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Comment by snowwrestler | Hacker News Reader

I think a more likely explanation is Elon's ongoing annoyance and anger toward anyone who questions the eventual success of Tesla, and especially anyone shorting the stock.

There's no way he would ever admit this, but I bet one of his motivations for posting that tweet was to move the stock and hurt the shorts.

Musk seems to be one of those classic "force of nature" founders, whose will to overcome obstacles and prove everyone wrong is essential to getting off the ground, but could be a liability in a mature company.

"Oh, yeah? Try and stop me!" works great until you run up against someone who can actually stop you (often, the government).

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He is only really annoyed with the shorts because there is truth in what they are saying. If he really was crushing it, and his company was raking in the money, he wouldn't care much about what the shorts are saying. As it is, his company is hemorrhaging cash and he doesn't know where the next cash infusion is going to come from.

On the flip side, he wants to build cars without having to play stupid financial games to satisfy investors each quarter. Tesla are going gangbusters, they will pay back debts and become a real company (ie: making profit) but the financial games where certain expenses are pushed or pulled between quarters to make the books look interesting get in the way of actually ramping up production.

Moving expenses from one to a quarter affects profit and loss, but it's a distinct thing from cash flow. The latter is the one that looks gloomy.

No matter how rosy your income statement, if you run out of cash, the GAME OVER screen comes up and people laugh at the glowing biographies folks wrote about you and your company in $PREVIOUS_DECADE. And while your accounts payable will often deal with being fobbed off for a bit, it becomes harder to do this. And certain folks expect cash, now, and can force you to cough it up: foremost being the government, but also employees (hard to do things when people quit en masse) and key suppliers (if the electricity goes off, or the parts don't arrive, you have to shut down the line).

Again though - these aren't things imposed by the markets. Time and again these impositions are imposed by Musk himself. He set the 5,000 car per week target, he missed it. The markets reacted when he set it, and they reacted every time he missed it. He also made the public statements about being cash flow positive and about taking on more debt.

If you look at the real market the trend is clear: There has never in the history of the stock market ever been a time when investors were more willing to invest in money-losing companies to gamble on them hitting it big. Tesla is valued by the stock market as twice as valuable as the Ford Motor Company.

> On the flip side, he wants to build cars without having to play stupid financial games to satisfy investors each quarter.

It baffles me why he publicly listed Tesla in the first place if he didn't want to "play stupid financial games".

Ok so he wants to take it private - is funding secured or not?

This really is the core of the matter. Some founders are capable of largely ignoring the peanut gallery and don’t view external negativity as an existential threat. Musk is not among them.

>I bet one of his motivations for posting that tweet was to move the stock and hurt the shorts

Sounds like a violation of SEC rule 10b-5 and possibly illegal.

it's funny how 3 months ago, all the news articles were saying Tesla has a 99% chance of going bankrupt

because, based on rational math, if you add this expense and minus that, the result is 0 in 3 months. QED

now that bankruptcy sounds unlikely, all the news articles are focusing on how a tweet could be illegal

Don't recall any articles from earlier this year saying that Tesla had a 99% chance of going bankrupt within 3 months, and I read almost all of them. You got any links?

(The money was on Tesla either blowing it out of the park, or going broke in 2019/2020.)

https://techcrunch.com/2017/11/26/in-praise-of-teslas-bankru...

https://seekingalpha.com/article/4135995-teslas-coming-bankr...

https://www.marketwatch.com/story/tesla-is-just-months-away-...

just look on Seeking Alpha

Just reread all 3 articles. The first and third don't have a timeline, but posit that it will occur after the Model 3 has begun sales, so 2019. Seeking Alpha says Tesla is on track for bankruptcy, and posits that it might be by the end of the year (i.e., 12 months from the date of the article) but is otherwise anticipated for 2019 based on the numerous cash flow models in the article (assuming no stock offering or new debt issuance).

In other words: 3 months ago no one was saying Tesla would be bankrupt by August/September.

And here's the thing: if Musk was truly honest about Tesla not seeking financing or offering new stock in 2018, they are on track for bankruptcy by the end of the year based on currently available investor documents re expense, cash flow, assets, etc.. If those documents are wrong, it's incumbent on Tesla to update them, not on the rest of us to assume voodoo financial magic will save the day.

Fine, all the it's bankrupt "in 2019/2020" vs "by September".

The point is, all the articles raising alarm bells saying Tesla is going bankrupt SOON, it will run out of funds, it will collapse. Because math.

Now, all the articles are focused on SEC rules for a tweet.

> Sounds like a violation of SEC rule 10b-5 and possibly illegal.

Well, yeah, and there are already lawsuits charging that.

Only if you prove intent. Which is why Musk would never admit it.

Intent is not required for regulatory violations. Moreover, the text of 10b-5 does not require any specific intent, only that the false statement or omission be made in connection with the transaction of a regulated security.

> John Reed Stark, a former longtime lawyer at the S.E.C. who specialized in investigating internet fraud cases, said that commenting online about the prospects of taking the company private was inadvisable at best. But he said that a case of market manipulation would come down to Mr. Musk’s intent.

> “These are very difficult cases to prove,” said Mr. Stark, who runs a cybersecurity consulting business.

https://www.nytimes.com/2018/08/13/business/dealbook/tesla-e...

That is a seperate crime which he may also be guilty of.

Thanks.

There's no way he would ever admit this, but I bet one of his motivations for posting that tweet was to move the stock and hurt the shorts.

I would highly recommend not to admit this, because it's illegal as hell.

That reminds me a lot Dick Fuld.

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