since it's a waste of time, or "agree to disagree". But anyway, to answer your second question, Morgan Stanley would happily lend him a couple of billion pledged against his SpaceX holdings. They've already loaned him money pledged against his Tesla holdings... which I guess means that they don't think Tesla is going bankwupt any time soon.
 
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Just confused by this one. Tesla needs cash, or at the very least, liquidity.

SpaceX holdings aren't liquid. How are you suggesting that Elon would bail out Tesla with SpaceX holdings, exactly?


20% is really, really high. Most of the potential buyers of Tesla would want it to be cleaned in bankruptcy court before buying it.

But let's say you're right, and someone buys them out for $20B. I would be a very, very happy short.
Remember there's almost $25 billion of liabilities, so if you pay the equity $20 billion you're really out $45 billion.