In early 2019 Tesla had a close scrape with death, and yet you never saw a single word about it in all of the tech blogs that cover Tesla. We now know this to be true from an unlikely source. Musk himself. In the past week he’s dropped an interesting tidbit about him wanting to offer the company to Apple at a tenth of the current value.
I’m guessing the time period he’s talking about is March of 2019. It’s not that hard of a guess. Tesla had a severe cash crunch that forced the closure of all of their retail store fronts. On March 1st they paid off convertible senior notes to the sum of $920 million. The next day they announced the closure of their retail chain. It was only after Tesla secured an emergency ABL agreement credit line of $500 million did they finally announce that they would leave some stores open.
But the weird thing about the whole fiasco was the press coverage from all the tech blogs. They all ignored the distress and covered the store closures as if it was some stroke of retail genius that no one but Musk could comprehend. No, as only I and a few others pointed out, Tesla was headed for bankruptcy. Here is what I wrote in February and March of 2019.
We Can See It Now, Tesla Is Dying
Tesla Appears Dangerously Close to Bankruptcy
I was right.
But not only was the tech press ignoring Tesla’s distress, some were actively covering it up. There were articles about how Tesla had reported nearly $4 billion in the bank in their previous earnings release. So this obviously couldn’t be a cash crunch and must be FUD by short sellers. Surprise! Tesla withheld cash payments at quarter end to give the illusion of having much more cash than they really have. Just as I had predicted. It turns out the Tesla critics were right.
I can’t believe that Musk made this admission. There is nothing positive here for Tesla. For a founder like Musk who likes total control, the thought of inviting in corporate overlords to watch over him would be like hell itself. This shows how dire the situation must’ve been for Tesla to even consider such a draconian rescue.
Plus, Musk proved the bears were right about how close Tesla was to bankruptcy. Musk tries so hard to discredit and ridicule the short sellers and then in one fell swoop, he undoes all of his work. He gives in to his base nature and hatred of Tim Cook even if it means building up the credibility of all his critics. The critics who rightly pointed out Tesla’s dire situation in 2018/19. The same critics who say 2020 was all a mirage and that the house of cards is heading for a sledgehammer in 2021.
It also shows the Tesla board of directors that Musk is still a loose cannon CEO who can’t control his mouth. This was a damaging piece of information to Tesla that should’ve never been let out. But Musk did it on impulse to get whatever weak dig at Apple that he could.
The moral of this story is that you’re not going to get the truth about Tesla from the tech blogs. For whatever reason, they are actively trying to prop this company in the face of a myriad serious issues. Tesla’s horrible quality and customer service is below par. Their cars are alleged to have serious issues with the suspension that have caused many accidents. Their financial health without the regulatory credits is highly suspect. Their self-driving software is being rushed to the market despite many signs it isn’t ready.
But the weird thing about the whole fiasco was the press coverage from all the tech blogs. They all ignored the distress and covered the store closures as if it was some stroke of retail genius that no one but Musk could comprehend. No, as only I and a few others pointed out, Tesla was headed for bankruptcy. Here is what I wrote in February and March of 2019.
We Can See It Now, Tesla Is Dying
Tesla Appears Dangerously Close to Bankruptcy
I was right.
But not only was the tech press ignoring Tesla’s distress, some were actively covering it up. There were articles about how Tesla had reported nearly $4 billion in the bank in their previous earnings release. So this obviously couldn’t be a cash crunch and must be FUD by short sellers. Surprise! Tesla withheld cash payments at quarter end to give the illusion of having much more cash than they really have. Just as I had predicted. It turns out the Tesla critics were right.
I can’t believe that Musk made this admission. There is nothing positive here for Tesla. For a founder like Musk who likes total control, the thought of inviting in corporate overlords to watch over him would be like hell itself. This shows how dire the situation must’ve been for Tesla to even consider such a draconian rescue.
Plus, Musk proved the bears were right about how close Tesla was to bankruptcy. Musk tries so hard to discredit and ridicule the short sellers and then in one fell swoop, he undoes all of his work. He gives in to his base nature and hatred of Tim Cook even if it means building up the credibility of all his critics. The critics who rightly pointed out Tesla’s dire situation in 2018/19. The same critics who say 2020 was all a mirage and that the house of cards is heading for a sledgehammer in 2021.
It also shows the Tesla board of directors that Musk is still a loose cannon CEO who can’t control his mouth. This was a damaging piece of information to Tesla that should’ve never been let out. But Musk did it on impulse to get whatever weak dig at Apple that he could.
The moral of this story is that you’re not going to get the truth about Tesla from the tech blogs. For whatever reason, they are actively trying to prop this company in the face of a myriad serious issues. Tesla’s horrible quality and customer service is below par. Their cars are alleged to have serious issues with the suspension that have caused many accidents. Their financial health without the regulatory credits is highly suspect. Their self-driving software is being rushed to the market despite many signs it isn’t ready.
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