It's not shorted because of its mission, its shorted because of the negative cash flow. Musks' public persona doesn't exactly give off the aura of a man who has his companies operating expenses and profitability under control.
China is smart. They don't fuck around with tax incentives and other silly market manipulators. They use central policy planning to drive forward renewables and battery electric vehicles at nation state scale, and it's a damn shame the United States and other first world countries don't have the same fortitude; yet, our markets will rail against someone who has bet his personal fortune to accomplish these goals.
We (as a society and a country) need Tesla to succeed.
Tesla can't succeed with Elon Musk as CEO at this point.
So Elon should be removed.
Tesla's value is Musk's determination. Still, he needs to choose his actions more wisely, clearly.
Maybe. The main question is whether it will happen before or after bankruptcy (chapter 11 reorganization).
If only all of the TSLA fanboys posted how much money they have on the line. After reading this, all the rest of your comments suddenly make sense.
Pro Tip: Don't get emotional over your investments or you are gonna lose the ability to think rationally and get burned.
If being a fanboy of a company working towards positive change in the world (which is so very often rare, unfortunately) is wrong, I don't want to be right. Everyone finds meaning in different ways. This is my small contribution.
You're imagining some future where because of shorts we don't put enough money into TSLA and never have electric cars. That's not how this works.
With shorts (if the short sellers are right) TSLA is full of it, and capital is much better allocated at BMW, Toyota, or some other car startup, and the sooner everyone finds that out and moves their money over or stops inflating TSLA the better.
Capital allocates to what is best for the markets, not what is best for the world. I can't breath shareholder returns. We can't wait for BMW and Toyota to cannibalize their internal combustion product lines with EVs because it's not financially convenient for them (runaway climate change, all that jazz [1]). Traditional manufacturers have no incentive to disrupt the status quo and instead, continue to churn out internal combustion vehicles.
“Yes, the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders.” [2]
[1] https://www.theguardian.com/environment/2018/sep/26/global-w... ("World 'nowhere near on track' to avoid warming beyond 1.5C target")
Frankly, Q3 2018 was shaping up to be a big moment where M3 cars were mass produced and selling well. If Mr. Musk just shut up for the past 6 months and never tweeted anything, then Tesla would be in a far stronger position.
Today: Musk has to deal with the pedophile slander lawsuit, the SEC investigation, and now the DoJ investigation. The shorts did NONE of this, it was all Mr. Musk's mistake. If Mr. Musk sat tight, released the (what seem to be) good Q3 2018 numbers, then the shorts would have been busted naturally.
That's how you "beat the shorts". Have a strong quarter, have a strong year, and push the stock price up. Short sellers lose money every time the stock rises.
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And I'm sure people out there will complain about the 2-billion convertible loan due 2019, and how short-sellers are destroying the $360 price point.
Guess what? The CEO's job is to secure funding. It was Mr. Musk who signed Tesla to that deal. If you think the loan was idiotic, then it was Mr. Musk's fault for signing the loan back in 2014.
That's Musk's decision however. He's had 5 years to make a profit on a 5-year loan with 0.25% coupon (!!!) and that's his own darn fault for not keeping track of it and turning a profit in time.
(Frankly: 0.25% loan for 5-years are stupendous terms. I do think it was good way to raise money)
Details on the loan due March 2019: http://finra-markets.morningstar.com/BondCenter/BondDetail.j...
The terms of this loan are: $360 call option or cash back on March 2019. Which means bondholders can buy the stock at $360 (no matter what price TSLA is at), OR can demand cash back instead. Given the current price of TSLA, it seems like the bondholders will ask for Cash.
But Musk clearly though, way back in 2014 when he signed this deal, that he would raise the stock price to $360 to avoid paying back the loan. OR he was fine with a 0.25% coupon (!!) on a 5-year rate. Anyone who follows finances knows that this bond was an incredible deal to the advantage of Tesla, and no one should be touting this loan as a disadvantage.
Both in number of vehicles sold[1] and in distance driven[2] Tesla vehicles are handily beat by the likes of the Chevy Volt and Nissan Leaf. Those are the sorts of vehicles that are going to change the game and make a dent in climate change, not luxury cars.
1. https://insideevs.com/plug-in-electric-car-sales-ranked-by-o...
2. https://insideevs.com/us-crosses-10-billion-e-miles-driven-f...
I know we've talked about this before. But +100MW-hrs here and there is nothing. Yeah, 300MW in Australia is impressive for Lithium Ion. But...
https://www.nytimes.com/interactive/2018/07/24/business/ener...
This singular $3 Billion project will give 2GW of power. If the lake holds 8-hours of water, that'd be 16-GW-hrs of energy in a single project.
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If energy storage is to be figured out in the USA, we need to be calculating GW-hr scale projects, not MW-hr scale projects like Mr. Musk.
Lithium Ion's main benefit was to Tesla, as Tesla would have a 2nd place to sell their Lithium Ion batteries. Its great for Tesla, but its way too small of a scale for me to consider it as a major solution to the USA's energy problem.
Utility scale battery storage will lead the day. Raw materials go into your factory, out come battteries good for at least a decade, that can perform energy arbitrage and frequency response for grid services. And every year it keeps getting cheaper to build. Hydro storage construction is always going to be geoconstrained, time consuming to construct, and expensive.
Just my two cents.
I follow the company closely, and have definitely seen some questionable behavior that seemed to be aimed at trying to create the negative news cycle for the business. Things like promoted reddit articles and a horde of bogus NHTSA complaints can be very damaging to the business' fundamentals.
But maybe there is more investigation into these things than I realize, and certainly the need to investigate this material doesn't negate the need to investigate Musk's own questionable conduct as well.
Both parties have an interest in the stock going one way or the other. Regulators need to get involved when something like insider manipulation of the stock happens, say when the CEO uses Twitter the way Elon Musk does.
They regulate things like people talking shit in public on Twitter while having access to insider information. There's no evidence that any of these people talking shit about TSLA because they hold shorts have access to information not available through the usual market disclosure mechanisms.
Though internet companies aren't the best at cash flow management either, it is more about getting the market / customers then the profit. I think innovation is excusable for revenue/profits for some time.
Starting an electric car ONLY car company is even harder than having it as part of an existing car company like Mercedes is doing well with.
The shorts are mainly trying to kill Tesla and coming from the oil, gas, other auto companies most of all. Lots of games are played with car companies (see VW short squeeze a historically big one) because they can't react as fast as it is hard work. I think the shorts have been not just focused on profitability but to drive out the competitive threat, the shorts have also been attacking Elon Musk non-stop.
What about when Elon was spreading rumours that the Saudi's wanted to take Tesla private?
What makes Tesla unique in this respect, and Musk so essential to the operations?
I'd argue nothing at all, other than his image. Hire some experts from the other companies, people with a few decades of experience, and let them turn it around. Maybe start with why you're hand-assembling and gluing things together in tents, rather than using the high efficiency production lines everyone else is using.
Elon is also an engineer first, that is needed at innovative companies, not some metric focused MBA C-level executive just looking to cash out. Musk actually cares about what he is building and has done a smashing job considering the pressure in my opinion. Tesla is made with love, a car/product people want, not just for the short term numbers.
This has little to do with producing cars, and more to do with (financial) management. (Also, most major european car makers survived the great recession just fine).
Most of the European (Mercedes/BMW) engineering and product people have power. Even Honda for a long time engineers/product people drove most of the decisions and power structures. American car companies not so much, most MBA / bizdev lead over engineering and product people. Germany is unique in that engineering and the product quality is highly respected over short term gains only.
Additionally, BMW/Mercedes/etc cars also target the upper classes that weren't as affected by the Great Recession so they didn't have the pressures as much as the US car companies that needed bailouts. American industries targeting consumers in upper class and wealth didn't suffer as much.
Your comments regarding being "made with love" doesn't square with all the other articles I've read recently regarding the poor fit and finish of new Teslas. They are having problems scaling up, and it looks like quality took a hit as a result.
Running a large scale industrial manufacturing operation means extensive delegation. Those "metric-focussed" executives actually have an important role to play at this scale. Product design and engineering happen well before scaling up for production. The production side is all about supply chains, efficient assembly and QA. No one should be changing the design at that point; however talented Musk might be as an engineer, I can't see him specifically having much to bring to the table for sorting out manufacturing issues. (I have worked doing QA in an industrial setting. ISO 9001, six-sigma and all the rest do start to have a point when you are working at scale and want to guarantee quality, throughput, efficiency, customer deadlines etc.) Tesla is bringing nothing new to the table on these fronts that I have seen.
You do need a focused innovative leader to run innovative companies that are competing with big players, if you get a metrics guy as the CEO or one calling the shots they will fade away.
Taking away the founder/creator is like how Python is without Guido and Linux kernel without Linus, they will eventually run out of momentum and get convoluted with many directions trying to take the lead for short term needs, similar to how node went for a long time or Microsoft under Ballmer or Apple under John Sculley (they thought an exec guy from Pepsi could run a technology company).
The typical process only focused metric MBA guys should come in when the innovating is done and it is time to focus on short term revenues over product, which eventually runs out everytime as it is milked and research and development is killed.
There is a reason Amazon is so successful still, Bezos is an engineer/product guy first that is laser focused on taking profits and putting them back into R&D, hard to beat that as you can see.
That's pretty much any company (with certain variations for different industries).