Ex-SolarCity employees: We were fired after reporting millions in fake sales

I would wager that anything in a range 10%-50% of missing revenue, for a publicly traded company, would be caught by external auditor. And I’d im not mistaken, external auditors are required. If I’m wrong on either of those accounts, then I’d be seriously concerned about our stock market.

Ok, I can write out the script for this knowing only the headline.

- Elon defenders will jump in and claim it's all lies

- Elon haters will chime in with "j'accuse!"

I honestly don't know the truth about this (few would) but let me point some things:

1. I would find it strange if sales people were paid bonuses (let alone commissions) on non-real sales.

2. Even if bonuses were paid when no money was paid by the customer, this would eventually get reconciled and at some point pretty quickly that salesperson would get flagged.

3. Knowing that "tens or [sic] hundreds of millions of dollars" was in nonexistent sales would make an officer of the company guilty of any number of securities infractions. Not that this isn't possible of course but the severity of this has to be weighed against the benefits to make it more or less likely that it occurred given the potential outcomes.

4. Was SolarCity a public (note: "public" != "publicly listed") company? If so, there are financial reporting issues too. As well as any obligations to shareholders or financiers.

5. SolarCity was no stranger to lawsuits or government investigations [1].

6. The buyout by Tesla is, on paper, suspect. One way to describe it is: one of Elon's companies (Tesla) bought (arguably "bailed out") a second of Elon's companies (SolarCity) that owed a lot of money it would arguably default on to a third of Elon's companies (SpaceX). Not much happened here remotely resembling at arm's length.

7. People who get fired, rightly or wrong, have their own motivations for speaking out and rarely is it ever to say "yeah, I screwed up" but that's the case at least some of the time. Not that I'm saying it is here (again, no knowledge of the specifics) but just bear that in mind.

8. Ex-employees might be suing (or considering suing) their ex-employer for any number of reasons which may or may not be valid. I suspect if they had good counsel they'd say nothing. If they had bad or no counsel they'd speak about this publicly. So which is it? Who knows.

Anyway, just take a deep breath and fight your natural (and irrational) instincts to either pile on or defend Elon because none of us really know what happened (yet?). [1]: https://en.wikipedia.org/wiki/SolarCity#Litigation_and_inves...

Well first off, I don’t see a time range here. This could easily be stretched over multiple years.

Secondly, if someone says “tens or hundreds of millions”, I assume that they’re giving a rough estimate based on incomplete information. If I’m evaluating the credibility of such an estimate, then I’ll consider the most conservative end of the range, which in this case is $20M. If we suppose that that was spread over three years, then we’re talking about 1-2% of total revenue. That doesn’t sound so implausible, right?

Finally, SolarCity’s 2016 revenue was $730M, not $400M.

>Journalists being critical isn't them launching a war, it's them attempting to leave no stone unturned.

When you only do your job some of the time, it's reasonable to question your motivation. We've had years of Tesla and Musk puff-pieces and it's only in the last few months that journalists have decided to leave no stone unturned en masse.

So, I have no idea what the truth is, but didn't Solar City get bought out by Tesla? In that case, it would seem like it would have been better to clear the books with an audit of past sales, so as to make the price Tesla would have to pay for Solar City, something easier for Tesla to pay. But, I am not a finance person.