You are a reporter interviewing Milton, owner of up and coming automotive manufacturer Nikola, currently being investigated for securities fraud.
"So what exactly is the problem?" you ask.
Milton looks at you as if he doesn't quite understand your question, but then smiles.
"The entire infotainment system is a HTML 5 super computer," Milton said. "That's the standard technology now."
"What does that mean?" You ask.
"It means it can do everything a human brain could ever want to do, and more!" Milton says excitedly. "You want to watch Netflix? You got it. You want to browse the internet for weird fetishes that will make you feel dirty? You got it. You want to play some games? You got it."
You don't really see the point in having such a system, but you stop yourself from saying anything.
"Why would anyone want all those things in their car?" You ask.
"Don't you think it would be handy to watch movies while driving?" Milton asks.
Intel Paragon XP/S 140 (#1 on the top500 list in June 1994): 143.4 GFLOPS 
Don't know whether to marvel at how fast a modern smartphone is, or how "slow" old supercomputers were.
(Yes, I realize GFLOPS is probably not the best comparison and I have no idea where gadgetversus.com even gets its numbers from, but I think they're at least in the ballpark).
It was a highly proprietary process, but I later found out that everybody was doing it this way.
If only it were just that. He appears to be a con-artist. It's always interesting how things can sound similar and have entirely different intent and reasoning behind them.
This guy knew he was spouting lies while talking about the HTML supercomputer (assuming it's a correct quote from the trucking site in question). He has now been caught doing it repeatedly and to a rather dramatic scale. His interviews are full of half truths and dodges. It appears to be the Theranos playbook: try to get to a certain line where some product finally becomes real, before the clock runs out on the con.
Intentions matter a lot. There's obviously a vast difference between someone quite innocently discussing / opining outside of their knowledge lanes on a hacker news forum, and someone intentionally spinning an epic scale multi-billion-dollar fraud in the name of the profit motive.
The point being, if someone is talking outside of their lane on HN, I have essentially zero inclination to think they're knowingly attempting to commit fraud (intellectual or financial) in the process, as on HN it's almost exclusively a common, innocent form of ignorance at play. As contrasted with the intentional deception of a con-artist.
Having talked to reporters before, there is a possibility that something more reasonable was said but then got garbled. Like, if during the interview someone said the UI is using HTML5, which is standard everywhere, so it will be easy for people to extend / we have lots of options; and also we're using ARM so we can build our own chips; ARM is in everything from smartphones to supercomputers. I can totally see a non-tech reporter getting confused and morphing that into the sentence above.
Obviously the other outlandish / false claims make it more likely that this is an example of BS as well.
A cursory search on google shows that all the references link back to truckinginfo.com, so I wouldn't put too much weight on that.
If the situation with Nikola is really as bad it looks right now, he's going to be spending the next few years trying to stay out of prison as the Feds turn his company inside out, investors start filing lawsuits (claiming they had no idea what was really going on), and someone starts writing a best-selling book about all the fraud that went on. I don't think you want his future. That paper net worth could quite easily be negative a year or two from now, with various assets seized, civil lawsuits, and so on.
> That's the standard language for computer programmers around the world, so using it let's us build our own chips.
I guess he means that they built their own infotainment on HTML5 instead of some proprietary commercial car infotainment technology which would also come with its own chipset. So now they can use their own chipset as long as it can run HTML5.
> Every component is linked on the data network, all speaking the same language. It's not a bunch of separate systems that somehow still manage to communicate.
I guess it means they built a standard data bus for the car and every component can subscribe/publish to it.
This story just keeps on giving.
Take a look at Twitter, and it's pretty sad IMO to see some of the "I still believe in you Trevor!!" type responses, completely devoid of any logic looking at the actual facts. It's like these kind of cults are everywhere now.
And my take on the stock price remaining as high as it is is that there are a relatively small number of cultish-believers (maybe 5-20%, I really don't know beyond that it's a small minority), and then everyone else pretty much knows this stock is a fraud and is eventually going to 0, but is just trying to time it so that someone else is holding the bag. Very similar to how Hertz spiked after they filed for bankruptcy: pretty much everyone knew they were going to 0, it was just a bet on who could time it best.
His war on shorts has created a narrative that's gotten eaten up in the tech sector. Heck, you can see it in the comments on this post.
We poor tech companies are just the victims of these big, bad, evil short sellers. If you'd just leave us alone, man, so much disruption! We just need a few more billions and, we swear, we'll be profitable in no time.
Edit: Apparently people are getting very confused by the point I'm making here.
I'm not saying Telsa and Nikola are equally fraudulent.
I'm saying Elon Musk is responsible for pushing and promoting a narrative to de-legitimize short sellers, and in doing so, has undermined an important function in the markets that helps prevent companies like Nikola and Wirecard from succeeding in defrauding the public.
I didn't say Elon and this guy were similarly shady.
I said Elon has been a huge voice in pushing and promoting a narrative that short sellers are evil, and that then allows frauds like Nikola and Wirecard to flourish.
And I stand by that statement. In what way am I wrong?
Funny how the possibility of a lying short seller gets all their consternation while lying CEOs do not.
So did Enron. That doesn't mean there's no fraud to be found.
> Before its bankruptcy on December 3, 2001, Enron employed approximately 29,000 staff and was a major electricity, natural gas, communications and pulp and paper company, with claimed revenues of nearly $101 billion during 2000.
Much of that apparent revenue was fraudulent, but not all of it. Enron really was an energy company, but was also engaging in fraud.
> They could have tried a little harder with the name. It makes me take them less seriously with a copycat name like they're not confident enough in their product and need to glom onto Tesla's success. What an awful decision. The truck looks neat, though.
Response to the above:
> I don't think that truck is ever seeing the light of day; the name and the rest of it all seems incredibly unlikely to materialize except as some money in someone's pockets."
Sorrento (SRNE) went from $1.70 in March to $19 due to peddling Covid this and Covid that (currently at $7 with a $1.78 billion market cap).
Moderna (MRNA) went from $18 in February to $95 at the peak of Covid vaccine mania. At the top it had something like a $37 billion market cap, which is not much below Biogen's $44 billion market cap (Biogen has $14 billion in sales and $7 billion in operating income).
Tesla, the electric car company is his last name.
Nikola is his first name.
For a couple days, news of Nikola being fraudulent were all over everywhere, and when I finally clicked on the link, it's from... someone who is obviously shorting the stock. Every short seller ever tries to convince everyone that the companies they're shorting are doing all sorts of shady stuff.
In this case, everything in the report looks legit, but the number of people credulously citing this report without anyone mentioning that Hindenburg has a massive financial incentive to have Nikola implode has been surprising.
OTOH, short sellers actually have skin in the game, they're putting their money where their mouths are. It's an important mechanism in the public market, which counteracts the existing bias in favor of stock value appreciation on account of shareholders endlessly shilling the stock.
The only organizations that publish equity research are investment banks (which rarely publish negative articles since they want to be part of potential future M&A activity), and hedge funds.
This type of research takes significant time and effort, and almost no one else does this except short selling hedge funds.
You should certainly take that into account when analyzing their report, but it does not mean they should be disregarded.
Unlike Tesla and the never-ending $TSLAQ "Tesla is nothing but fraud", it appears that they really have something here with Nikola, even though my knee-jerk reaction to the short-sellers is one of mostly disgust.
I think the problem is people don't understand what fraud is. Fraud does not mean fake. A company can have products and still be a fraud. A CEO can lead a multi-billion market cap company and still be a fraud.
In fact the most successful frauds rely on having a real semi-viable company built around the fraud because it becomes easier to perpetuate the fraud.
Nikola was on that path too. How far would it have gotten without the vehicle demo? Without the factory? In there, there's quite likely the seeds of a viable company, but they did not achieve escape velocity (e.g. sheer cash reserves, cult of personality, and share price) fast enough to keep the press away from fraud.
If financial journalists were as vicious with other companies that the short seller community has mountains of evidence against, then half the Chinese companies on the US markets would be gone.
In order to have a functioning market, we need to base valuations on more than just "stonks go up".
But the US has more companies and activities going on and likely more fraud just by volume if not the regulatory capture and other issues from the current administration like secretaries who want to dismantle their departments. The administration itself is fraudulent, laundering campaign money to private property or court/lawyer costs, or simply rewarding friends like the current USPS head donating a bunch of money to the GOP then getting their position while holding millions in stock of USPS competitors. It's just so blatant and corrupt but nothing happens.
Everyone with the right ideas, the right motions, is always attempted to be silenced.
Life really is a circle.
But when shorts simply make up stories out of spite or manipulation, like those guys screwing with Tesla calling it fraudulent, it's exactly like pump and dump in reverse. The difference might be that shorts are stuck when a stock is rising legitimately and have no recourse but to use fabrication.
"Pump-and-dump is an illegal scheme to boost a stock's price based on false, misleading or greatly exaggerated statements" - Investopedia
Well it's a good thing that's illegal and there are whole departments in the US government that exist to deal with it.
Funny, though, that there hasn't been (edit: m)any securities fraud investigations of short sellers in recent memory.
Makes you wonder who the real liars are: the shorts, or the targets of them?
Is Nikola and Wirecard enough, or do you want me to go digging for more examples?
> The SEC’s complaint charges that Gregory Lemelson and Massachusetts-based Lemelson Capital Management LLC issued false information about Ligand after Lemelson took a short position in Ligand in May 2014 on behalf of The Amvona Fund, a hedge fund he advised and partly owned.
Or maybe this guy?
> The SEC alleges that five months ago, Berliner disseminated the false rumor through instant messages to numerous individuals, including traders at brokerage firms and hedge funds. The false rumor also was picked up by the media.
Funny how the business gets all the sympathy, here. Meanwhile, the stockholders--i.e. all of us--get screwed if a fraudulent company doesn't get exposed.
If a company goes public, the public has every right to scrutinize it and ensure they're above board. Short sellers play a critical role in providing that kind of scrutiny.
Isn't that called your mom for deciding not to become a doctor?
It's interesting that everything they have done is not PROVABLY fraud, and yet is on the very line between slightly unethical and actually illegal
As someone not personally involved, I find things like this and Theranos fascinating. I'd love it if Theranos was real; Holmes obviously played on that very well. Green tech is also prone to this effect.
Add to that the "fake it till you make it", and "only cheerleaders allowed" attitudes at startups; the "reality disruption zone" of founders, etc, etc.
Are you stopping another Theranos, or are you killing another Tucker?
Disclaimer: I work for GM, but not on anything related to Nikola. I have no personal knowledge about Nikola from work.
Personal Opinion: Nikola is in the darker side of the gray area; I think there could still be good outcomes, but it looks pretty marginal.
Next up ... perpetual motion.
It's pretty obvious that there isn't anything here at this point.
Made me curious if there are any "pre-revenue" startups (let's say revenue < .5% of expenses) that IPOed and didn't eventually collapse. After all, it is a particularly ballsy move to IPO without any actual revenue, never mind profits.
The effect his lies have on the stock market is secondary.
You also stated at one point, "This is based on my own data, owning multiple Teslas over four years."
So... why? Why do you do this?
I don't get these people. I'm not sure if they are paid shills, or true believers. I suspect there's a bit of both to be found. But I will say this: in my estimation the haters outnumber the fanboys by at least a factor of 100.
I don't think paid troll farms were really a thing in 2006. They are now, and you see less apple dissent. So I'm not inclined to think these things are related.
The analogy would have worked if Trevor had actually tried to drive the "fully functional" vehicle that wasn't a "pusher" around. Even if it had failed, then we'd have seen the truth there too.
Nikola has a truck that goes downhill