Grand jury indicts Trevor Milton, Nikola founder, on three counts of fraud • Hacker News Board

Re: Grand jury indicts Trevor Milton, Nikola founder, on three counts of fraud

#181

Post by nostrademons » Thu, Jul 29, 2021, 4:59 PM UTC

JumpCrisscross wrote: post #139

pinewurst wrote: post #58

Earlier quoted context omitted.

I think this was much more true in the long ago era of regulation, (mostly) autarky, and limited market info/trading barriers. I've looked at "Security Analysis" and it's very much a historical piece - railroads and (practically) buggy whips. Things change relatively faster these days. Yesterday, Kodak was the bluest of chips; today, pretty much a joke. Heck, look at Buffett in the last decade - I'll bet he fully Gra…

> this was much more true in the long ago era of regulation It's still true. We just haven't had, in close to a generation now, the sort of bear market that permits the enforcers of fundamentals to re-emerge: liquidation and bankruptcy against overvaluation; M&A against undervaluation.

Will we? The trend has been for countries to protect their big losers, those underperforming companies that are too big to fail. Started in Japan in the 80s, then Europe in the 2000s, and the U.S. since 2009. Arguably communist countries have always functioned this way, with state-owned enterprises.

The result is a coupling between between the fate of the nation and the fate of its major employers, with loose monetary policy, regulatory capture, and explicit fiscal bailouts to protect it. Then instead of the deadwood being cleaned out, the whole country becomes deadwood, and you get lost generations and social unrest as the only way to throw out ways of doing business that aren't working is to throw out the people in power.

Re: Grand jury indicts Trevor Milton, Nikola founder, on three counts of fraud

#182

Post by jfb » Thu, Jul 29, 2021, 5:00 PM UTC

ajross wrote: post #98

RC_ITR wrote: post #38

Earlier quoted context omitted.

Hey, you’re not going to like hearing this, and feel free to ignore, but $TSLA is c. 20% below it’s peak valuation and still is trading at 100x earnings on pretty mediocre growth. It’s still wildly overvalued, people don’t talk about it as much though since the price is flat, not up. Be careful of confirmation bias.

Tesla wasn't faking videos by rolling a nonfunctional truck down a hill. They're shipping almost a million cars a year now (looks to be like 850k in 2021 I think). Mine took me to Yellowstone a few weeks back. Now, sure, "overvalued" is a very reasonable argument. I'd even agree. That's not the kind of rhetoric that was deployed against the company and you know it. Which is why people didn't believe folks screaming t…

Right, these are very different things. I am very bearish on Tesla, but they are shipping cars!

Re: Grand jury indicts Trevor Milton, Nikola founder, on three counts of fraud

#183

Post by shawnz » Thu, Jul 29, 2021, 5:01 PM UTC

chasebank wrote: post #110

shawnz wrote: post #70

Earlier quoted context omitted.

Yes, but what about all the speculation that happened that didn't lead to bubbles and actually led to improved market efficiency? My point is that you can't just look at the most obvious examples of past bubbles with full hindsight and say that all speculation is a net negative because of those.

Yes, of course, some speculation can lead to improved market efficiency. I suppose we should define at what level of speculation deems a speculative market. "I think most research shows that a moderate amount of speculation actually decreases volatility and makes market manipulation more difficult." I'd be interested to read such research. To me, this current craze (Stocks, housing, crypto, etc) just doesn't pass the…

> I'd be interested to read such research.

See here for example: https://www.bankofcanada.ca/wp-content/uploads/2015/11/wp201...

> It doesn't make sense. I tell my friends, either things correct in a large way or we're going to be eating $50 cheeseburgers.

Why not? My parents paid 50c for a cheeseburger in their youth and now I pay $5. What doesn't make sense about inflation? It is the expected way in which our market works.

Re: Grand jury indicts Trevor Milton, Nikola founder, on three counts of fraud

#184

Post by ren_engineer » Thu, Jul 29, 2021, 5:02 PM UTC

misiti3780 wrote: post #46

rwmj wrote: post #40

Earlier quoted context omitted.

Are you claiming that Tesla vehicles are fraudulent and only drive when rolling down hills?

The number of Tesla haters on HN is bizarre.

Musk is pretty much the dream of what every nerd wants to become. There's a lot of jaded people on HN who think they are just as smart/talented as Musk but don't have anywhere near the success.

They deal with the cognitive dissonance by calling him a fraud/scammer or wanting to see him fail. Fanboys of Musk aren't much better, Musk just seems to attract extremists on either side of the aisle who either love him or hate him

Re: Grand jury indicts Trevor Milton, Nikola founder, on three counts of fraud

#185

Post by ricardobeat » Thu, Jul 29, 2021, 5:03 PM UTC

> The SEC asked the U.S. District Court of the Southern District of New York to permanently bar him from acting as an officer at a company that issues securities, to disgorge all ill-gotten gains and pay a fine

Prison? Where is the prison part?

Re: Grand jury indicts Trevor Milton, Nikola founder, on three counts of fraud

#186

Post by detaro » Thu, Jul 29, 2021, 5:04 PM UTC

ricardobeat wrote: post #185

> The SEC asked the U.S. District Court of the Southern District of New York to permanently bar him from acting as an officer at a company that issues securities, to disgorge all ill-gotten gains and pay a fine Prison? Where is the prison part?

Sentence before:

> The Securities and Exchange Commission > also filed civil securities fraud charges against Milton on Thursday.

The SEC is not involved in criminal proceedings which could result in prison or other criminal penalties, so no point looking for that in the parts of the article that discuss the civil actions of the SEC.

Re: Grand jury indicts Trevor Milton, Nikola founder, on three counts of fraud

#187

Post by tibbydudeza » Thu, Jul 29, 2021, 5:05 PM UTC

rvz wrote: post #49

ffggvv wrote: post #34

now do elon

Like many famous people that have a massive cult following, some people like the current Tesla CEO, are allowed and able to get away with lots of fraud and can still continue to mislead their own customers. Like the dangerous and faulty 'Full Self Driving' software that is killing their customers. [0] The villains of this week is Trevor Milton and Nikola Motors. Tesla will probably get away with [0] no matter how man…

Like MLM's - just cultism.

Re: Grand jury indicts Trevor Milton, Nikola founder, on three counts of fraud

#188

Post by JumpCrisscross » Thu, Jul 29, 2021, 5:06 PM UTC

Apocryphon wrote: post #150

ethbr0 wrote: post #87

Earlier quoted context omitted.

In times of plenty, where money flows and pools drives stock prices. In times of poverty, fundamentals drive stock prices. We've been in a time of plenty for a historically abnormally long period.

And the time of plenty is primarily driven by monetary policy, is it not?

> plenty is primarily driven by monetary policy

Short-term market cycles are always driven by credit, which is in turn driven by monetary policy.

Re: Grand jury indicts Trevor Milton, Nikola founder, on three counts of fraud

#189

Post by aeternum » Thu, Jul 29, 2021, 5:06 PM UTC

yup00 wrote: post #155

_game_of_life wrote: post #48

This should not be surprising to anyone. Arstechnica has followed Nikola's terrible and obvious fraud(s) for years now: https://arstechnica.com/cars/2021/02/nikola-admits-to-making... https://arstechnica.com/cars/2020/12/nikola-stock-craters-af... https://arstechnica.com/cars/2020/09/nikola-patented-a-stole... And many more... The speculation around this stock has been insane for many years now: https://arstechnica.c…

Financial markets are not coupled to real economics anymore. They’re coupled to speculative gamesmanship. Whoever can generate statistics to captivate the masses who do not understand them, via press releases, and media blitzes. That sounds cynical, but I “hob nob” with people invited to Davos, and run depts at Ivy League schools. Behind closed doors these are the conversations I’ve been privy too. How to captivate t…

Marketing matters a lot, and NKLA was quite popular or even infamous there. A known brand does have value, even according to 'real economics'.

Most investors seem to have been valuing that aspect and completely discounting the engineering/tech.

Re: Grand jury indicts Trevor Milton, Nikola founder, on three counts of fraud

#190

Post by woodruffw » Thu, Jul 29, 2021, 5:06 PM UTC

rchaud wrote: post #158

woodruffw wrote: post #42

Earlier quoted context omitted.

That deli isn't "worth" $100 million: it's thinly traded on an underregulated market (OTC). The headline is eye popping and drives readers; the more mundane reality is that the deli's 60-or-so shareholders can stake whatever prices they want between each other without ever realizing an actual valuation of anywhere near $100 million. This is in contrast to Nikola, which is currently listed on Nasdaq and appears to hav…

This is exactly how startup valuations work though. Some minor chunk of equity gets bought up by an investor, so by extension the entire equity of the company is now worth billions on a per-share basis.

> Some minor chunk of equity gets bought up by an investor, so by extension the entire equity of the company is now worth billions on a per-share basis.

This prospective valuation is based on the assumption that the company eventually either goes public on a reputable, retail exchange or is bought for some reasonable fraction of the expected share price. Neither of these is or would be true for the deli.

But I think your overarching point is an excellent one, and it's exactly why I'm skeptical of the valuations implied by fractional VC investments. Especially when they're tied to the Uber model.