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Tesla Enters “Whistleblower Hell”

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Re: Tesla Enters “Whistleblower Hell”

#41

Post by solveit »

fouc wrote: post #26
twblalock wrote: post #18

Earlier quoted context omitted.

There is nothing wrong with shorting Tesla. Short selling is a necessary corrective to overhyped stocks. If the short sellers are wrong about Tesla being overpriced, they will pay for it. They are taking all of the risk, and they are not hurting anything except Musk's feelings.

Apparently there's a bit more to that. Tesla is very leveraged right now and apparently it would be an issue if the share price dropped too much, forcing Tesla to do some sort of liquidity event? So the big short sellers are trying to force the share prices down enough that Tesla is forced to deal with this, which would push the share prices down even more and let them profit hugely.

That kind of scheme fails spectacularly if people know it's happening. It's really really hard to make money by deliberately mispricing something.

Re: Tesla Enters “Whistleblower Hell”

#42

Post by maest »

kemiller wrote: post #31
kec wrote: post #12

Earlier quoted context omitted.

But which is the more likely causes of this: That TSLA is the victim of an evil coordinated effort to cause the company to take, or just that 30% of the market genuinely believes they're overvalued. Given they have a higher market cap than either Ford or Honda, I'd be betting on the latter....

When you consider how rich and well-connected the players who stand to lose if Tesla wins, I don’t think it’s at all crazy to suggest that they are using some of that wealth to slow them down. If you happen to have 10 billion hanging around and there are billions more on the line, it’d almost be stupid not to. There’s no law against malicious short selling assuming you’re not outright lying about them in print. Oil c…

Are you suggesting Exxon Mobil is placing huge short bets on Tesla? How would that affect the company apart from deflating the share price?

At a stretch, it might make it more difficulmore expensive for Tesla to refinance/raise capital via issuing stock, but that sounds like really bad ROI for billions of dollars.

Re: Tesla Enters “Whistleblower Hell”

#43

Post by smallgovt »

vikramkr wrote: post #4

Tesla (or at least Elon) has a terrible habit of engaging with critics in deeply unproductive ways, such as all the anti short seller stuff they pulled. It makes them look very defensive and seem like they feel vulnerable/cant face the criticism, and maybe it's because they actually are vulnerable and doing things that merit short selling and whistleblowing. At least from a PR perspective you dont want to engage like…

> At least from a PR perspective you don't want to engage like this if you have nothing to hide.

Responding in public fashion is a rational choice for TSLA to make assuming:

1) There exist short sellers who are willing to engage in malicious activities that hurt shareholder value

2) Publicizing their efforts to fight back against said actors acts as a deterrent for further malicious activity.

I don't know for sure, but I think there's a reasonable likelihood that both these statements are true.

Re: Tesla Enters “Whistleblower Hell”

#44

Post by sjwright »

vikramkr wrote: post #7
drcross wrote: post #5

Earlier quoted context omitted.

Short sellers have been causing the company a lot of trouble, Musk is correct in pointing them out so that their activities become known.

No, they really haven't. The best way to deal with shorts is to have a good quarter and crush them all. Or wait for a short squeeze. Lots of companies have misinformation spread by shorts all the time, but very few companies engage and attack shorts.

I think it's fair to say that Tesla managed to do both.

https://www.forbes.com/sites/antoinegara/2019/03/05/after-ho...

Re: Tesla Enters “Whistleblower Hell”

#45

Post by __blockcipher__ »

r00fus wrote: post #33
vikramkr wrote: post #4

Tesla (or at least Elon) has a terrible habit of engaging with critics in deeply unproductive ways, such as all the anti short seller stuff they pulled. It makes them look very defensive and seem like they feel vulnerable/cant face the criticism, and maybe it's because they actually are vulnerable and doing things that merit short selling and whistleblowing. At least from a PR perspective you dont want to engage like…

Disagree that short-sellers somehow get to be grouped with whistleblowers. That’s whitewashing them. They are foreign actors with literally a negative stake and deserve to be treated as adversaries.

> They are foreign actors with literally a negative stake and deserve to be treated as adversaries.

No, they’re market participants who are taking an opposing view to the longs, and by doing so are allowing the longs to purchase further ownership of TSLA at a reduced price relative to if there were no short sellers.

Re: Tesla Enters “Whistleblower Hell”

#46

Post by __blockcipher__ »

fouc wrote: post #26
twblalock wrote: post #18

Earlier quoted context omitted.

There is nothing wrong with shorting Tesla. Short selling is a necessary corrective to overhyped stocks. If the short sellers are wrong about Tesla being overpriced, they will pay for it. They are taking all of the risk, and they are not hurting anything except Musk's feelings.

Apparently there's a bit more to that. Tesla is very leveraged right now and apparently it would be an issue if the share price dropped too much, forcing Tesla to do some sort of liquidity event? So the big short sellers are trying to force the share prices down enough that Tesla is forced to deal with this, which would push the share prices down even more and let them profit hugely.

> Tesla is very leveraged right now and apparently it would be an issue if the share price dropped too much

In other words, the shorts are totally right to be taking their position? A company that depends on its stock price to stay afloat is not a healthy company. Let’s take AAPL as an example. Their stock could plunge to $1/share and they would be absolutely fine because they have positive free cash flow, and thus don’t need to rely ok raising capital via selling shares.

Re: Tesla Enters “Whistleblower Hell”

#47

Post by stonogo »

imfromit wrote: post #30

Can someone explain to me (a simple European scrub) why these sorts of lawsuits seem to invariably target Elon directly? Surely they should be directed at Tesla, you know the company that employed them? Does adding Elons name to the lawsuit actually do anything in US law? Or is it merely to gain publicity by adding celebrity to a complaint?

The Sarbanes-Oxley act requires corporate leadership to take personal responsibility for the accuracy of certain company-generated reports. This lawsuit is against both Musk himself and Tesla the company.

Re: Tesla Enters “Whistleblower Hell”

#48

Post by repsilat »

twblalock wrote: post #18
drcross wrote: post #5

Earlier quoted context omitted.

Short sellers have been causing the company a lot of trouble, Musk is correct in pointing them out so that their activities become known.

There is nothing wrong with shorting Tesla. Short selling is a necessary corrective to overhyped stocks. If the short sellers are wrong about Tesla being overpriced, they will pay for it. They are taking all of the risk, and they are not hurting anything except Musk's feelings.

> they are not hurting anything except Musk's feelings

Investors help companies, right? They add to the demand for the stock, and keep the price up. Stockholders have invested in the company. When shares are created and sold, the new stockholders inject capital into the company, and when shares are re-sold that property of "have injected capital into the company" is in some moral sense transferred at the same time.

Short-sellers do the opposite -- they depress the price of the underlying. If short seller S borrows TSLA from holder X and sells to Y, two people are long TSLA (X and Y), but there is only one share between the two of them. If S hadn't been there, the stock price would be higher.

From the perspective of market efficiency (and the economy) I agree that short-selling is important. I wish it were easier to do. From the perspective of individual companies, though, short sellers are directly harmful to their success.

Re: Tesla Enters “Whistleblower Hell”

#49

Post by sjwright »

marmada wrote: post #36
breck wrote: post #23

Earlier quoted context omitted.

Also about 10 pedestrian deaths happened this afternoon from non Teslas, driven by humans. And 20 yesterday. So I wouldn't jump to conclusions about whether "AP" will be banned anytime soon. Source: https://www.cdc.gov/motorvehiclesafety/pedestrian_safety/ind...

What is this statistic supposed to prove? I would expect there to be more deaths from non-Teslas because non-Teslas make up a majority of the market and furthermore not every person with a Tesla uses autopilot and even those who do use autopilot do not use it all the time, so the chance the autopilot makes a mistake is minimized. We do not know if autopilot reduces the number of deaths, so let's not overhype this tec…

You seem to be under the misapprehension that 1 pedestrian death equals 1 pedestrian death per day.

Just because one rando on the internet makes an "if autopilot" argument doesn't make it so. Even if that were the case, you are under the misapprehension that any blame should ever go to augmentation technologies for the actions of a licensed driver—whether that action be turning a wheel or pressing a button.

Re: Tesla Enters “Whistleblower Hell”

#50

Post by tenpies »

r00fus wrote: post #33
vikramkr wrote: post #4

Tesla (or at least Elon) has a terrible habit of engaging with critics in deeply unproductive ways, such as all the anti short seller stuff they pulled. It makes them look very defensive and seem like they feel vulnerable/cant face the criticism, and maybe it's because they actually are vulnerable and doing things that merit short selling and whistleblowing. At least from a PR perspective you dont want to engage like…

Disagree that short-sellers somehow get to be grouped with whistleblowers. That’s whitewashing them. They are foreign actors with literally a negative stake and deserve to be treated as adversaries.

> adversaries

They are literally paying you, the Tesla long/holder, for the privilege of borrowing your shares or buying options that you are selling. If you own shares and believe in the company, you should be absolutely in love with short sellers because their activities net you money. Nothing a short seller can do will destroying a financially secure, sound company. Nothing.

Meanwhile you get to collect interest on borrow rates for your shares, or write options that will expire worthless, netting you tremendous premium.

I honestly think that most retail investors do not understand short selling at all. They just think "they want the stock to go down = bad" without considering how costly being a short seller is. Short sellers are constantly on a fuse, but if you're long your time horizon is much more forgiving.

Now if you are afraid that the company shares you own could become worthless tomorrow because of cashflow issues, huge debt burden, and a CEO with a notorious history of being unable to tell the truth - that's a completely different issue. It's not really the short sellers who caused any of those issues now is it?

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