The Tesla Misdirection Scam
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2018-02-08 10:01 by Karl Denninger
in Company Specific , 272 references Ignore this thread
The Tesla Misdirection Scam
[Comments enabled]

Fox Snooz has picked it up.

Is launching a car into an elliptical orbit that will go into the asteroid belt an "achievement" or a publicity stunt that was explicitly timed to correlate with an earnings release that is marking yet another milepost in a firm's demise?

I'll take the latter.

Don't get me wrong on Space-X being cool.  It is.  But it's not the business that Tesla is actually in, which is at its fundamental level a tax farm, that is, a company that exists only due to government subsidies worldwide, along with all the "free money" it has been able to access via the market.

That's an unsustainable business model and with every passing quarter it becomes more-clear that if that ever goes away on either side the firm is a zero.

Well, it's going away.  Higher rates will end the "free money machine" from Wall Street.  I suspect the free money machine from tax farming will disappear too, but even if it doesn't the cash burn problem will eventually sink the company.

Yeah, I know, Musk "expects" to show a profit.  Well, sort of a profit, since of course all the games will go into that GAAP figure.  The issue is that the games won't continue on a permanent basis, and without them the company has no prayer in Hell of survival.

My money is on a big fat detonation in this firm and a literal zero for its stock price sometime in the next couple of years.  I'm not the only one who thinks so either as the implied volatility in the Jan 2020 PUTs is literally beyond the orbit of Mars (in the 80% range!) which makes them prohibitively expensive.

The smart folks know Musk is a "magician" -- that is, he does stage magic but unlike the guys who do it for $30 ticket sales this jackass does it to attract billions from rubes who are ultimately going to lose it all.

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User Info The Tesla Misdirection Scam in forum [Market-Ticker]
Feedsthebears
Posts: 11
Incept: 2010-06-10

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Musk is a showman, that's for sure. He has big ideas and balls so big I'm surprised he can walk around.

Launching a Tesla into space, blasting Bowie and with a towel and a copy of Hitchhikers Guide in the glove compartment? Brilliant.

Brilliant and hilarious.

I'll bet there is a whole cadre of schoolkids now looking up and thinking...
"Someday I want to go into space and bring that Tesla back. How cool would THAT be?"

Tesla has a short period of time to get mass production figured out. It's not rocket science. But whether Tesla lives or dies, Musk should be an inspiration to us all.

Flaps10
Posts: 6820
Incept: 2008-10-17

PNW
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Not to mention that Tesla is having difficulties at the bread and butter level. They're finding out there is a big difference between producing a car and producing a continuous **** stream of good cars on a daily basis.

I do think sticking two boosters back on the pad is impressive as hell. It's amazing to think what you can do with an unlimited supply of OPM.
Acebarefoot
Posts: 138
Incept: 2009-05-20

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Misdirection is the key word here.

Imo, he is doing "sleight of hand" to buy more time for his hemorrhaging endeavors.

Vernonb
Posts: 1973
Incept: 2009-06-03

East of Sheol
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One interesting observation I made during the Christmas holiday were the placement of the Tesla chargers in parking spaces at the Magnolia mall in Florence, SC.

This mall already has parking problems during the season yet these bastards allowed Tesla to come in and gut mall parking to install these abominations. I saw nothing but but rows and rows of parking tickets for people driving non-electric cars parked in these spaces.

Now it is bad enough that handicap parking is abused but these Tesla charging stations are essentially nothing more than privileged parking positions for a few wealthy individuals. The people illegally using handicapped parking are likely the same type of *******s driving the TESLA cars. The government and mall owners in this area as chosen to spit on the average citizen in my opinion by allowing this abomination.

Why should they have the privilege of premium parking just becuase they drive an all electric car? I hope Tesla literally goes up in flames. Go fuel up away from the mall like everyone else.


Quote:
I'll bet there is a whole cadre of schoolkids now looking up and thinking...
"Someday I want to go into space and bring that Tesla back. How cool would THAT be?"


I hope one of those kids is smart enough to nudge it into Jupiter's gravitational pull.



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"Mass intelligence does not mean intelligent masses."
Quik49
Posts: 4340
Incept: 2007-12-11

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Just peeked at an older chart of mine...it's sitting near a daily lower trendline..bought a putty before earnings just to say FU to that *******....

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Long Vaseline....

Rollformer
Posts: 221
Incept: 2013-02-13

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Zero Hedge reported that their cash burn was far less than expected. They didnt go into detail, and a quick look on EDGAR didnt show me a -k or -q recently filed.

This is interesting, because the starting net loss was substantial and more or less in line. This would indicate that the cash burn was arrested by working capital, so either receivables or inventory dropped, or payables (in Teslas case deposits would do this as well) increased.

If the cash burn slowed because they are stretching payables, things could get interesting quite quickly.
Vernonb
Posts: 1973
Incept: 2009-06-03

East of Sheol
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Feedthebears said:

Quote:

Musk is a showman, that's for sure. He has big ideas and balls so big I'm surprised he can walk around.


Musk is freaking fraud. The idea is a scene stolen from the opening of the Heavy Metal movie from the 80's.


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"Mass intelligence does not mean intelligent masses."
Rollformer
Posts: 221
Incept: 2013-02-13

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So, I looked at the earnings release, and while I am working from a phone and limited in my analytical capabilities, I did notice that their resale value guarantees liability increased by $600 million. An increase ina liability is a source of cash, so take that as you will.

And their payables were up commensurately. Im not doing an excel model on my phone to determine whether its reasonable, but it did happen.
Flyingillini
Posts: 111
Incept: 2009-06-09

Reno, NV
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I work at SpaceX. It was an exciting launch, the whole place was going nuts. Regardless of the Tesla controversies, I thought it was a cool gimmick. How many times in our lifetime will we see something as cool as a convertible car floating through space with a dummy driver sporting a space suit, all on caught on video with the earth in the background after a kick ass test flight of Falcon Heavy.
Jack_crabb
Posts: 5297
Incept: 2010-06-25

Peoples' Republik of Maryland
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Quote:
Musk should be an inspiration to us all


Maybe, if he weren't king of the government subsidy. **** Elon Musk.

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Molon Labe
Where is Henry Bowman when you need him?
How many are willing to pledge this? We mutually pledge to each other our Lives, our Fortunes, and our Sacred Honor
Tickerguy
Posts: 151650
Incept: 2007-06-26
A True American Patriot!
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He should have sat in the Roadster.

**** him with a chainsaw.

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Winding it down.

Nadavegan
Posts: 88
Incept: 2017-05-03

The South
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@flyingillini, it would be much cooler if he used his own ******ned money.
Asimov
Posts: 109695
Incept: 2007-08-26

East Tennessee Eastern Time
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I really don't give a **** who's money he's using. It's not a government doing it and that's a *HUGE* step in the right direction.

How long till asteroid mining is a thing? That will change everything.

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It's justifiably immoral to deal morally with an immoral entity.

Festina lente.
Tickerguy
Posts: 151650
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No it won't.

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Winding it down.
Asimov
Posts: 109695
Incept: 2007-08-26

East Tennessee Eastern Time
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The hardest thing about humans existing/working/living off of earth is that we have to send all the resources with them. When we can harvest those resources there, we'll be a lot better off.

It may not change everything, but it will certainly change the viability of humans living elsewhere. That's a good thing, IMO, and eventually will change a whole lot of things.

----------
It's justifiably immoral to deal morally with an immoral entity.

Festina lente.
Tickerguy
Posts: 151650
Incept: 2007-06-26
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Meh. The ^V required to actually get to and from an asteroid presents an issue that is the same sort of problem as lifting things out of Earth's gravity well.

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Winding it down.
Asimov
Posts: 109695
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True, but at least things coming from there don't need to be speedy. Good use for things like ion engines, solar sails or even mass drivers using waste rock from processing.

Not counting what can be used/done in situ, which is what I'd be focused on quite a bit more than sending it back. At least if it was my project, I'd only send back what's needed to for resupply of necessities that can't or can't yet be produced there.

Obviously that's not going to happen immediately, and there's not going to be any huge immediate effect either... But we *NEED* space.

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It's justifiably immoral to deal morally with an immoral entity.

Festina lente.
Snowmizuh
Posts: 1742
Incept: 2009-03-18

Alabama
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@Flyingillini I thought the whole launch and operation was cool as hell. I love the showmanship. It was cheeky. Y'all should be proud!
Nadavegan
Posts: 88
Incept: 2017-05-03

The South
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Not a government doing it? Whose money do we suppose he is using? How is this any different than any other Skunk Works-type operation? Government money/contract engineering?

I mean, yeah, cool rocket bro, but what is the point, other than selling more snake oil? Vast swaths of Earth remain uninhabited and undeveloped. And that is just the land - not to mention the sea floor. It will be centuries, if ever, before we would ever need to look elsewhere for anything.
Asimov
Posts: 109695
Incept: 2007-08-26

East Tennessee Eastern Time
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Nadavegan: That's one opinion, I suppose.

I wonder where the resources will come from for "centuries" to come though. Especially considering our population growth.

----------
It's justifiably immoral to deal morally with an immoral entity.

Festina lente.
Quik49
Posts: 4340
Incept: 2007-12-11

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interesting discussion....back in high school, the local planaterium had a greatplanetarium show that was about the use of energy. I started from day one and then went through time of man from fire to nukes and things we really couldn't do at the time....taking it in time to the point where basically we used it all up....we went planet to planet, solar system to solar system, galaxy to galaxy etc etc....and the end of it the place went dark...nothingness....the a big flash of light and a voice "let there be light"...that was narly 40 years ago and still impresses me...cannot find the damn thing online.

on another note...one putty was a double...got out too early....thanks for the fishes elon, I will be back

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Long Vaseline....

Keenan
Posts: 271
Incept: 2013-01-11

Western PA
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RE - Musk's stated goal for humans to colonize / develop Mars:

UCSD professor Tom Murphy wrote a good essay on the scope of the problem in 2011:
https://dothemath.ucsd.edu/2011/10/why-n....

His article includes an embedded link to his essay on galactic scale energy which hits all the bells on the absurdities of exponential growth.

The one way in which Musk's dream might be achieved is via artificial general intelligence agents, though fundamental mathematical principles
( i.e - Godel's "Incompleteness Theorem" ) which, Sir Roger Penrose suggests, may preclude even the possibility of such computationally-based entities.

Mangymutt
Posts: 505
Incept: 2015-05-03

Vancouver WA
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"Meh. The ^V required to actually get to and from an asteroid presents an issue that is the same sort of problem as lifting things out of Earth's gravity well."

This becomes a non-problem after Elon unveils his battery powered rocket ship.
Flyingillini
Posts: 111
Incept: 2009-06-09

Reno, NV
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SpaceX funded Falcon Heavy development.
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