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Comment by AndrewBissell | Hacker News Reader

With no financing partner in place this is a major cash-negative move for Tesla. Some shorts have been predicting Musk would do this to try and clear out inventory and improve demand optics before filing for bankruptcy.

https://twitter.com/whistlerian1834/status/10965848934824632...

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Shorts, who by definition are not dispassionate and have a direct interest in the ability to project and manipulate market expectations. And when the emerging reality doesn't match their short position are (evidently) willing to move down the road to making the conditions they predicted come true.

Everything you said could be used to describe longs as well, with incentives just aligned in the opposite direction.

Longs tend to own things. Shorts tend to destroy value to acquire it cheap. they don't currently hold it, they're seeking profit by securing it under value. Longs seek to profit from its existence and success.

I don't see these as fully symmetric. I see them as oppositional, and indeed a long will do the things which improve their position. But since thats constructive not destructive, there appears to me to be a useful distinction.

What did I get wrong here?

> What did I get wrong here?

Your assumption that corporate PR is “emerging reality”. Shorts are also capable of revealing reality.

Yes they are and information is useful, but do you think all shorts are informative? and do you think these shorts are? I think these shorts are opportunistic and seek an advantage not an informed position. The longs by and large in Tesla believe about an industrial transformation.

I think musk is a very flawed capitalist, but I think Tesla is interesting as a company. Panasonic is huge. Their decision to invest in the battery plant speaks to me more than the shorts do. Likewise the Chinese decision to invest in the gigafactory. These are not short positions, they are major long-term capital investment which is continuing.

Shorts don't tend to destroy value. That's just a paranoid fantasy invented by incompetent managers to justify their own failures.

Do you include shorts who go out there trashing the name and then wind up wrong? A bunch of tesla shorts have made an industry of being very very vocal. Musk 420'ing on-air has nothing to do with the underlying value of his company or stock in "real" terms, it has a lot to do with temporary risk value, but the shorts played it into ".. see .. evidence tesla is tanking what kind of CEO smokes pot it must be valueless we were right.. " talking.

I don't think all shorts do this. I do think a lot of Musk shorts (relatively speaking) do this.

You haven't provided any evidence that those shorts destroy value.

Shorts have been predicting Tesla's demise for a decade. I would love them to keep making these predictions

Ridiculous argument that Tesla wouldn't be able to offload the leases and receive cash up front.

Lease partners won't give you 100% of the value of the vehicle up front, especially not with vehicles that have uncertain depreciation because the EV space is so new.

So depending on the margin, Tesla could absolutely be in a position where building an SR+ Model 3 and leasing it is cash flow negative (over the first 180 days, so once suppliers are paid).

But it's unlikely to be worse than leaving the factory idle, so if that's the lever they need to pull for the demand to be there, it's a no brainer. And they can always raise more money at their current lofty valuation, so cashflow negative isn't necessarily the end of the world.

Why bother inflating the stock price before filing for bankruptcy? I don’t see the point.

It seems like it’s more about making the long-term forecast look better and getting rid of cash on hand which would otherwise be owed to creditors.

Not saying I buy the argument, but that’s how I understand it.

Yes, and to not head to into bankruptcy with huge lots full of unsold inventory cars scattered about the country. Although I doubt that this leasing option will do much to move inventory.

I do not know what to make of it but these short researchers seem to have found a lot of unsold Teslas. https://www.latimes.com/business/autos/la-fi-hy-tesla-short-...

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