“The wheels of justice turn slowly, but grind exceedingly fine”
Tesla and Musk absolutely did mislead both - investors and consumers, and they are still doing it.
Countless products that were announced but never delivered, self-driving promises of a car that was supposed to drive itself across the US 7 years ago, 1 million Robotaxis 4 years ago, Dojo etc etc. One may ask - yeah but who would believe that, it's just setting aggressive deadlines ? Well, analysts based their projections on that (remember the 500B$ valuation worth of Dojo business alone ? ), investors did invest based on that.
Same goes for consumers - wildly misleading marketing and communication from Musk about it's products and capabilities. It's very telling that Tesla used to win all the cases about crashes while on Autopilot. This year however, somebody got smarter and sued them for misleading marketing about Autopilot capabilities, instead of direct responsibility for the crash. Tesla settled the case, for the first time (https://apnews.com/article/tesla-autopilot-lawsuit-settlemen...). First of many many times that will follow.
Misleading investors is one thing, misleading consumers is another. Rightly or wrongly, many people believed Musk when he said the cars could drive themselves. Musk is a cult of personality and as a result Tesla definitely has customers believing everything Musk says about his cars. To me, that's the bigger problem than lying to investors: investors are supposed to know better.
Part of the reason that public companies are regulated far more harshly than private is that not all investors do; a lot of investors are basically just consumers.
Very large investors are supposed to know better but it’s not the 80s and most investors (by number, not wealth) are those same consumers, especially for a stock which has been heavily boosted by Musk’s public persona. When they make lies in official statements like “The person in the driver’s seat is only there for legal reasons. He is not doing anything. The car is driving itself.” or claiming that the car drives better than a human, as Musk did on an earnings call in 2016, the government should be thinking of the retiree who bought a few shares rather than the professional trader who pays consulting engineers to fact-check that marketing.
Any retiree that bought shares in 2016 is living on a yacht with 1000+% gains. The company is literally one of the greatest engines of retail investor wealth creation in history.
So were Enron and Pets.com, until they weren’t. Healthy markets depend on accurate information so regulators care about whether you were knowingly misrepresenting the health of the company, not just whether there was a period afterwards where you could sell at a net profit. Their job is to avoid what happens when a popular stock craters, not worry about the good times.
Enron and Pets.com? 1) Enron misstated earnings 2) Pets.com did not commit wire fraud.
Tesla is one of the most financially healthy companies on Earth. Literally one of the(if not the) fastest growing manufacturing company years by revenue.
> Enron and Pets.com? 1) Enron misstated earnings 2) Pets.com did not commit wire fraud.
… but both illustrate in different ways that “number go up” is not sufficient to know about the health of a company. Both had cheerleaders saying exactly what you’re saying now the whole time.
In Tesla’s case, that’s important because their P/E has been wildly out of the norm for their industry but they don’t have much in the way of a competitive edge and the higher end market they’re relying on is getting tight. Similarly, they’re making a huge profit on their carbon credits but there is no reason to expect that to scale up or even last long term.
The whole play is predicated on turning into a tech company, and that’s why this matters: if they’re saying that high share price is justified because they’re going to sell self-driving cars it’s especially important that company officers are not misleading the public. That share price would collapse if it turned out that they knew they were behind and were dishonestly hyping the stock.
As a PhD Materials Scientist with a business degree, I don't think you understand the Tesla business case. I invite you to read Tesla's SEC filings carefully. I found the business case to be extremely compelling when I bought 3400 shares at 16$.
I still find deep value in the stock despite relentless negative sentiment from people who have no idea what an absolute juggernaut the company is. Comparing Tesla to Enron or pets.com is absurd. Tesla is on another planet in comparison.
The idea that Tesla investors have been duped is also absurd. I follow the company's developments closely and have driven FSD for years. They have an unassailable advantage in the coming networked renewable energy market and are on track to implement high margin recurring revenue digital services across their class leading hardware products, which include EVs, home storage, and grid scale storage. The latter two have just moved out of the Tesla Roadster era of development and are achieving scale just as solar and wind deployment reaches wide scale adoption.
Good luck to all who see promise in a renewable future. Sorry to those who don't get it.
I’m not saying they’ll go to zero but your rhetoric about things like “unassailable advantages” is a good illustration of the risk here. The renewable juggernaut is rolling but it’s not preordained that they will be the company leading it – they have plenty of competition – and their financials are good but don’t support the kind of stock price they’ve had over the last few years. More competition will tighten margins up, not expand them.
Calling Tesla Enron and pets.com is totally legit, but unassailable is rhetoric?
What competition are you talking about? What is their gross margin? SG&A expense as a % of revenue? If Tesla is so assailable there should be easily named competition with comparable financial performance and a compelling technology roadmap . There isn't one. I look every day.
Tesla and Musk absolutely did mislead both - investors and consumers, and they are still doing it.
Countless products that were announced but never delivered, self-driving promises of a car that was supposed to drive itself across the US 7 years ago, 1 million Robotaxis 4 years ago, Dojo etc etc. One may ask - yeah but who would believe that, it's just setting aggressive deadlines ? Well, analysts based their projections on that (remember the 500B$ valuation worth of Dojo business alone ? ), investors did invest based on that.
Same goes for consumers - wildly misleading marketing and communication from Musk about it's products and capabilities. It's very telling that Tesla used to win all the cases about crashes while on Autopilot. This year however, somebody got smarter and sued them for misleading marketing about Autopilot capabilities, instead of direct responsibility for the crash. Tesla settled the case, for the first time (https://apnews.com/article/tesla-autopilot-lawsuit-settlemen...). First of many many times that will follow.