Why All The Tesla Hate?
Hopey-changey Tesla fans committing crimes against capitalism and activism
One of the big media trends as of late are breathless financial missives detailing how Elon Musk is pouring glasses of tasty Kool-Aid for gullible investors. His imbibers are inflating Tesla stock up up up past $300-a-share with a P/E Ratio that makes the CEO of GM cry in her soup. For example, here’s hedge fund rockstar David Einhorn opining that no matter how much money he’s lost from his short on Tesla thus far, common sense will prevail and the bubble will pop.
Across all manner of media, there are many versions of this screed: “silly investors, market fundamentals will eventually lay bare huxster Elon Musk’s science fiction promises and bring Tesla’s stock price back down to earth. Harrrumph!”
The more Tesla stock goes up, the more huffy puffy the articles get. There are so many reasons why Tesla is gonna tank… VW is gonna come out with a Tesla killer! There’s not enough lithium in the world to make all the batteries! Range anxiety! Not enough Super Chargers! Electric cars aren’t actually green! Amber Heard (how does he have time to date?!?!!?)! Tesla’s gonna run out of capital before they ramp up production! The Solar City acquisition is a bust! And my favorite — Elon took a selfie!
Every pundit wants the bonafides to say, “I called it! Shoulda listened to me. I was not seduced. Thine Kool-Aid drinketh not I.”
No Shit Sherlock
It shouldn’t take a prescient investing genius guru to know that one guy probably won’t single-handedly upend the carbon economy and create scalable & sustainable transportation and energy for the world.
For one thing, Rex Tillerson is a phone call away from his State Department black ops thugs eliminating Musk. That in itself makes the whole proposition dicey. Tesla’s success directly threatens the entrenched interests of the fossil fuel industry, the auto industry, oil-drenched governments like Russia and the USA, and now Johnny Depp. For crippesakes, way to stack the deck against yourself! Have you seen Pirates of the Caribbean? That Jack Sparrow is a wiley one. I wouldn’t go messing with him.
Take it from SuperInvestor(TM), Jason Ditzian — there’s a low probability that one South African dude will take down all the biggest, most devious companies in the world in one fell swoop. Generally speaking, that usually doesn’t happen.
I thought people liked factories?
With all this chatter and short-term profiteering, there’s very little discussion about what happens if Tesla pulls off its vision.
Forget the tunnel drilling machines, Hyperloop, the computer-brain interface, electric big rigs, colonizing mars, et al. As interesting and distracting as these ideas are, the fact is, Tesla is building factories right now to make cars and batteries and solar shingles. This is actually happening in America right now.
If his vision is successful and Tesla is able to scale out production, in a few years we’ll have flipped the script on the carbon economy and there will be no turning back. America’s manufacturing sector will become the energy company to the world.
It doesn’t matter where you fall on the political spectrum, everyone would prefer to drive for free than pay for gas. In the battle between the pump and the plug, free energy will prevail. But the vast entrenched interests of our carbonocracy promises to make that inevitable transition to free energy as painful and drawn out as possible.
If Tesla doesn’t pull it off now, don’t expect another company to try for a total sea change for the next few decades. Musk snuck in under the radar. He was a crackpot building $200,000 sports cars while oil execs were too blinded by record profits to do the math and realize how tenuous their business model was 15 years out. They won’t let their guards down again. It’s now or never. Without competition, the big auto companies will stay the course, trickling out underwhelming hybrids and EVs while continuing to reap huge profit margins on SUVs and other guzzlers right up until the oil runs out or the world catches on fire.
Shorters be Shorting
David Einhorn and the other nebbishy shorters, their only interest is near-term profit. Einhorn wants to win his bet. Maybe it’s a good bet. But make no mistake — it’s a bet against our collective future. It’s a bet against America as leader in the new renewable energy economy and a bet against the environmental viability of planet earth.
As of April 13, there were a total of 31.58 million shares of shorted interest in Tesla. That’s roughly a $10 Billion bet against Tesla. Which is about 20% of Tesla’s $50 Billion dollar market cap. Also, consider that the short bets themselves drag down the value of Tesla. So in a sense, that $10 billion is an even bigger chunk than 20%.
Every billion invested against Telsa is a billion that could have been invested in Tesla. If these shorts flipped, then Tesla would be worth upwards of $60-$70 Billion. I know that’s not going to happen. But if it did happen, that would be enough capital to quell any doubt about Tesla’s ability to scale up their production by the end of 2017 to get those cars rolling, batteries charging, and roofs shingled. But the bets are already made, so the shorters have to dig in and try their darndest to undermine confidence in Tesla.
Thankfully, Einhorn doesn’t have the pull anymore like he used to to go public against a company and watch the stock price fall on his word. After his speech, the stock price barely moved. I think the people who get it, get it, and aren’t being swayed in the short term. This is about our carbonless future and some folks are willing to wait it out over the next few years to see Musk’s vision become a reality. And to lose money if need be.
Crimes against Capitalism and Activism
I think there’s something else happening here as well. There’s a dynamic of economic tribalism at work that’s making players on both side of the spectrum not see the wood from the trees.
To died-in-the-wool investors, it is a crime against capitalism to consider the idealistic aspects of a company over its immediate market fundamentals. The Einhorns of this world feel a moral responsibility to prove that such a company — even if they are offering a viable solution to the existential crises of humanity — in principle, should be put in its place.
To died-in-the-wool activists, it feels like a crime against environmentalism and perhaps socialism to root for a market-based solution to climate change and global fossil fuel hegemony. As if the only way to effect change is to raise awareness and get governments to regulate.
Depending on which side you’re on, a Tesla investor is either a rube or a defector. But some of us don’t care about labels and are just hoping Bangladesh doesn’t go underwater in our lifetime.
Is anyone else in the world — the scientists, the socialists, the politicians, the popes — offering anything even close to a game plan? Scaling out Tesla is the only working solution on the table. Carbon Credits? Paris Climate Accord? Lowering consumption?
Case in point — the web magazine I write and edit for, Bold Italic, decided not to run this article and instead went with a party-line Tesla-hating socialist article. Besides a love letter to jackfruit, I’ve never had anything I write rejected from TBI. Somehow it doesn’t fit with the editorial vision to say what I’m saying. Crime against the party line. I’m posting this here on medium where no one will read it just for my own personal edification, to go on record about all this.
I’m sick of all these clever signs
You see anyone taking down big carbon in the timeframe necessary to stop imminent climate catastrophes? I do not. Lots of talking and arguing and denying. We’re preaching-to-the-choir ourselves to death. Meanwhile, we don’t even have a government that acknowledges CO2 is a pollutant. Environmentalists have lost the PR war. I don’t understand why Bill McKibben isn’t out there telling people to get behind Tesla. Instead he’s tweeting images of kids holding clever signs at protests.
Frame it anyway you want, if the end goal is curtailing the worst consequences of climate change, so far efforts have been a failure.
So, listen to SuperInvestor(TM), Jason Ditzian: if you buy Tesla stock, it is a big risk! You’ll probably lose your money! But you are supporting the only real on-the-table-now solution to climate change.
What difference is it investing in Tesla vs. donating to 360.org? The fact that you might make profit doesn’t make it an any less-effective attempt at solving climate change. 360.org is 100% chance of zero return and a 0% chance of saving the day.
The main obstacle to this vision is Tesla having enough capital to pull off its audacious, hopey-changey vision. So maybe the stock keeps going up because people think it’s worth taking the risk. Does that make this hopey-changey Capitalism? Remember that good-old hopey-changey feeling? Seems so long ago, but it doesn’t have to be gone forever. There are still a few glimmers out there in this time of darkness.
If he gets enough support, he could pull it off. In a handful of years Einhorn could be shorting PG&E. Common sense folks will plug their electric vehicle into their Powerwall, charged by their solar roof, and wonder, “why would anyone pay for gasoline?”