Time May Be Running Out For Those Betting Against Elon Musk / Tesla

Elon Musk

JUN 14 2018 BY EVANNEX 79

FOR THOSE FIGHTING ELON MUSK AND TESLA, THE CLOCK IS TICKING

Tesla haters are coming out of the woodwork everywhere. That said, there could be some underlying urgency for this sudden, sweeping attack. According to Giles Parkinson (via Renew Economy), “It seems that Elon Musk’s detractors – and they are legion – have decided that it may be now or never if they have a chance of stopping the founder and CEO of Tesla in his tracks.”

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: Tesla’s Model 3 (Image: InsideEVs via Turo)

Of course, the battle with Wall Street’s short sellers remains front-and-center. But, there are others factions too. Parkinson notes that “the criticism of Musk and Tesla becomes blurred between financial self-interest, ideology, and techno-phobia… So what is really bothering these people?”

One reason: “Musk’s ambition is writ large on Tesla’s website. ‘The goal of Tesla is to accelerate world’s transition to sustainable energy,’ it says. And Musk himself usually goes a lot further than this, calling for a ‘revolt’ against fossil fuels, and calling for the removal of $5 trillion of fossil fuel subsidies that is slowing the transition down, which he says could be done in 15-20 years.”

Above: Tesla’s Model S (Image: Tesla)

Clearly, this could be “a scary scenario for both ideologues and incumbents. Musk, and Tesla, threaten to disrupt not one, but three trillion-dollar industries and turn them upside down – auto, electricity, and transport fuels.”

When analyzed through this lens, it’s understandable that “everyone from the far right, through to car salesmen, property managers, big investors, fossils fuel giants, coal generators, conservative politicians and commentators, and Big Oil do not want him to succeed. They grudgingly admit that the clean energy transition is coming, they just don’t like the speed with which Musk is bringing it.”

Above: Analyst Ben Kallo at Baird recently noted that negative news coverage surrounding Tesla was “increasingly immaterial” (Youtube: Investing.com)

Regardless, it’s crunch time for Tesla and Elon Musk. Parkinson concludes, “If Tesla continues to struggle with the production issues with the Model 3, then it could become vulnerable… [but] if the issues are resolved, and Tesla is delivering profits by the end of the year, then Tesla the company – and the energy transition – will likely be unstoppable, and mighty quick.”

===

Source: Renew Economy

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

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79 Comments on "Time May Be Running Out For Those Betting Against Elon Musk / Tesla"

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(⌐■_■) Trollnonymous

Feather off the OPEC wellfare by cutting Fossil Fuel subsidies!!!!

Reallocate a small chunk of those subsidies to help EV Adoption, some for infrastructure maint/repair/expansion and send the rest to help Public Education!!!! Improve Schools!

JMB

greed, ignorance and the insatiable need for financial, political and social powers are the problems…

So much is at stake … clean air, improved health, and so many new job opportunities in support of the transition.

mx9000

With now, 3 assembly lines running, and commercial scale battery storage coming on strong, this is a Dangerous time to short Tesla.

But, if you’re in the Streaking-Alpha bubble…

mx9000

The fact that Jag has 40,000 orders for the i-Pace, also, Ford getting out of cars, seems to be showing an on going tipping point.

MoMac

“Ford getting out of cars”

A more accurate statement would be: Ford is getting out of cars in North America, with the exception of the Mustang and Focus Active.

Or another way of putting it is that Ford will stop selling the Taurus, Fiesta and Focus (except Focus Active) in North America by June 2019.

They don’t sell many different sedan and coupe models in North America to begin with.

Clive

If they don’t get creative the Mustang will go away soon enough!

mx9000

Tesla up at 354 at 1:37.
Cramer admires Tesla “from afar”.
I still can’t get how these guys never look at the balance sheet and the asset growth of this company? Geometric growth for 7 years. And as has been reviewed by a Seeking Alpha analysis, Tesla is in better financial position than GM and Ford, who both can’t afford to build out like this.

Dave

Tesla’s balance sheet? Look at that and you will believe seeking alpha… any company with more current liabilities than current assets is scary… That is structurally bankrupt… Tesla absolutely has to get more revenue, and reduce cost or the end will not be pretty.

mx9000

Tesla’s debt is tied to assets. GM and Ford no.

Dave

I am not talking about Debt… I am talking about current liabilities… for those that do not know accounting, that means bill that are due to be paid. Debt is another subject for another day…. At the end of Q1 2018 Tesla had + or – 8B in current liabilities and + or – 6B in current assets. That means the business is 2B short of paying their bills on time, that can be rectified by extending vendor credit terms, or taking on more debt, or selling more equity, but any way you look at it, its not a good thing…

Lamata

Don’t lose any sleep over Tesla Not Paying their Bills…lol

Dave

I don’t, but I did see some new lawsuits filed against Tesla for non payment

Nix

Your numbers are completely wrong. You are only listing “Current Assets” and “Current Liabilities” from Tesla’ s balance sheet, while completely ignoring Tesla’s LONG TERM numbers, which completely dwarf those numbers by a full order of magnitude. This is Tesla plowing money into long term investment into their future, which will pay off over time.

Total Assets: $27 Billion
Total Liabilities: $23 Billion

Why such willful blindness and/or short term thinking?

Nix

Dave– To make it even worse, you pretend that all the “Current Liabilities” are in the form of cash that Tesla would have to pay out, which you either know (or should know) is false. $1 billion of those liabilities alone are in the form of convertible bonds that given current stock price trends will NEVER have to be paid in cash by Tesla. They will simply be converted in stocks.

I’m not sure if you are distorting the truth so badly because you simply don’t know the details, or if you are intentionally misrepresenting the facts because you are a liar. So which is it? Is it a simple mistake, where you should easily say “my bad, I didn’t know the details” and be done with it? Or are you simply a fibbing troll who will continue to try to flim-flam us?

Dave

I am just telling you what current liabilities mean in accounting terms, its money the company expects to pay out before the end of the next reporting cycle.

Gasbag
It sounds like your understanding of accounting is a bit muddled. You seem to have current assets confused with quick assets. Current liabilities are not bills that are due. They are those which will be due within 12 months. Contrary to the picture you paint based on your misunderstanding there is little probability that Tesla will have any problems paying their bills. Any time soon. If you honestly believe what you’re writing then now would be a great time for you to execute a leveraged short. Go ahead. Put your money where your mouth is. Tesla used a portion of their credit line a while back to the tune of 1.3 billion when their stock value was significantly lower than their current value. A portion of that is due in Nov with the balance due in Q1of 2019 so all of that is on the balance sheet. Using their credit line rather than an equity offering makes a lot of sense if you anticipate that your stock value will be rising. Why sell stock at 200 per share when you can take a short term loan and sell at $400 Per share?
dan

What do you call someone with a billion dollars of illiquid assets, 99 dollars in the bank, and a 100 dollar bill to pay at the end of the month?
Clue: It starts with bank and ends with a rupt.

Dave

Actually if you have liquid assets that would be called rich… Liquidity is what Tesla is short of.

dan

Did you read my comment? illiquid is the opposite of liquid.

A factory is illiquid. A treasury note is very liquid. Dollars are liquid. Bitcoins and tulips are shiny and pretty, respectively.

mx9000

Like NIX is pointing out below, you’d not only give that guy, with future sales of 1.2 to 1.8 million cars, the best seat in the restaurant and a free dinner, you’d give him free rent for some stock.

It’s clearly a question of perspective, your perspective simply can’t see those future sales turn into current sales. But, they are right now. Musk has a long track record of success. “Invest in Management.” — Warren Buffet.

Dave

That why Buffet invested in BYD? Not Tesla…

mx9000

He invested in the Chinese market, and with Chinese government mandates for EV’s that was a smart bet, a bet that is risk free, with continued government backing. So, I’d say Buffet when first with the least risk investment.

Dave

Where are those cars going to be built? Fremont is arguable capable of less then 300K a year…

mx9000

Mr. Musk has just finished building his third assembly line for the Model 3. He’s stated that he will move car production right next to battery production. So, that would mean a Nevada assembly line next, if it’s not already being assembled right now.

And note, he was shipping batteries by truck from NV to CA, and decided to build an electric Semi, for fuel savings. Now, there will be no shipment of batteries, and no fuel expense at all for shipment. No Shipment Expense, except for completed cars.
And NV is closer to Canada and the East Coast.

Tesla seems to have a continuous review process to reduce cost.

mx9000

But, you know, the Apple iPhone first came out and many predicted Apples bankruptcy as a result. We all have different experiences in life.
I, as a programmer see nothing remarkable about the Facebook app. And that product alone clearly doesn’t justify Facebooks price. But, with Facebook the simple web site isn’t the product. Your data-mined life is. I wouldn’t put a penny into Facebook. But, Wall Street Jumped in and made a fortune.

Dave

Actually Apple was rocking and rolling on iPod, when I-Pahone was just an idea

Paul Smith

No, that’s what you call a short seller.

Get Real

LMAO at jealous “Dave” touting Seeking Shorters, how appropriate!

It is your (and the other shorter trolls like gaggagme and little dan’s) shorter arguments that are bankrupt as Tesla has over 20 Billions$ in orders for the Model 3 which is ramping up speedily now and as more and more of these excellent cars get out there the order book will continue to grow. And the fact that only Tesla thus far has built up the battery capacity to truly mass-produce compelling, long-range BEVs.

In fact, the Model 3 looks like it will absolutely dominate the mid-size luxury/sport sedan segment just as the Model S has totally dethroned the German’s former stranglehold on that lucrative segment in both the US and Europe. That is right, only little tiny, upstart Tesla has done what no other American auto OEM could accomplish–beat the Europeans at their own game in the luxury/sport space.

With their building capacity and electric eco-systems approach along with unparalleled customer satisfaction and mindshare, be prepared for ever more rapid expansion by Tesla and the massive profits that will follow.

Meanwhile, you will follow your small-ball, can’t see the forest for the trees frustrated accountant approach and let this opportunity blow you by.

Nix

Even more astounding, is that even after the reservations are over, third party analysts have said that the first 5 years of Model 3 sales will likely be in the $80 Billion to $120 Billion range. And these jokers are worrying about the small numbers.

arne-nl

“small-ball, can’t see the forest for the trees frustrated accountant approach “

priceless

Nix

Dave, thanks for explaining how Tesla is NOT “structurally bankrupt”, since Total Assets actually are ~ 20% higher than Total Liabilities (3/31/2018 numbers):

Total Assets: $27,271,429
Total Liabilities: $22,820,734

Tesla has actually been growing assets FASTER than liabilities over the last couple of years. Which just shows yet another layer where Tesla is growing. Numbers are straight from NASDAQ. Why do you insist on lying to everyone here?

Nix

Dave blathered “Tesla absolutely has to get more revenue, and reduce cost or the end will not be pretty.”

Wow, it is like you don’t even have a clue that the end result is of dumping a ton of money into building out all the factory and infrastructure and development of a new product line!! The end result is building a bunch of new product that you THEN sell for new revenue.

Did you seriously think the revenue from a long-term factory expansion would come BEFORE the ramp up was near completion? Heck, you seem to know less than the Underwear Gnomes!! At least they knew the difference between step 1, step 2, and step 3 (profits). Are you seriously the only person who doesn’t understand the timeline between building out a new product, and when the revenues come in?

Why do you come here just to embarrass yourself so badly?

mx9000

Well the short keep saying Tesla is “burning cash” to the point where they actually think Tesla is burning cash, literally. LOL.

Mister G

354 WOW Bro1999 aka Bob Lutz is blazing mad LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS thanks for caring

Ron Swanson's Mustache

Every time you post something like this, Paul Ehrelich entertains the notion of fathering a half-dozen kids.

Vexar

I read the article and thought “Oh, I hope Mister G posts!” Don’t ever change that great big heart of yours, man.

gagaga

Teslas Balance sheet, as well as the P&L are a desaster. Did you read them?
I do since about 3 years, and I have some experience in reading balance sheets.

Tesla “haters” are simply realising, that here is a dramatic disconnect between reality and stock price, ab tremendous bubble.

The current movement of the stock has nothing to do with fundamentals, it might very well be a short squeeze. No idea how far this will get – but Short squeezes are temporary phenomenons. At the long end, the laws of gravity always win.

Dave

There is certainly a disconnect… but thats Ok, I felt Apple was the same for many years. Oh, but Apple actually had profits…

Nix

If you are basing your investment decisions on ANY high growth company based upon comparing their balance sheets to what a DOW company balance sheet looks like, you’ve already made your first error. The balance sheet is a backwards looking indicator. Just like driving, if you are investing by JUST looking in the rear-view mirror, you are going to crash and burn.

Tesla’s balance sheet reflects their heavy investment into future profits. If you aren’t looking at future ROI at the same time you are reading the balance sheet, you’ve failed. It is like looking into the darkness of the night, and proclaiming it is the “End Of The World!!” with eternal darkness because you failed to account for the fact that the sun will light the sky once it rises.

Specifically, what problem do you see in their balance sheet that looks problematic compared to your 5 year projections on future revenues?

Gasbag

“Teslas Balance sheet, as well as the P&L are a desaster. Did you read them?
I do since about 3 years, and I have some experience in reading balance sheets.”

You’re the one who thought the recent layoffs were a sign of desperation. You obviously don’t know how to read the signs. I don’t think you know enough about the business side to even realize how embarrassed you should be. When you get to that realization you will almost certainly change your handle.

gagaga

the really big times for shorting Tesla are about to come. Once this squeeze reaches its peak (ok, its hard to know, when this is…) there will be a great opportunity.

Nix

…or you might get absolutely crushed when that “peak” is a false summit and the stock just turns higher and stays higher. You are like the old lady playing slots who tells everybody about her huge jackpots, but never does the math to add up all the losses that greatly exceed the jackpots.

Yea, some people absolutely will make some money by getting lucky on market timing. But those profits will be illusions when compared to all the money lost by shorters.

I remember when TSLA was $30 bucks, and when shorters saw it go past $100 they all claimed it was such a great short opportunity, because it had to come down (before the company went bankrupt, of course). Guess what? Tesla stocks NEVER dropped below $100 again. Your analysis is a deep as a Cubs fan saying for 108 years that they have to win a championship some day. Yea, it can happen, but it also might be an entire lifetime before it does.

mx9000

To me, I see a lot of people who think themselves very smart who are showing extreme envy of Tesla and Musk’s accomplishments. These are the guys who said it couldn’t be done, and then have to watch Tesla do it.

Exactly. They don’t like the speed. And so the Scream for “Profits”.
Which would only slow Tesla down.

Not that Dave

Disco Inferno on repeat. Burn the mother down.

Anti-Lord Kelvin

“First, they ignore you. Then, they laugh about you. After that, they fight you (its seems that where we are now). Then…you win”.

Terawatt

Tesla haters aside, I’m becoming an Evannex hater. Every article is an ad for Tesla, and thus themselves. In my country this would have to be clearly marked as sponsored content and not look like just another article in order to be legal at all.

Joe

I completely agree with you.
They are not honest articles. Thé guys sell Aftermarket gear for Tesla.

darth

I agree EVANNEX is a Tesla “rah rah” site. But InsideEVs does put this disclaimer on every EVANNEX article:

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

is that not sufficient?

MoMac

EVANNEX shills for Tesla. The more Teslas sold, the bigger EVANNEX potential market.

I would hope that as there is are more and more EV models introduced each year, that by 2020 or 2021, Insideevs stops using EVANNEX articles.

It is somewhat understandable right now as daily EV news is somewhat limited, but there should be more EV new stories in 2020 to 2022 as a lot more EV models come to market, so that would be an opportunity for insideevs to become more objective and stop the EVANNEX articles.

Vexar

The same logic can be applied to several mainstream media outlets, so I hope you are diligent on that front. I choose to ignore mainstream media, principally because it’s a lot of work to unravel their bias.

Nix

If you don’t like the Evannx synopses of the original story, just go read the original:

https://reneweconomy.com.au/why-so-many-people-are-so-desperate-for-tesla-and-musk-to-fail-93953/

What problem do you have with the actual original story, that had nothing to do with evannx?

Nix

Evanex had absolutely zero to do with the actual content of this story. It is all just them quoting some else.

Your complaint is like saying Malania is to blame for Michelle Obama’s speeches being too optimistic.

ffbj

It’s already over. Now it’s just giant mopping up operation, that will takes years, We can expect to see normal cars, not evs sales fall for years to come, as a combination of forces strike down the legacy auto industry.

Mister G

GO TESLA GO DESTROY DIRTY GAS GUZZLERS AND DIESELS LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS
Antarctic ice sheet is melting 3 times faster according to latest multi research report.

Ron Swanson's Mustache

Every time you post something like this, Patrick Moore shoots a seal through the head with a revolver.

Mark.ca

Don’t like seals anyway, they are too aggressive. I’m more of a dolphin type of guy,

ziv

As long as you don’t like penguins, I am ok with that. Penguins are evil. Everyone cuts them slack because they dress formally all the time.

William

As long as it’s not a precious endangered baby Harp Seal, then Patrick Moore can do no real harm, with his relentless culling of the herd.

I just wish Mr. Moore would use the standard issued clubs, that are common place these days.

My selective Walrus vision, doesn’t like to
“See how they run like pigs from a gun”.

“I am the Walrus
Goo goo g’joob “

Mister G

Is Patrick moore and relation to Roger Moore the british deceased actor? CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS

Ron Swanson's Mustache

Patrick Moore was one of the founders of Green Peace.

Nix

Yea, but was he related to Roger Moore or not? That’s what’s really important. Not only did Roger Moore drive the underwater Lotus now owned by Elon Musk, but he traded his supercar for an EV!!

https://www.thesun.co.uk/archives/news/952120/live-and-let-drive/

I guess if this Pat guy was related to Roger, he might be interesting. otherwise, booooring.

//SARC
//SARC
//SARC

F150 Brian

If Tesla was attempting to disrupt the transport fuels business as the article suggests, they’d be selling adapters and contracts to use their supercharger network with non-Tesla vehicles.

When will that disruption start?

William

That disruption your waiting for won’t start, or happen anytime soon, unless Tesla gets a ridiculous cash offer, from a LICE major, that they simply can’t refuse!

You can pretty much rule out most, if not all of the LICE majors, as they are patiently waiting for St. Elon to fall on his sword, in a looming Tesla operating capital cash crunch. However, the ship that those LICE OEMs are waiting for, might just steer clear of the harbor altogether.

Vexar

As soon as other manufacturers make one phone call. It’s not up to Tesla here. Also, a random EV can’t pull up and plug in. There is a communications layer missing, as well as billing. “the next time you visit a service center” is when you pay your Tesla Supercharger bill (for those who waited long enough that it isn’t free). Solve how that works for the Bolt EV and you actually have a viable business on your hands.

Nix

1) Tesla has already offered every car maker in the world the option to join the network and help fund the network. They all refused, and have done little to build out competing networks. Why are you going after the company that has acted, instead of the companies who sat by the sidelines whining?

2) Who says Tesla won’t do that some day, once they have built out surplus charging locations more than enough to power their own massively expanding fleet? Do they have to do everything even faster than they have already been expanding to make you happy? Have they not been building out superchargers fast enough for you? What other Car Manufacturer do you think has been building chargers faster?

Amazing how some people complain about Tesla not doing enough, or moving fast enough!!!

Nate

In the list of groups supposedly not wanting Tesla to succeed Evannex lists one that I do not follow the logic on – property managers. Anyone care to elaborate?

ffbj

Well I did read the original article and they merely just chuck it in there with their list of groups not liking Tesla: https://reneweconomy.com.au/why-so-many-people-are-so-desperate-for-tesla-and-musk-to-fail-93953/
The quote in question: “That is a scary scenario for both ideologues and incumbents. Musk, and Tesla, threaten to disrupt not one, but three trillion-dollar industries and turn them upside down – auto, electricity, and transport fuels.

Which explains why everyone from the far right, through to car salesmen, property managers, big investors, fossils fuel giants, coal generators, conservative politicians and commentators, and Big Oil do not want him to succeed.”

My supposition would be that oil leases, car factories, dealer lots, anything that sits on land and is part of the legacy car industry would be hurt, thus managers of those properties would be too.

One thing to add is that Trump is trying to put tariffs on cars coming into the U.S. Yes that is back on the table. Which is really another help to Tesla, and adding insult to injury in regards to imported cars, and also domestic companies who have a lot of vehicles made in Canada & Mexico, and brought into the states, GM & Ford for example.

arne-nl

Boring company/hyperloop?

Suddenly living far from your work isn’t that impossible anymore.

William

Where is Jim Chanos, and his Tesla short CNBC statement from yesterday, “not enough gross margin to make money”?

Kynikos Associates, and their thesis to short Tesla down to $0.oo, is going along for a ride, on this latest Tesla run, which seems headed back up to $380.00.

Mike W

Go Elon!!!!!

Another Euro point of view

What we see here is fear of missing out reaction from investors as a side product of confidence on model 3 production rates if I understand it correctly. So markets are still acting as a voting machine as opposed to a weighing machine as far as Tesla is concerned. If profitability really comes (2 consecutive quarters of net profits for a start) then investors should probably start to be concerned as weighing machine will be switched on.

Mark.ca

Oh, i get it now. For Tesla, bad news is bad news and good news is bad news. Anything else?

Nix

The majority of TSLA share holders are Institutional Investors, like banks and investment firms. I think they are perfectly capable of weighing.

And your first failure is thinking that the value of Tesla is limited to just the Model 3, when Tesla has 2 other successful model lines, 4 future models in the works, and an entire diversified portfolio of energy/solar products that continues to grow.

Seems like the only one having a problem reading the weights is you.

Another Euro point of view

In a late bull cycle with investors drunk with easy money the only smart money left is the bonds market really. Moreover, large institutional investors are aligning their politics on what they think their clients/investors wants and what is available on the markets, no matter their own opinions. I haven’t checked how Tesla bonds fared lately but that’s what I would watch if I was interested in Tesla as an investment. I agree with some that should Tesla go up again to $380 again it could arguably be a very good entry point for a short for someone with lots of money and a gambler mindset (which I don’t have, I do not invest in stock markets, I just have fun reading news about it).

Nix

Inflation and interest rates are going up in the US. Inflation was at 0.8% when Tesla wrote their first bond, now 2.8% The 5 year Treasury Note was at 1.34% back then, now at 2.85%

All new bonds have to have higher rates to keep up with higher inflation and competition with higher T-bills. The current admin has massively increased deficits with an unfunded tax cut and increased spending which will increase T-bill rates. ALL older bonds issued at lower yield rates have gone down in resale value, because you can buy new bonds with higher yields. The seller has to discount to reflect the difference. Bonds lose value in the face of rising interest rates and rising inflation (except for TIPS).

Are you going to try and flim-flam us with BS about Tesla having to pay more for bonds, or that the resale market for TSLA bonds has dropped in value (just like every other bond)? As if that somehow showed Tesla was in trouble? Even though every single company who issued bonds in the same timeframe will see the exact same market forces?

Ron M

I certainly hope the shorter are Trump supporters.
They think Trump is doing such a great job but May 2018 budget deficit was $147 billion and the tax cuts to corporations went to share buy backs CEO and executives compensation. 10% tax on money held overseas. Middle income earners and there kids and grandkids get debt and eventually cuts in programs like Social Security and Medicare.

Mil

Chanos and the other short sellers can suck it. I hope they crash and burn hard!

Tim

Anyone who bets against Elon Musk will lose! Tsla has a wild card to play. That wild card is space X.

Viriato

As almost everything in the world, the truth is often between black and white. I don’t understand why some people criticizes every thing that Tesla or Elon Musk do, but I can’t understand either, those fanatics that can’t see the reality when is not good for Tesla.
Tesla and Elon have their place in the history, for to push the electric cars and to put the susteinable movility on the street. That’s a very valuable contribution even if Tesla could dissapear tomorrow. But this must not to close our eyes when we see the production problems, reliability issues, and finantial difficults that Tesla suffer.