Musk Gives Wall Street Nothing To Hope For, But Hope Itself
The Apple corporation at various times is one of the most shorted stocks on Wall Street. But you never hear Tim Cook raging against them. That’s because Apple is a self-sustaining entity. They don’t need constant cash infusions from investors. Which is why Tim Cook really couldn’t care any less about what AAPL short sellers say or think of Apple.
But Tesla on the other hand. Is like a ward of Wall Street. They’ve been around for over ten years and they still need regular capital investment just to keep the lights on. I’ve been working in corporate accounting for over twenty years and I’m not fooled by the accounting tricks that they use to post an occasional quarter of tiny profit or goose their cash balance.
Tesla lives or dies by their stock price and what people think of their grand vision of the future. Tesla’s stock price is based on the stories that Musk tells and not their dreadful income statement and balance sheet. So any fact-checking of Musk’s stories pose a grave danger to the entire operation collapsing.
And that’s what Musk really hates. Anyone who threatens to poke holes in the stories that he tells of the future. And it’s not that hard to poke holes. The numbers behind his car business don’t make sense. Tesla is at least a decade away from level 5 self driving. The promises of self-driving robo-taxis are absurd. The small glass solar roof tiles that look like shingles don’t exist. The semi-truck is never coming. And on and on it goes. One outlandish claim after another. But his stock price and capital raises are built on this shifting sand.
Tesla lives or dies by their stock price and what people think of their grand vision of the future. Tesla’s stock price is based on the stories that Musk tells and not their dreadful income statement and balance sheet. So any fact-checking of Musk’s stories pose a grave danger to the entire operation collapsing.
And that’s what Musk really hates. Anyone who threatens to poke holes in the stories that he tells of the future. And it’s not that hard to poke holes. The numbers behind his car business don’t make sense. Tesla is at least a decade away from level 5 self driving. The promises of self-driving robo-taxis are absurd. The small glass solar roof tiles that look like shingles don’t exist. The semi-truck is never coming. And on and on it goes. One outlandish claim after another. But his stock price and capital raises are built on this shifting sand.
The biggest sin committed by the short sellers is that they dig beneath the surface and publicize the faulty logic behind Musk’s grand vision. In a twist of Roosevelt’s old saying, Musk gives Wall Street nothing to hope for, but hope itself.
But the problem for Tesla is that this “fact checking” has gone way beyond short sellers. Musk, via his lack of self-control, has managed to provoke quite an array of interested parties. Experts from all walks of life are now actively monitoring Musk to point out his inconsistencies or outright lies. Even if the short sellers moved on to another target, this new band of Tesla watchers isn’t going away.
In fact, the Tesla stock price breakout of this week had more to do with the pessimism of all the Tesla supporters and not the short sellers. Meaning that it has been the pessimism of Tesla supporters that has kept the stock price down in 2019. They were unwilling to put their money where their mouth is until this week.
Tesla will publish their 10-Q in a matter of days. And when it does this new group of Tesla fact-checkers will be all over it to shed some light on what drove this tiny profit. This is really what is driving Musk’s animosity towards the short sellers. Musk would rather that no one take a closer look at what he says or what Tesla reports. It threatens the narrative that Tesla so carefully plants in the press.
The short-sellers have been keeping their powder dry until they can sift through the 10-Q. But if I was long on Tesla, I’d seriously be thinking of getting out in this short period between the earnings release and 10-Q. There’s a high likelihood that this is as good as it gets for Tesla’s stock price for a very long time, perhaps ever.
Short sellers are convinced that Tesla is on the road to nowhere. Nothing has changed this week. Tesla longs on the other hand, haven’t been quite so positive that Tesla was on the right path. Hence, the year-to-date sagging in the stock price. Tesla longs have been looking for any sign that it was okay to believe in Musk’s grand vision. Because until this week, 2019 has been one bad news story after another.
But the problem for Tesla is that this “fact checking” has gone way beyond short sellers. Musk, via his lack of self-control, has managed to provoke quite an array of interested parties. Experts from all walks of life are now actively monitoring Musk to point out his inconsistencies or outright lies. Even if the short sellers moved on to another target, this new band of Tesla watchers isn’t going away.
In fact, the Tesla stock price breakout of this week had more to do with the pessimism of all the Tesla supporters and not the short sellers. Meaning that it has been the pessimism of Tesla supporters that has kept the stock price down in 2019. They were unwilling to put their money where their mouth is until this week.
Tesla will publish their 10-Q in a matter of days. And when it does this new group of Tesla fact-checkers will be all over it to shed some light on what drove this tiny profit. This is really what is driving Musk’s animosity towards the short sellers. Musk would rather that no one take a closer look at what he says or what Tesla reports. It threatens the narrative that Tesla so carefully plants in the press.
The short-sellers have been keeping their powder dry until they can sift through the 10-Q. But if I was long on Tesla, I’d seriously be thinking of getting out in this short period between the earnings release and 10-Q. There’s a high likelihood that this is as good as it gets for Tesla’s stock price for a very long time, perhaps ever.
Short sellers are convinced that Tesla is on the road to nowhere. Nothing has changed this week. Tesla longs on the other hand, haven’t been quite so positive that Tesla was on the right path. Hence, the year-to-date sagging in the stock price. Tesla longs have been looking for any sign that it was okay to believe in Musk’s grand vision. Because until this week, 2019 has been one bad news story after another.
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