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Comment by obblekk | Hacker News Reader

For those catching up on Tesla news - there's a PR war going on between Tesla Inc. and many hedge funds who are short TSLA stock. As a result, it's tough to tell what's truth and what's imaginary.

Tesla wants people to believe in them in order to continue selling cars to customers (who probably wouldn't buy if they thought the company was going bankrupt) and stock/bonds already issued to investors.

Short sellers want to give people doubt to cause a decrease in stock price in order to benefit from their short position.

Both parties are probably acting in good faith - Tesla wants people to see how good they are and short sellers want people to see how risky they are. But as a result the news is crowded and it's generally hard to know the truth.

Just remember, in the US the Supreme Court has ruled that it's legal for news publications to lie to their readers/viewers.

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> Just remember, in the US the Supreme Court has ruled that it's legal for news publications to lie to their readers/viewers.

Citation please. If you're talking about the Jane Akre/Steve Wilson lawsuit, that's factually inaccurate.

You've missed one important group: union forces. Tesla Employees have been fired en-mass in what was allegedly a union-busting attempt. Since Tesla employees are unhappy, a lot of them are demonstrating flaws with Tesla's manufacturing process, potentially in an attempt to strongarm their bosses into getting better pay or unionization prospects.

Anyway, there's more than just "bulls vs bears" going on here.

In any case, Elon Musk's 20,000 Model 3 manufactured per month target for late 2017 is incredibly late (See: https://twitter.com/elonmusk/status/881757617416056832). A lot of Tesla bulls don't seem to care however and continue to throw money at the company.

Tesla isn't even at 2000 cars a month, and we're well into 2018. A lot of people are interested in "why" this is happening. Yes, short-sellers are interested, but I'm sure normal investors are wondering why Musk isn't even hitting 10% of his target months later.

The article suggests that the QA group is finding flaws in the manufacturing process. So... yeah. That makes sense for why the Model 3 is late with very, very low production numbers. There's been a lot of speculation in different groups for the failure, but ultimately, the core is that Tesla is not making enough Model 3.

>> Since Tesla employees are unhappy, a lot of them are demonstrating flaws with Tesla's manufacturing process, potentially in an attempt to strongarm their bosses into getting better pay or unionization prospects

This seems like a pretty big/dangerous jump to make with little-to-no evidence.

>> In any case, Elon Musk's 20,000 Model 3 manufactured per month target for late 2017 is incredibly late (See: https://twitter.com/elonmusk/status/881757617416056832). A lot of Tesla bulls don't seem to care however and continue to throw money at the company.

I really hate that Musk publicly underestimates the amount of work and deadlines in this process. It's especially annoying for me because I've worked for people who publicly underestimate and it put way more ridiculous work on me and my coworkers.

That said, I also hate this "fraud-boy" FUD. I think Tesla could eventually pull this off. The ramp will obviously be slower than what Musk expects. I, like many bears, take what Elon says with a grain of salt. But cars are rolling off the production line. At this point, the Model 3 is now the best-selling EV in the US. (https://www.bloomberg.com/graphics/2018-tesla-tracker/). Tesla has proven itself with the Model S. People in general love the cars. Tesla will get there, and I think that's why bulls are holding.

> This seems like a pretty big/dangerous jump to make with little-to-no evidence.

Sorry for the lack of evidence.

https://www.usatoday.com/story/money/cars/2016/05/19/united-...

https://www.mercurynews.com/2017/02/09/tesla-worker-long-hou...

But its no small secret that pro-union forces are also in this whole mess. I've got no skin in the game, but its clear that the UAW union wants to unionize Tesla's workers.

The UAW rallying pro-union forces of the Tesla workforce is just... how politics works in the USA. Its going to happen.

I'm overall a Tesla Bear (but I have no real money on this bet, its just my unfathomed opinion). But when I read Tesla news stories, they're either complaints about the workforce (which I generally judge to be from pro-Union forces), or complaints about Tesla's financials (which I judge to be from Financial bears).

That's all I'm saying: keep an eye out for the union pieces. They may or may not be "correct", but there's certainly an agenda that is being pushed here.

> Tesla isn't even at 2000 cars a month

https://www.bloomberg.com/graphics/2018-tesla-tracker/

Current rate of 700 cars/week * ~4 weeks/month = ~2800 cars/month.

Also, Model 3 sales estimates for Feb were 2,485: https://insideevs.com/monthly-plug-in-sales-scorecard/

How are either of these numbers okay against the 20k estimate due to land 2 months prior? I'm confused. They missed the target by slightly less than an order of magnitude. That doesn't sound great to me.

I'm just wondering how that's a good thing, it sure doesn't feel like it to me. It honestly sounds like me explaining to my family how I'm pulling my shit together. Sure, I haven't quit drinking or found a real career yet, but I went to the grocery store last week, and that's pretty good, right?

I'm exaggerating, but citing numbers that are perhaps factual but not much better than the hyperbole doesn't a convincing argument make.

If you want to argue like people do on stock shorting forums, please keep it there. I literally only wanted to provide an additional datapoint about measured sales.

I'm not shorting this. Just trying to figure out a universe in which it makes sense, that's all. Have no dog in the fight, but I have to say that you're representing an idea that no longer exists.

You made up whatever idea you think I'm representing -- the idea that I'm actually advancing is that February sales were 2,485.

You hit the nail in the head, on what's evident to anyone who wants to see. But I expect some people are so intent on Tesla succeeding that they don't want to see...

> Just remember, in the US the Supreme Court has ruled that it's legal for news publications to lie to their readers/viewers.

Link please?

Frequently this is a reference to a suit between a Fox affiliate station and a pair of their reporters who were terminated amid editorial conflicts and whistleblower actions. It is a complicated suit with a number of claims. There are enough bits which if extracted and held up alone can support the grandparent's claim, but on a whole doesn't really say that.

It is a bit hard to google about because a lot of the people who choose to write about it are partisan, but you can get a feel for the mess in the Snopes article†.

As with lots of law, part of it turns on technical definitions. The Appeals Court (not Supreme) found that the FCC policy against falsification did not meet the legal definition of "law, rule, or regulation" in a particular section of relevant law. Remember, three of those four quoted words probably don't mean what you think they do unless you are a legal scholar. It's like having a variable in a program named "loop_count". Maybe it is a count of the looping, maybe not, unless you read all the referencing code.

The wikipedia article‡ is currently ok too, but who knows by the time you read it.

† https://www.snopes.com/fact-check/fox-skews/

‡ https://en.wikipedia.org/wiki/Jane_Akre

Isn't that ruling just allowing news stations to segment certain time frames as news and others as entertainment? They still can't make stuff up during news segments.

No, I don't think that's it.

I think OP is referring to "NEW YORK TIMES CO. v. SULLIVAN" where the Supreme Court placed the bar of something being libel as the accused having 'actual malice' which is in itself is somewhat slipperly defined as having knowledge that they were lying, or recklessly not investigating what they were publishing.

I dunno if that's what OP meant or not, but either way I'd note the actual malice standard only applies to public officials and public figures, which is defined fairly narrowly.

I certainly don't think that qualifies as a decision that "the news media can lie". In fact, to the extent you can prove the news media was lying in a report about a public figure (that is, the news media published something they knew to be false), that's explicitly covered. That's the opposite of what OP claimed.

Sounds like a variant on this urban legend:

https://www.snopes.com/fact-check/fox-skews/

http://www.politifact.com/punditfact/statements/2014/sep/10/...

Specifics of this case aside, it must feel great to hold short positions, where you are hoping others fail...

Short sellers, villainized though they may be, provide a valuable service to the market and society as a whole. It’s a good thing that people are incentivized to spot companies that are financially overstretched (or worse) - it keeps companies honest and penalizes bad actors. See the story of Valeant for a good example.

If hypothetically their position is that the thing that will fail is bad (based on a bad technology, bad management, bad presuppositions, etc.) - then what's so bad about shorting it? They are hoping that the bad thing will fail so that more resources (money, news, workers, scientists, mind-space of the public) will go to other projects that better deserve it? If they can make some money at the same time - then why not? Is the same as going long (investing in) some other projects that they predict will succeed. (Not saying Tesla is a "bad" company, the comment was about shorting.)

If you're shorting something then you're incentivized to spread negative sentiment about it, possibly in bad faith.

Of course, you could say the converse thing about standard investments, but in the former case you risk otherwise viable ventures being sunk by profit-seeking bad faith actors. In the latter case, maybe some naive and irresponsible investors will lose their money. The latter seems much more acceptable to me than the former.

If they spread good news about a bad company (ie, spreading sentiment in bad faith, as you called it), after acquiring a long position for that company - it means they are pushing resources into that company. Those resources are not endless. There is only a limited amount of capital flowing out there. If the capital goes to a bad company, it means that a good company somewhere did not get the capital that they would have otherwise gotten. It's just as bad.

The issue here is spreading sentiment in bad faith. If someone is doing it, they are affecting the market and enterprises in it, in a bad way. The good guys make less (and go out of business sometimes), and the bad guys make more money and get more attention, stealing it from the ones who truly deserve it.

The downside is not that some naive investors lose money. The downside is that a better project will not get the money it really needs, and instead that money will go to a worse project with better false marketing - thus slowing down the overall progress.

Whether this happens while going long or short positions - doesn't make much difference.

It's a relatively compelling argument, but I'm not convinced that the reality is as "zero-summy" as you're suggesting for a few reasons (off the top of my head):

a) I'm not convinced that it's as difficult/expensive to spread FUD as it is to spread whatever the opposite of FUD is.

b) I'm not convinced that different classes of investors respond in the same ways to FUD and whatever the opposite of FUD is.

c) I'm not convinced that different classes of investors have the same access to tools that allow them to "buy long" and "sell short". This may be on the way to changing, but currently even e.g. Robinhood does not support short selling.

I say "not convinced" because I honestly don't think I have the answer to this, but if the answers to the above questions go a certain way that I think is fairly plausible, it seems that the net effects would include a disproportionate burden on disruptive/innovative ventures that are especially vulnerable to FUD, and an increase in wealth inequality as capital flows to more sophisticated investors. Neither of those things are great.

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