You say the shorts don't have any power to hurt tesla, but much of tesla's and elon musk's personal debt is backed by Tesla shares. If the price dips too low, it's potentially catastrophic for the company and him.
The shorts are all over this stock because of issues like the above. They were not the cause of those issues.
Lol. Musk over extended. Plain and simple. He played it risky and now, when it didn’t work out, he is pissed.
In response he waged war via twitter on those who took risks in the other direction. Would have been wiser for him to focus on finding a way to cut his losses so he can continue fighting. Instead he played with fire and was burned.
Critically, Tesla ramp up is already high enough that it is now leading the US in sales of electric vehicles. The numbers are decidedly in favor of Tesla, who sells almost as many vehicles a month as the other electric providers sell in a year.
This should be a good thing in your eyes, considering the impact of climate change which will be felt by this generation. However, the legacy of effect of sowing doubt about climate change and automobiles is bearing itself out. The seeds were sown and they now sprout. Enough idiots were convinced to bet against renewable energy and now they're going to do their best to damn the rest us.
This seems to me like a woe to the world moment. The world is trying to take down someone seeking its good. It reminds me of the persecution of Jesus Christ. Read through this thread and see the false witnesses being refuted by his co-laborers and friends. Read the testimony of the people saying that his product is good. Read the empirical reports on the quality of his work.
When the righteous are persecuted, it is done, not because they are evil, but because they are good. Nobody is afraid of the incompetent fool, but rival automaker executives line up to plead that Elon Musk should be removed from his position, now that they realize the danger they are in.
The target misses seem like quite a bit more than tiny, immaterial/technical misses. July 2017 projection of 1500 Model 3s in Sept and 20,000 in December with actuals of 260 and 2425 (17% and 12% of target, respectively).
[0] - https://www.statista.com/chart/12415/tesla-deliveries-and-mo...
Word choice tip, intended as incidental and constructive:
It's "sowing doubt" (as in sowing seeds or sowing discord, not as in sewing clothes).
You're right. They definitely aren't immaterial misses. I'm not trying to deny that there are misses.
I'm trying to talk about the vector that Tesla is representing and the way that vector makes the claims about their misses less important. There is now a new trend in the auto industry, with the monthly sales of ICE vehicles going down every month and the number of electric vehicles sold every month going up. Tesla is now projected to have a vehicle within the top 20 most sold vehicles in the United States. They are projected to be first by vehicle revenue for a single model. They are doing worse than they wanted, but not terribly. They need support, in my view, so that they can continue their mission of electrifying transport. Not to be torn down, which feels almost suicidal at societal scale for as long as the other manufacturers still make most of their income on ICE vehicles.
Though, I suppose legislators will eventually ban those vehicles outright, it is already starting to happen in some places.
Hope you have a wonderful day. As for me, I'm in the house of mourning. I'm certain that more people are going to suffer in the future. It has me really down. I'm watching people trying to bet on disasters occurring, seeing another person realize this and try to do something to fix it, and then seeing that blow up in the most horrible way. It is tragedy. Already, I have friends and family that have been impacted by climate change. I can't stop caring about them.
We're late on stopping climate change. So is Tesla. It sucks.
No one is betting against renewable energy. They are betting against a company drowning in debt that has been poorly ran with a CEO who has been charged with securities fraud.
And please do not try to compare Musk to some modern day Jesus Christ. My bible studies are a little rusty, but I do not remember Jesus buying up multiple mansions [1], doing shady bail outs for family like Solar City [2], or leveraging himself to the hilt on a company that is in a crisis [3].
[1] https://variety.com/2016/dirt/real-estalker/elon-musk-bel-ai...
[2] https://www.forbes.com/sites/jimcollins/2018/08/09/solarcity...
[3] https://www.forbes.com/sites/jimcollins/2018/05/18/musk-has-...
But, you're right that I'm speaking too broadly when I say it is a bet against all renewable energy. Thank you for removing this speck from my eye. I appreciate it.
As to your being offended by my reference: First off let me be clear that Elon Musk is a man. He cries the tears of a man. He has the many failings of a man. Many talks in which he describes his life makes it clear that he hates it and would not recommend it to others. Part of what is feeding into that these days is the cruelty directed toward him, much of which is not fully justified by the ever so slight nature of his failings.
Now as to your attempt to show Elon Musk as having done some sort of wrong? Let me remind you of some of your rusty scripture:
Jesus Christ talks about the many mansions of his father. He does not need to buy them. He made them. All things are made by and for him. Therefore, I'm not about to condemn someone for having mansions, in isolation from the rest of their deeds [2]. Solomon also had incredible wealth. Rather than calling that evil, Jesus Christ described Solomon as wise.
As to bailing out family? Jesus Christ came to save us, despite our sins. A healthy person doesn't need a healer. Moreover, we are described in scripture as children of God. So I'm also not about to condemn a person for trying to help someone related to them. Especially since I consider the continuance of solar deployment to be a moral /good/. That said, I've read the reviews of SolarCity. Clearly SolarCity is falling well short of the rest of Tesla given customer reviews of the company. Hopefully they manage to get things together at some point. That would be wonderful. Eventually, I expect solar to be a dominant provider of energy. It seems to me like a good long-term investment.
[1]: https://twitter.com/TeslaCharts/status/1008405211432570880
[2]: TL;DR for the people who didn't read the article: He bought mansions. The mansion are near another. He converted one it into a school for his kids and others he knew who presumably were interested in attending. The other was for his wife, who was interested in having the option of alternate living arrangements. Another is thought to house security staff. It is a tabloid piece, trying to make a sordid story of Elon Musk's personal life for the entertainment of gawkers.
The others I get but this seems like an odd personal attack. What CEO of a huge public company doesn't live a "lavish lifestyle"? Or is this just supposed to make us hate him more because he's rich and we're not?
https://www.forbes.com/sites/jimcollins/2018/05/18/musk-has-...
If I'm long on Tesla, then I lend my shares for someone and the shares happen to fall at all (normal market variations) then I lost money. If I see more short orders then surely I'm going to get antsy, move to "a more stable share", pushing the price down a little, making some other short positions come off and starting the snowball rolling.
Add to that the ability of people to win on large short positions by selling shares 'they' are holding (pushing the price down), or knowing what major news outlets are publishing in advance, and any inkling of weakness gets multiplied beyond reality.
Surely you'd be stupid not to respect a major trading operation going short on a company you're long on; but that makes the position easy to manipulate?
If you see the sharks circling ready to depress your share price the temptation to blip the share price with an announcement "free cake for all shareholders!" is going to be strong. Especially if that might save the company.
Teach me oh wise ones, where am I wrong, what am I missing.
(I'd guess one thing would be the ability to hide the origin of bids/buys; I assume these are public.)
TSLAs financials have been a disaster for a long time. Its stock price has been completely disconnected from reality for a long time. Musk/TSLA fans have buoyed the stock price, but people are starting to realize that even if the TSLA car is nice it doesn't mean it's a good company.
> aren't shorts self-fulfilling eventually if the people taking this positions are powerful enough?
Powerful enough to do what? There is not some grand short conspiracy. TSLA and Musk have given the shorts all they need. Yes, a lot of short interest could cause people not to go long, but because people use short interest as a proxy to something is wrong at the company. It only takes 2 mins of research to see that TSLAs financials are a disaster. The CEO is on Twitter calling people pedophiles and now looks to have committed securities fraud. The shorts are a symptom of the problems of the company, they are not the cause.
> Add to that the ability of people to win on large short positions by selling shares 'they' are holding (pushing the price down),
First, you're making an assumption this person holds enough shares to move the market (millions of shares change hands per day in TSLA). Second, there are all sorts of rules around market manipulation of that type. If someone is moving that kind of money to move TSLA with the sort of daily volume it has, then that person is on the radar.
You know Musk how could screw all the shorts? Get off Twitter and execute. Hit a target more than once a year. Actually make some money. Unfortunately it may be too late because of the TSLA debt load (added to by the Solar City bailout which was itself shady).
https://www.forbes.com/sites/jimcollins/2018/08/09/solarcity...
The way shorting works is Alice lends a stock from Bob and gives him a small compensation for that. Then Alice sells that stock she lend. Somewhere in the future Alice will buy the stock and give it back to Bob.
If the price goes up enouogh, Alice will (be forced to) cut her losses. For this she has to buy a stock, which will increase the price further. This can lead to a so called 'short squeeze' when shorters Carol and Dave also (are forced to) cut their losses, driving the price up even further.
Right now >28% the TSLA float is sold short[0]. That must have an impact on the price. Also should a TSLA short squeeze ever happen, that's going to be epic. There will be enough Tesla believers that it's probable going to be hard to find that 28% for anything close to reasonable prices.
[0] https://www.gurufocus.com/term/ShortPercentageOfFloat/NAS:TS...
Regardless of any change in public sentiment or incentives to publicize dirt, at scale shorting a stock inherently reduces the price while the short positions are open.
Seems like a boogeyman to blame all manner of company ills on. For example, I think very few of the negative press Tesla has received over e.g. union busting or manufacturing defects is due to a short seller conspiracy. That's newsworthy stuff and the media is doing its job.
You have to admit though, based on comments all over any story about Tesla here at least, that it works as a bogeyman. The only other fiction that’s more powerful is that Musk does everything he does to send humanity to Mars, save the world, etc. Musk has a true talent for figuring out what his target audience wants to believe, and then selling it to them at a premium. Smart, technically minded people (key early adopters of Tesla) are desperate for a way to keep humanity going in the face of climate change, possible impact events, and so on. Musk more or less frames his rather mundane personal aggrandizement and money-making endeavors as lynchpins in just those areas. He helps to convince people who want to believe, that they can help save the world not through anything like sacrifice, but by buying stock or a luxury car!
They eat it up, and are enraged at people who scoff, and no one scoffs harder than someone who puts their money on a bet that the stock is overvalued. As a result the short is already a subject of hate, and perfect to pin all of the evils of the world on. It perpetuates a classic tribal narrative and dresses it up in just enough pseudo intellectual finery to convince a target audience which already wants to believe. As a bonus that audience thinks it’s too smart to be fooled that way, and above tribalism, making it easier to sell the story and harder for them to admit what they’ve fallen for.
Look at some of these comments, and you see the evidence of just what I’m talking about!
The law says a lot of things. I'm ok with short sellers losing their shirts regardless.
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I also take the long view; Elon is instrumental to the long-term outcome for Tesla, our species, and our planet.
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Because he made short sellers look like idiots? I think not. I just bought more.
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SEC suing Elon Musk is , quite frankly one of the most abhorrent actions a US govt agency can ever do against genuine American Entrepreneurship and American innovative spirit. There is not a single human being on the planet who comes close to Elon Musk when it comes to big , bold innovation and tech entrepreneurship who is putting his heart and soul into leading the human race into the future.
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you can’t disrupt or otherwise show up all of these players: the us/eu/russian/chinese space industries (and by extension the governments of china and russia), the oil industries of russia/saudi/usa, the major auto manufacturers, power companies, professional car and truck drivers, and the us dealership association (what am i forgetting), all of whom are politically very well connected, and some of whom have their hordes of paid shill internet commenters, and upvoting/downvoting bot nets (not that that would ever happen on hn (and if it would it’s against hn rules to suggest it)) and expect not to get trounced. elon might have fucked up by sending that tweet, but the response here, on reddit, and by the gov’t is way out of proportion, esp considering everything positive that this man has accomplished and is currently working on.
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He didn’t screw anyone over. Wall street gamblers lost money, and our culture coddles Wall Street bros like helpless babies. Traders who lost money wouldn’t have had the stock to trade without Elon in the first place!
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The entire world will lose if Elon is forced out. He’s the biggest fighter for climate change and space travel in modern history, greater than Al Gore in marketing and execution, greater than Buzz Aldrin, Tyson, and cosmos. I’d much rather have an honest relatable Elon Musk than a suit. I’d rather have creativity than suffocating structure.
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The subtext is that Elon intentionally bumped the stock price to screw over short sellers like Jim Chanos. But the rationale behind 10b5 is to protect investors from fraud. Right, we are not concerned with protecting short-sellers who spend all day on twitter making up negative stories about their targets.
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The battery and solar operations side of TSLA are critical to spaceX's mission to Mars. Can't have a martian colony without being able to harvest and store energy. Additionally the CV being done at Tesla could prove critical in automating prefabrication of living spaces and life support infrastructure. Can't be doing anything like that remote controlled with 8 min latency.
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What a joke, there are plenty of scumbag and criminal leaders of corporations and this is the guy who doesn't walk. It'll be a sad day for the world if this guy goes to jail.
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I know where Elon comes from, what missions and goals he has stated for years now, and what he is trying to accomplish. I promise you, Elon legitimately thought there would be an opportunity to go private again. He's said he wanted to do so in the past, and even has said they never wanted to go public, but were left with no choice. I don't think any part of Elon was trying to commit fraud or security manipulation. He made a mistake, we all do. He said something that should not have been said at that given point of time. I'm sure he was excited. He even said he typed that tweet in the car after leaving SpaceX.
Somethings are just not worth doing, regardless of whatever little virtue fight is at stake. Punish Musk and you handover the keys to the auto-industry kingdom to Germany and Japan on a platter.
You also risk scaring away, Musk like entrepreneurs to other countries. Emmanuel Macron wants to set up a SV competitor in France, and UK tops the world in quality universities. Germany too could put up a tough fight. Most of the world already has infrastructure to dethrone SVs dominance over creating high quality value and leadership. This is beyond countries like India and China having millions of super hungry entrepreneurs wanting to prove themselves.
Even if there is small chance of this happening, you risk losing trillions of dollars of future worth economy, talent, IP, ecosystem and culture to competing countries.
And all of this for what? A few overzealous prosecutors and short sellers on the market, all of whom are inconsequential and sometimes even a net negative to the economy.
In my country(India). Plenty of small to even large business people are known to indulge in blatant corrupt practices. Government does nothing because you rather have them at home, than compete with someone like them in a competing country.
Prosecuting Musk will make US Justice system win a tiny inconsequential virtue war, but it will be massive shooting in the foot at the country level.
This is because the current Administration is anti Silicon Valley and anti Clean Energy. It makes sense for them
If you divert some of the water from a river, the water level goes down. How much does it go down? You can calculate it if you know the values of all the variables that go into it. If you don't know all their values, does that mean the principle ceases to operate?
> Seems like a boogeyman to blame all manner of company ills on.
Not being responsible for 100% of all problems is not equivalent to being responsible for 0% of all problems.
Right now >28% the TSLA float is sold short[0]. I can't imagine that not have an impact on the price.
[0] https://www.gurufocus.com/term/ShortPercentageOfFloat/NAS:TS...
Shorting a stock doesn't magically make its price drop.
* And buying back later of course. But in the meantime, does a short-sell look any different than a sell on the order book?
Shorting is selling? Selling to whom? Ah, right, a buyer.
Telsa share price has risen through extreme short interest for years. How?
A buyer who would otherwise have had to buy from a seller who wanted a higher price.
The stock price is really the value for which shares were most recently exchanged. If the price is $500, shares were exchanged for $500.
That isn't the same as what other people value the shares at, which is different for each person. The people who own shares value them at more than their market price (or they would sell) and the people who can afford but don't own shares value them less (or they would buy). Someone could own shares and value them at $600, so they wouldn't even sell at $550, meanwhile another owner values them at no more than $500.02, so they sell as soon as the price hits $500.02.
That's where the bid/ask spread comes from. The lowest seller values the shares at $500.02, the highest buyer values them at $499.98, so the seller keeps their shares and the buyer keeps their money, and the share price is still considered to be $500.00 because that's what the last actual sale went through as. To get another transaction either the seller or the buyer has to "cross the spread" and meet the other side's price and then the price goes up or down based on whether it was the buyer or the seller.
So what happens when someone makes a short sale? They borrow shares and cross the spread to sell for $499.98. Now the share price has gone down two cents. Moreover, the buyer willing to pay $499.98 now has their shares. The next highest bid is $499.97. If another short seller supplies that buyer with shares, the share price drops again and so does the bid price, because the previous high bid already has their shares. The more short sellers, the lower the sale price.
This is one of the reasons why short selling is frequently unprofitable. If you're not an early short seller, you're selling shares for $450 that all else equal would be worth $500 once the existing shorts close their positions, and at some point you have to buy them back. Which means to make money the company doesn't just have to lose value, it has to fail hard enough to prevent your profits from being erased by other shorts buying back shares to close their positions.
> Telsa share price has risen through extreme short interest for years. How?
If the share price would rise by $3 while short selling would cause it to decline by $1 then on net the price rises by $2, i.e. $1 less than it would have but still a positive value.
A limit order doesn't necessarily get filled immediately, or at all.
If there is a lot more volume in sell orders than buy orders on the book, it is a buyer's market and price will go down. Inversely if there is more buy order volume, it is a seller's market, and price will go up.
I don't know if shorts have affected the price of Tesla significantly. This is really fact-specific and I didn't do the research. But the principle is sound.