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Turkish Magician Built a $600M Nasdaq-Listed Scam Based on Lies (hindenburgresearch.com)
337 points by colinprince on June 2, 2022 | hide | past | favorite | 182 comments



The OP references an analysis from Seeking Alpha in 2021, but it turns out that there's yet another article from Seeking Alpha[0], published all the way back in Nov 2019, calling ENOB a house of cards and highlighting a lot of the same concerns. It blows me away how fraud that's already had proof dug up by journalists can just sit there with no action from regulators for years on end. Maybe it just needs to go more viral before it stops being ignored or left unseen?

[0]: https://seekingalpha.com/article/4307809-enochian-bioscience...


I think most people grossly overestimate the ability of government to act on fraud, scams and crime, even when there is information available. I see this with other scams & ponzi schemes. A common sentiment from both victims and con-artists is "if this is a scam, why haven't the police/government/etc... closed it down". All our governments are dysfunctional & ineffective to some degree and there just aren't enough resources to cope with everything and the burden of proof for action is high. Normally some political will is needed to prioritise an investigation into a particular company. Regulators are underfunded and outgunned by those whose massive profits rely on outsmarting them.


"Regulators are underfunded and outgunned by those whose massive profits rely on outsmarting them."

That's a feature, not a bug, and generally true in any country.

If regulators were correctly funded and staffed, they would have time to look into the shady dealings of the rich and powerfull. That will not do.


Indeed. Corruption takes many forms and in most Western countries that like to think they don't have corruption, allowing the rich to set the rules, decide the referee and how to hobble them is a very popular and effective form of corruption.


> Corruption takes many forms and in most Western countries that like to think they don't have corruption

Yes. Most of the corruption stats are measuring “perception” of corruption and they are also using the traditional, blatant meaning of corruption where money is exchanged for favours.

But corruption in the West have evolved to be much more subtle and essentially impossible to catch (at least without major reforms). And as you said, they hold the power to fix this :)


It's not really subtle at all though. It's just that it's been entrenched into "how things are done" to the point where most people don't take a step back to view things objectively, and realise.


Isn't it the same in the countries that are looked down at because they have the 'overt' type of corruption?

It's just the way things are done there, and it's so entrenched that people cannot step back and see it rationally. Unless they are, say, from a country where the corruption has taken on a different form, or from Mars.


So true, in Dutch parlement it is almost forbidden to say the word corruption. It has to be rphrased as 'mistakes'


There is no strong reason that a regulator funded enough to go after every scam wouldn't instead spend much of the time chasing their own personal or political enemies.

There is evidence that they wouldn't use the resources in the public interest: since we know that the NSA is well funded with a budget that isn't up to public inspection and it has used its surveillance powers for the fulfillment of its staff's prurient interests.

"We just don't have a way to solve this via authority" is also a possible answer.

It's fundamentally a question of scalability: Asking a regulator to protect everyone just doesn't scale, in anything but the most draconian police state there will always be more crooks than regulators (and in a police state the crooks become police). So the primary defense must always be an individual and personal responsibility, as irritating as that is. The regulator then exists to backstop people's personal protection, dealing with what slips through and helping to keep the personal costs tolerable.

Doesn't mean that our regulators couldn't do better. I think they could. But there is only so much you can expect via regulator and law enforcement action.


>If regulators were correctly funded and staffed, they would have time to look into the shady dealings of the rich and powerfull. That will not do.

Yea no - if they were more funded and staffed they would audit you and other small players - big players leverage connections to dodge stuff like this all the time.


It depends on their priorities. Prior to the cuts to the IRS in the Trump administration, their priorities were in auditing wealthier people and they had an excellent rate of return. Quite obviously even though rich people have lawyers to push back and more sophisticated tax hiding schemes, the payoff when you succeed is huge. And even though you need a well staffed, competent team, it’s still cheaper than the manpower clawing back a few thousand dollars each from tens of thousands of tiny audits.

Are they catching the biggest Panama-paper level players? No those people have too much sway. But they can be very effective against the “ordinary” rich people.


> If regulators were correctly funded and staffed, they would have time to look into the shady dealings of the rich and powerfull.

Once regulators were correctly funded and staffed, they would become the rich and powerfull.


Reminds me of the line in Watchmen: "Who watches the watchers?"


In my experience government regulators are typically follow their incentives which is tot take on cases that are easy (some one else’s does all the hard work and puts it in their lap), generate career making headlines, or generate revenue for their office (regardless of whether the targets actually did something - extortion)


This case sounds like the definition of easy!


Wait, we don’t live under a totalitarian state with complete with unchecked power and total surveillance at all times?? /s


It's unreasonable to expect the government to verify all the information all the time. We need a strong deterrent for fraud by prosecuting it when it happens. I feel somewhat sorry for the shareholders but it seems that many of them were in on it or should have known better.



> All our governments are dysfunctional & ineffective to some degree and there just aren't enough resources to cope with everything and the burden of proof for action is high

You know what a time honored way to make dysfunction worse is? Add money.

The incentives in these organizations are set up all wrong for delivering "good for society" outcomes beyond some local minimum of catching the smallest fish. Money won't change that.


Yet get busted with a baggie of a controlled substance, go directly to jail.

Look what happens when you put white collar crime on a "bad neighborhood" map:

https://whitecollar.thenewinquiry.com

A mugger will take your wallet. Those people will take your life savings.


Government is well intentioned but easily corrupted.

It is better to have NO regulation and have people know they need to look out for themselves, then to have the fake supervision that we have.


This is why on public stock markets we have short-sellers. They are the bug bounty hunters of capitalism.


I could be way off, is this not like a broken clock is correct twice a day?

There are likely articles written about every legit investment as fraud with some set of numbers to back them up.

If you look hard enough there is "proof" that the usd dollar is a scam, which I think we can all agree is not true.

I doubt regulators can investigate every potential fraud and instead have to be wise where they allocate their limited resources.

This is an unfortunate case of that system not working, but I think that the system works enough that we can be sure 95% of listed companies are not fraudulent.


>There are likely articles written about every legit investment as fraud with some set of numbers to back them up.

Are you not able to read an article and discern that it could be plausible versus nonsense?

>If you look hard enough there is "proof" that the usd dollar is a scam, which I think we can all agree is not true.

Oh, you can. I don't understand the premise of your argument here, then. I expect the same ability from our regulators.

>but I think that the system works enough that we can be sure 95% of listed companies are not fraudulent.

What do you mean by "are not fraudulent"? You mean aren't complete scams? Sure, but I think that's a low bar. I believe far more companies are committing fraud than 5%, though they wouldn't be considered outright fraudulent companies.


I'm not sure you understand how regulations work. For the most part they are enforced after the fact. The SEC doesn't have tens of thousands of employees to do due diligence on every single listing out there. That's just completely impossible.

That said, this is a great example that huge returns in the equity markets are possible if you're willing to do the work. If you read about a stock in Bloomberg you're months too late. It's the smaller edge cases where the price discovery goes all out of wack.


Although there are good, competent and motivated professionals in all governments, they are overwhelmed by a cult to inefficiency.


There were numerous skeptical articles written about Bernie Madoff during the years he was running his Ponzi scheme. Nothing came of them. Regulators generally don't step in until the system is already blowing up.


> proof dug up by journalists

I'm not sure SeekingAlpha is viewed as a formal journalistic channel. It's the equivalent of Medium where amateurs can participate, too.


>It's the equivalent of Medium where amateurs can participate, too.

How do you define who is an "amateur" vs "professional" journalist? And what makes the latter more likely to tell the truth than the former?


>As part of our research, we purchased a similar black market Russian medical degree from the same school, with the same claimed major, the same date, and the same “official” stamp as Gumrukcu’s. The process was surprisingly easy—the hardest part was smuggling it out of Russia through a neighboring country to the U.S., given new wartime export restrictions.

Wow... that's... interesting. Did their lawyers sign off on that?


Do you think any laws were broken? I'm not certain.

Purchasing a fake degree most likely isn't a crime (passing it off as a real one most likely is, perhaps depending on context).

Exporting a piece of paper from Russia is also probably OK, even with the sanctions? You'd want to be sure you didn't pay any sanctioned people, but that's probably not that hard. I imagine that the hard part might mostly be that the usual obvious shipping services aren't usable now if they've ceased operations in Russia.


In Turkey, there are some fascinating scams and corruption going on or blowing up, Turks don't get impressed for anything less than a billion dollars these days. Sometimes I feel for the people who don't speak Turkish and missing out the drama. Now I see that scam exports are happening.

The person in question seems to have some footprint in Turkish media too, presented as the genius Turkish doctor doing cutting edge research in the USA. These people often exploit the patriotic feelings of the people. Any questioning of their claims is viewed as treason by the wider public, so they are usually immune of scrutiny up until the money dries out and someone starts screaming "where is my money".


Andrei Jikh is on track to a similar amount but by selling poor financial advice haha.

Yes, in 2022 we have reached a point where the low-bar for being a youtube "financial influencer" is literally lacking a college degree but having experience as a magician.


Are these related to the YouTube ads I get all the time about how there's "a better way to make money through Amazon with Audible!" or similar "passive income" ads that I see all the time? It's astounding to me that we've gotten back to the point of "GUARANTEED RETURNS! NO WORK!" being so convincing that I even see people on here talk about it casually.


No, those are separate, but yes I agree that stuff is toxic.


At least he's pleasant. Isn't most of his financial advice "buy index stocks"?


Interesting, just went to the channel to look and the comments are full of people promoting a scam amazon crypto:

https://amazonwt.com/

Interesting to see the scams play out in real time. To be clear it looks like bots on his channel not something he is actually promoting. His content seemed not that bad? Extremely clickbaity for sure.


I like how they made the cursor to a hand when hovering over the comments, as if you could click it, but it actually does nothing and is just a css class :D

Also, lol @ the comments: https://amazonwt.com/js/ytc-settings.js

... actually, when I think about that, I believe those scammers are German, IMO. They used the word "commis" for comments, which kinda looks like a false friend from the german netspeak "Kommis". They also have a german comment in there, "Geht das echt" (=> "Does this work", very non-ML, native speaker translation), no other non-english language. Mhh.


His videos, his comments. He's responsible for moderation.


Another proof the market is not efficient.

https://www.investopedia.com/terms/e/efficientmarkethypothes...


Wouldn't 'efficient' price in the fact that for the past couple years the market has been going absolutely loony? There's probably a fair number of Internet people propping up stocks that should be dead by now because they think there will be another GameStop-style event and it will happen to their favorite ticker.


Could be. That is why is called the "Efficient Market Hypothesis" :-)


How about JPMorgan’s chief market strategist Marko Kolanovic who had been advising client's to buy the dip week after week...

https://www.bloomberg.com/news/articles/2022-06-01/jpmorgan-...


> Yes, in 2022 we have reached a point where the low-bar for being a youtube "financial influencer" is literally lacking a college degree but having experience as a magician.

Well magics got him very far all right... I guess it's where he learned how to manipulate people and get their trust. Although I also imagine, there are more people that didn't fall for his tricks than the ones who did, but the few of them that did fall for his scams were rich enough to provide him with a luxury life style, that guy is still a millionaire.

I mean exploiting desperate people with cancer with a bullshit cure, at a premium, what a complete sociopath, no wonder it escalated to murder...

I find it absolutely crazy how easy it was for that guy to relocate in USA despite being wanted in Turkey, especially after 9/11, in that little time. When I see how hard it is for people who are trying to get a greencard legally...


Re the USA relocation, if he had money and given all the corporate shells he used, it's not that difficult. He could have had a US company that he controlled get him an L1 executive transfer visa to start with.


> I find it absolutely crazy how easy it was for that guy to relocate in USA despite being wanted in Turkey

I was under the impression that the US specifically wanted to host certain Turks as a sort of "what if the balance of power in Turkey shifts?" foreign policy strategy. Gülen's been here since 1999. Being wanted in Turkey is obviously not an obstacle; that's the reason we let them in.


Why did you mention Andrei Jikh?


It's crazy reading some older press on this guy [0]. It seems he duped people who should know what they're talking about. How did they fall for it?

> "Dr. Serhat recently presented his research findings at the 2021 Conference on Retroviruses and Opportunistic Infections (CROI), regarded in the medical research community as the leading HIV and viral research conference in the world. His Hijack RNA treatment method is an elegant scientific approach that highlights his signature creativity for addressing these treatable, but incurable illnesses," says Dr. W. David Hardy, Adjunct Clinical Professor of Medicine at The Keck School of Medicine at USC. "This strategy beautifully reflects Dr. Serhat's exceptionally keen understanding of how viruses work."

[0] https://www.prnewswire.com/news-releases/la-based-research-s...


PR Newswire is a database of ads written by companies about themselves.

Hardy is in on the scam. He's a paid medical advisor to the company. His job is to trade his credibility for investor dollars.

https://seraphinstitute.org/team/david-hardy-md/

He's apparently 60+ years old, despite using a younger looking photo. Retirement-age, cashing out his credibility for a chance at one big score.

Back on 2021 a different org called out Enochian/Hardy's fraud:

https://www.treatmentactiongroup.org/cure/media-monitor/stor...


Greed overwhelms the human ability to act based on reason the same way anger and lust do.

Intelligence and education are no defense against these passions overwhelming our brain's executive function.


While this guy definitely appears to be guilty of a bunch of stuff, it's worth noting Hindenburg Research, the firm that paid for and published this article makes money by discovering over-inflated investments, taking a short position, publicizing their research and profiting when the stock drops.

Arguably, Hindenburg is providing a useful service in funding speculative research and then educating the marketplace when they discover a significant value disparity. While Hindenburg is often correct, just keep in mind what they publish isn't from a neutral POV.


No conflict = no interest

It is impossible to reconcile "put your money where your mouth is" with "wait and now you have a conflict of interest!?"

> "just keep in mind what they publish isn't from a neutral POV"

even as a mere FYI disclaimer on their behalf, they already have their own disclaimer, twice

> Initial Disclosure: After extensive research, we have taken a short position in shares of Enochian Biosciences, Inc. (NASDAQ:ENOB). This report represents our opinion, and we encourage every reader to do their own due diligence.


Oh, so you're saying the authors bet money on the truth of what they wrote?

Good to know, my priors as to its accuracy went way up.

You can go to prison for lying to make money, you know. It's not civil like libel, it's fraud.


It's mechanically possible to come up with fake accusations, take on the short position, publish the accusations, and cash out on the immediate stock drop, since just publishing the report is itself a market moving event, betting that the SEC either won't notice or won't bring down the hammer hard enough to wipe out their gains.

This might have happened before with a different short selling institution in 2019 when an investigator working with a hedge fund published a report accusing GE of accounting fraud[1]. The accusations led nowhere and GE's stock rebounded rapidly after an initial ~10% drop. I couldn't find details on who the fund was or if they made money cashing out on the dip.

I don't think that's what Hindenburg is doing here, and they have a pretty good track record of spotting fraud (IIRC they've called it correctly on a lot of bad companies in the past few years).

[1]https://en.wikipedia.org/wiki/Harry_Markopolos#2019_General_...


Oh, so you're saying the authors bet money on the truth of what they wrote?

Not quite. They bet money that they could convince other investors it was true. Big difference.


Furthermore, malicious prosecution on weak evidence is entirely possible.

Give the podcast Wolfpack Research a listen, starting with Episode 15 -- "Kurt Feshbach".


Truth, but:

1) they say so, in sizeable font, at the bottom of the article

2) they called very well that Musk would try to back out or get a better price on Twitter; they are often correct


They do have a disclosure, but it is at the very bottom of the webpage.


and right after their bullet point summary at the top.


This is an eye opening article. It's disappointing that nobody asks questions when someone with unverifiable credentials claims to have a cure for HIV, cancer, Covid and others, using leeches and mistletoe, this should immediately raise all kinds of red flags.


The company name itself alone would be a bit of a red flag for me. I skimmed the original article first to see if any of the directors were called John Dee or Edward Kelley.

(A quick Web search for 'enochian magic' will clarify the references)


After reading that article, what really blows me away is that the stock is down by only ~30%. I fully expected to see a penny stock by now. I wonder what short position Hindenburg has taken...


These trades become hard at this point, as the stock available for borrow becomes limited and expensive (all of the float is already short)+ the potential for a short squeeze increases (increased by the fact it can be manipulated by insiders)


But who is holding the stock and why?

Or is there no volume and price is wash trading?


Well 60% is insiders and 5% is institutions, which means the other 35% are likely individuals that are in for a rude awakening when they open their brokerage statement (and were likely the victims of some form of pump and dump).

Second you can’t get a borrow or it’s super expensive so there’s no marginal seller…until random retail investors or insiders bail…

Who knows what the algos, market makers, and stock promoters are doing with the stock, but a bunch of wash sales


Hindenburg research does a crazy amount of research on publicly listed companies. What's shocking is how obvious the fraud is and how credulous the investors are. Nikola comes to mind.


How those situations are possible? Why investors are not making any kind of due diligence and background check on the founders and on the technology?

I was scrutinized in deep before being hired by my company, but it seems that people are raising millions just grabbing miracle without any kind of verifications.

Why the system is so vulnerable to con men and snake oil sellers?


> How those situations are possible? Why investors are not making any kind of due diligence and background check on the founders and on the technology?

Not only some people within the company questioned the magician's credentials but were fired for doing so and these people were subsequently harassed by the company itself to make them keep their mouth shut, in order to protect the "reputation" of the scammer.

To me it seems like some higher ups were complicit...

> Enochian’s former CFO is currently embroiled in an undisclosed lawsuit with Enochian’s leadership, claiming he was fired for asking “critical questions” about “serious financial improprieties” and large payments to Gumrukcu, and for questioning the company’s close association with an individual accused of numerous felonies.

So many redflags...


>So many redflags...

Investors literally don't care about red flags:

https://www.vox.com/recode/23142106/adam-neumann-crypto-carb...


Investors LOVE red flags. It shows a healthy can-do attitude that won't be blocked by laws or ethics.


> So many redflags...

Redflags start with the history of the founder. If the VC asks about a PhD proof, the credibility of the founder will be destroyed.

The funny things is that those scanners (as sociopathic narcissistic) know very well how to hide that with foggy and not verificable experiences.

Sometimes I am thinking to found a startup that can verify the con men bullshit as a service


Because the system is tuned to look for quick profits. Are they losing from time to time to cone men? Yes they do, but that's business risk.


I understand that is business risk, but con men are easy to spot on. Think about Theranos or Nikola: the histories of the founders were completely fake (who can believe that Elisabeth Holmes sold C++ compilers to Chinese universities when she was teen ager?) and their technologies were simply "too good to be true". With just a bit of good sense, the VC can save lot of money, this is what I don't understand. Otherwise it's just like gambling at roulette.


The thing is, lots of Ponzi schemes make money for early investors who walk out at the right time. Not sure if this happened for Theranos or Nikola, but it definitely happened for Madoff's scam: some big players were pretty sure that it was a scam, but they saw it growing and invested in it, withdrew at the right time, and left with plenty of perfectly legal gains.

Basically, investing in scams can be a great way to profit off the scam without incurring the legal costs when it's discovered. Of course, you still have to be careful not to be left holding the bag, but that's a common risk with other investments as well.


Sounds like history of whole crypto industry.


Those gains, anyway, got clawed back.


>Think about Theranos or Nikola

Do a search on HackerNews for early articles on Theranos. I can recall a lot of accusations of "sexism" being thrown around if anyone questioned the narrative of Holmes' technical pedigree.

>With just a bit of good sense, the VC can save lot of money

Or they can get on board the Ponzi and just make sure they get out in time, and make billions.


She lived in China at the time. She said she "distributed" compilers, as in "sold pirated copies of MSVC++ to noobs".


Using the name “Enochian” was a pretty clear warning sign the dude was into magic.

However, the history of Enochian magic is actually quite interesting and revolves around John Dee, the origination of the idea of manifest destiny, and ultimately England’s exploration of the “new world”.


The guy manifested himself some lengthy prison sentence.


This is a systemic error. How can large conpanies and individuals not detect this sort of grifter?


Because his contributions are comparable in quality and impact to those of most legitimate executives


This is exactly right. Elon Musk can do it, this random street magician can do it, Elizabeth Holmes can do it. We hold these millionaires up as if they're some sort of super geniuses. Nope, they're mostly just charismatic. The world is yours if you can talk a big game, even if it's mostly bullshit.


You know that Elon's companies actually build electric cars and rockets that go to space, right?


He's smart enough to say "self driving cars are coming soon" or "neural link will be done in five years" or the millions of other things he's said are right around the corner. The other grifters weren't as smart.


All companies should seek to be ambitious. It’s one thing to have a tangible product in development be hyped and other to be selling literal vaporware without the internet of delivering or lying about possessions.


>It’s one thing to have a tangible product in development be hyped and other to be selling literal vaporware

And which is "Full Self Driving"? One man's very early stage "tangible product" is another's "vapourware".


Elon has things to show for these claims. His cars do self-drive, though not at an average human level yet. But if you've been following the progress, he is quickly approaching that point.

Same with neuralink, it's not just words.


Musk bought into both of those, however much he would like it forgotten.

The only thing he started himself that has worked out so far is SpaceX. Yet the whole Martian colony line is 100% grift. Starlink might yet flop, as it needs more subscribers than it probably can support. SpaceX has been very good at eliciting government handouts.

Starship will absolutely not be able to turn around in less than 30 days until after they figure out a tile scheme different enough from NASA's, if ever.

It is very far from certain the chopsticks catching scheme will work.

Each time a Superheavy detonates on the launchpad (which will happen) will set them back months, because it will wipe out the whole "stage 0" and tank farm.


Typical anti-Musk talking points.

> Musk bought into both of those

Very early on. And grew, at least Tesla, many orders of magnitude from early prototype to mass production.

> SpaceX has been very good at eliciting government handouts

Contracts, not handouts. Which they have delivered on in spades.

Starship and Starlink are still early, yes. But Falcon 9 has brought launch costs down considerably, is putting more mass to orbit than the rest of the world combined, and is currently the only way the United States can get astronauts into orbit.


You correctly note that of all Musk initiatives, only SpaceX has shown partial success, and that only via direct government subsidy.

You correctly do not assert that Martian colonization or suborbital passenger or freight service are better than grift even with a 100% Starship success.

You correctly do not assert that any other Musk initiative, including hyperloop, domestic robots, self-driving cars, electric trucks, are anything other than grift.


He has accomplished more than many people thought possible, so I’ll continue to believe he will deliver some, but certainly not all, of the things you mentioned. Being ambitious and risky doesn’t make it a “grift”.

And “government subsidy” is a complete red herring. Inventing and building things takes money, I don’t care if that comes from the government or private investors. I’d say he has plenty to show for the investment the government made in his companies.


Of course he has plenty. He got it from us.

The only reason he has as much as he does is via grift, puffing the value of his properties. He has delivered a bunch of legendarily unreliable expensive cars and a bunch of rocket launches, and been handed pots of money of far greater value than anything he has delivered. Grift.

And he gets free puffery from internet volunteers.


Elon Musk may not be a sympathetic Human being, but he certainly isn't a grifter.

What amazes me the most is that he is able to get project management in place that works. Somehow most (or all) of his companies get shit done, and it is indeed some amazingly complex shit. That may be his super power, beyond having been lucky with his first investments giving him the billions for the next endeavors.


One thing to remember is that these companies are ones that he's effectively just bought, he's not necessarily bootstrapped them and dictated how they should operate and organize, we don’t know how involved he is. The only things I've really heard from him as a leader are from Tesla - demanding people work longer hours, forcing employees to work during covid, union busting and stuff like that. So this suggests that either

- he is publicly brash and careless, but privately very efficient and savvy

- or his companies get shit done without his involvement, or despite his attempts at getting involved rather than because of them.


Blatant misinformation. Musk joined Tesla when there were I believe 3 or 4 other people. He founded SpaceX himself. He help fund both with essentially all the money he made from PayPal. And he’s known for being incredibly hands on, sometimes literally living in Tesla’s and SpaceX’s factories.

He might be brash but he’s clearly been an effective leader.


The Giga Factory was made by Musk and it was his idea, it is the epitome of efficiency.


Selling, not just promising, people FSD for years when it was and is no where in sight isn’t a grift?


"Nowhere in sight" is a lie. You can clearly see the progress of FSD beta. The last one is quite good.


It’s not alive. It’s an observation of the reality of the thing that Tesla has actually shipped. Dangerous, prone to failure, beyond untrustworthy. Don’t be fooled by the easy cases. No one ever believed that the easy parts would be the problem and Tesla has made zero progress on the hard aspects.


He said lots of crazy things would happen. Most of them have.

A grifter promises things, none of which have ever happened.


I don't think most of them have, in fact most of them haven't.

Hyperloop, Cybertruck, inter-city rocket flights, Mars colony - these are ideas that haven't or won't succeed because they're ridiculously impractical and/or pointless, and seem to be more about projecting a futuristic image than anything else. (The alternative explanation is that he's a lot dumber than he seems.)

But, he throws ideas at the wall and some of them work out. It's a similar thing venture capital companies do with their startup portfolios, but mixed in with a lot more futuristic PR fluff ideas.


> The alternative explanation is that he's a lot dumber than he seems

In light of his recent difficulties with Python (and in combination with a few other bizarre comments and actions) this is starting to seem increasingly likely.


On the other hand, he has, in fact, built the world’s largest EV manufacturer (~70% EV market share, globally, 2021) and world’s largest space launch provider (~66% mass to orbit, globally, 2021)


You're missing reusable rockets, robot barges, supercharger network, desirable electric cars, cars over 400 mile range, installing a battery farm in South Australia in 100 days or less...

I can't believe you're serious if you don't think any one of these would be considered career-capping achievements for most people.


Oh, satellite-based internet as well. I forgot an enormous achievement due to the length of the grifter's list.


Starlink may actually be a great example of the grift. Starlink is not a widely available functioning system yet, and there's a strong chance it may never be. Musk himself has been dropping hints to that effect, and there are plenty of analyses out there of the problems with the Starlink business model. Musk's own statements make it clear that he knows Starlink has a high chance of failure - but, it has a big benefit for him because it drives demand for SpaceX launches and, at least until it does fail, it bolsters the public image and feeds the futuristic vision he's trying to sell people.

My previous comment wasn't saying Musk hasn't achieved anything. I was making a couple of points:

1. He tends to throw more ideas, more publicly, at the wall than most tech entrepreneurs.

2. Some of those ideas seem to be obviously impractical, to the point that he (hopefully!) must realize that, and the're probably intended more to boost the image of his companies in order to pump up stock value. And if you accept this line of argument, it's been a staggering success, making him the richest on-paper person in the world based on a car company and an aerospace company which, without his clever grift, would be worth a tiny fraction of their current valuation.


If he listened to you he'd probably get extremely depressed really quickly, despite all the success he did undoubtedly have!


He'd only get depressed if he actually believed in those ideas, as opposed to just using them for image-building purposes. For the inter-city rocket flight one in particular, it's hard to believe he could seriously think that's practical, and certainly if he ran the idea past any experts at his companies they'd be able to tell him why it's not.

If you look at how he uses Twitter and other public ways to pump up stock prices, it seems likely that he figured out early on that there's lots of money in convincing people that the future is just around the corner and that you should buy shares in his companies to get in on the action.

He's the wealthiest-on-paper person in the world not because of the value produced by his companies, but because of the future value he's convinced people that his companies have.


All shares are priced based on the total value of a company over its lifetime.


Looks like they use agile methodologies for hardware creation, so there may be less project management than you think.


Whatever they do seems to work a lot better than what others do or don't call "agile".


Things that people do or don't call "agile" presumably encompasses everything in the universe.


Yes, this is my point. I'm not a fan of the "agile nomenclature". I see project management failing a lot.

I can only marvel at the stuff and complexity SpaceX and Tesla seem to be able to pull off, both in terms of software and hardware engineering and other organizing and logistics.


You know Enron did actually trade energy right?


>You know that Elon's companies actually build electric cars and rockets that go to space, right?

It wasn't this way 10 years ago, but the list of things his companies are purported to do is now quite a bit longer than what they actually do.


Sure. But they do actually do very impressive things. Generally people we write off as "grifters" do not actually produce anything of value.

And 10 years ago, the list of things they were merely purported to do includes many of the things that today they actually do. E.g. manufacturing EVs at scale, reusing rockets, etc.


Elon musk is pretty similar if you take a good hard look. He was an unsuccessful manager at a software company which got acquired. SpaceX is a successful company considering all it went through. It was founded on the basis of a manned carrier aircraft pushing the rocket and do a suborbital split. (they did this for years) Then they got a lot of investment and gave up on the original premise, instead going for controlled takeoff and landing. That failed spectacularly many times, but money kept pouring in. And now we have privatized satellite launches and Elon musk takes all the credit for it.


How is an aerospace company that did 31 launches last year, including some manned ones, pretty similar to a pharmaceutical company with an entirely pre-clinical portfolio of unproven "cures" invented by and licensed from a magician embroiled in a litany of fraud and other crimes?


I do not doubt the success of spacex, but Elon Musk is not the visionary genius people take him to be. His main skillset is luck and persistence.

I'm sure you've heard of the boring company which would revolutionize traffic except it did not and never will. He says "I have this idea make it work". This is the limit of his capability. In that way he's pretty similar to Elizabeth Holmes, except he isn't playing with the health of individuals for monetary gain.


Isn't success x% inspiration and [significantly larger than x]% perspiration? How does it matter if he achieves it through persistence. He is consistently able to build teams that deliver.


Consistence is something that is continuous and at the same level. This is not the case. But people don't care because SpaceX exists. At least some good came out of all this.


That is some pretty strong black and white thinking. I never said anything about Elon Musk being "visioniary genius". He does have some skill. He certainly has no fraudulent intentions.


Well, are you sure about that? The whole market manipulation he does with stocks and crypto is not ‘fraudulent intentions’? Sure, he might not be frauding with his products, but I would think it is fraudulent. Did he not actually pay a securities fraud fine a few years ago? And he just keeps doing it; he makes more from the rise and fall than he will ever pay in fines. It is smart but they are fraudulent intentions. We don’t really know how many corners were cut (or how deep) in other places; if they didn’t succeed we would have known about them probably, but things are easily forgotten when there is success.


The point being that there is a lot of success coming out of Elon Musk's ambitions and none so far out of the originally discussed pharmaceutical enterprise.


Sure, got your point. However, you said he has no fraudulent intentions. I think he does and that it is one of the pillars for his success; manipulate to get more money, use that money to fund ideas (and get others to co-fund which is easier if you pony up too). He just doesn't get caught too much.

I agree he is not just a 'luck' guy; he work(ed)(s) hard, is very persistent & pushes boundaries; he also knows how to manipulate the world successfully to pursue his goals, like Jobs & Gates & others before him. However, as far as we know, they weren't walking such a fine line close to fraud (although Gates was of course somewhat close to the illegal line with his anti-competitive actions in the EEE times).


> [SpaceX] was founded on the basis of a manned carrier aircraft pushing the rocket and do a suborbital split (they did this for years)

Is this actually true? The only air-launched SpaceX project I could find was the cancelled Falcon 9 Air [1], which I don't think actually flew, and was years after the Falcon 1.

Was there some undocumented air-launched SpaceX project going on between 2002 and 2006?

The hyped private project I remember from around that time was SpaceShipOne[2], which won the "X Prize", but that was done by Scaled Composites, not SpaceX.

[1] https://en.wikipedia.org/wiki/SpaceX_launch_vehicles#Falcon_...

[2] https://en.wikipedia.org/wiki/SpaceShipOne


You're right, at some point SpaceShipOne boosters were provided by SpaceX, but it wasn't the same company.


Musk has, to my knowledge, never claimed that his own genius is what SpaceX or Tesla is based on. That's very different from Theranos, which was based on claims about technology developed by Holmes personally, or this company which is likewise based on a founder's supposed genius inventions.

Musk is at worst comparable to people like Steve Jobs or Donald Trump: people with a near pathological need to prove that they deserve their wealth by taking stupid risks. Risks that sometimes pay off. For every Trump or Musk, there are probably ten rich sons who took stupid risks and failed so bad they didn't get to take such risks anymore.


The brigade of Elon Musk defenders in this very thread is a perfect example of how his skill lies in crafting his public persona.


Incentives. Who will spend the time?

If he's real, you look like an idiot and might get sued.

If he's good at his con you won't know which other people have also seen through it. If you bring it up with a believer, you're in for a harsh response.

If it's just a temporary con that will die soon, it doesn't need you to help it die.

It costs at least something to do due diligence, so not everyone will know it's a con. You've spent the effort and invested something. You have a sunk cost, why not wait for a bigger fool to come along? This is maybe the big one, because this is a mechanism for snowballing the thing.

End of the day, authorities need more resources to find these kinds of things, and they need resilience against losing cases if they are going to try a lot of shady practices.

Maybe my biggest complaint about this world is when I see conmen living in the open. I've come across several in my life of various sizes.


Willful ignorance?

> In a phone interview, Chairman Rene Sindlev admitted to us “I knew that he had been charged for 14 (felony) counts” but moved forward with the deal and expanded the relationship anyway.


Highly likely they did detect him and view him as a useful idiot who will take the fall while delivering pieces of the pie to the "right" and "innocent" people.


Greed?


Funny that this comes up here now because I recently learned that the co-founder got arrested [1] But at least they have "Strong Confidence in the Promising Future of the Company". In 2022, we have seen so many SPAC's crash and burn so stories like these don't surprise me anymore.

[1] https://app.finclout.io/t/nDxEoGG


A jack of all trades. Was also working on a cure for COVID: https://www.dailysabah.com/turkey/turkish-scientist-works-on...


Wild that nobody at any point tried to verify anything. They must be really convincing.


I've only sold short one company. It was called Parateum, and claimed to sell IoT products to telecoms in emerging economies. They were worth about $550 million at the time.

It caught my eye when I was looking through their accounts and saw a very dubious clause that defined the way they recognized revenue. Basically it said management can unilaterally decide when revenue happens, and they were deciding it happened whenever they dispersed a press release about a supposed new major contract being signed. The money never existed.

I decided they were a fraud for certain when I used Google Earth to search the addresses of their offices in various countries they claimed to do business in. Time after time, the result was a dead end dirt road in the African bush, or some dingy hovel in South East Asia occupied by a suspicious looking night club.

It was that easy. I had the short on for about a year until a major hedge fund released a report on it. Shares fell ~90% pretty quickly. They've been delisted since.


I shorted this Nasdaq-listed fraud: https://www.sec.gov/litigation/litreleases/2020/lr24706.htm. It was a wild story that included a 2000% price increase after they bought a blockchain company, Russell 2000 inclusion and reversal, a CEO who is "a true believer in disruptive technologies and believes that every piece of information is worth millions [and] in the alchemy of structured trade finance," CNBC appearances, a picture of their U.S. operations consisting of three empty desks, and a long trading halt.

https://www.cnbc.com/2018/04/04/controversial-crypto-stock-l...

https://www.wsj.com/articles/longfin-collapse-puts-focus-on-...


I assume you got out before the delisting?


Indeed, or otherwise not tradeable.

How would a broker treat a customer's short position in, say RSX?

https://www.cnbc.com/quotes/RSX?qsearchterm=rsx


> How would a broker treat a customer's short position in, say RSX?

Matt Levine has done a nice writeup about these cases. Basically, you're stuck loaning the stock, so you keep paying loan fees. If you're unable to close the short, you're stuck paying those fees forever, and you never make an actual profit on the short.


I did, but even if you didn't you can still buy back the shares on the OTC market and close your position. The company is now only worth $600k. I should have waited!


Theranos was valued $9B yet no one sleuthed the actual machine.

Nikola Motor Co was valued $22B with a "fully functional" truck rolling downhill.

Maddoff ponzied $65B without a business.

It really is wild that so much money gets thrown at frauds without proper due diligence.


Everybody just assumes that somebody else has done the due diligence. Why else would the company be valued so much? They think. The more the value, the more people jump in assuming others have done the due diligence. So all it takes is a few people with enough money or influence jumping in at the beginning.


This exactly; when your banking or investment app shows the stock, you assume already that it has been vetted by people who know so much more about all this than you.


Managers at GM who signed off on the Nikola stake then had an overwhelming career incentive to hide any bad news, however criminal.


Because it is a gold rush.


There’s a difference between a gold rush and a mad scramble to steal everything possible before the ship sinks.


We see this time and again - to be clear, it will continue forever.

The goal is take meetings with those who don't probe too deep. Who doesn't ask too many questions? Personally a trend I've seen it starts with groups/investors who want to break into the space and jump at any deal because that's all they have. After you get a lead, it's relatively easy to get follow on money that almost never asks questions.

If you're willing to out right lie you can get very far. It catches up as eventually you run out of groups who are willing to believe the lies.


Or just more convenient to not ask


Why verify if you want to make money with it by increasing the worth and then selling?


Highly recommend Fooling Some of the People All of the Time by David Einhorn here as relevant reading.


Go on


Long story short the book highlights the experience of a short seller (similar to what Hindenburg does) who uncovered a fraudulent company and couldn’t get the SEC or any government agency to do anything despite the evidence being in plain sight. Once you read it, you will definitely see how frauds like the OP can and will continue to occur.


Perhaps most shocking, to Americans anyway, the links to public institutions:

> ... close friendship and mentee relationship with Dr. Anthony Fauci and his relationship with Bill Gates, Dybul called Gumrukcu a “rare genius”

> Dr. Brosgart has served as a Senior Advisor on Science and Policy for the CDC since 2011, in addition to her roles as director on Enochian’s board ...


"We learned of Gumrukcu’s actual past by scouring old magic shops and second-hand bookstores in Turkey, finding that he was a local magician. With his stage name “Dr. No”, he studied and taught spoon-bending, firewalking, and performing as a mentalist, claiming magical healing powers and garnering praise from the likes of fellow hucksters like Uri Geller."

This must be an odd kind of company to work for, unless they're based in Turkey. "Joe, your job today is to fly to Turkey and look around old magic shops..."


He actually sold $2 million worth of shares two weeks ago. Good timing, I guess?

https://www.sec.gov/Archives/edgar/data/1527728/000173112222...


Well, hopefully he isn't going to profit from any of this, since he was charged in Murder-for-Hire Conspiracy Resulting in Death.

https://www.justice.gov/usao-vt/pr/two-men-charged-murder-hi...

Hopefully justice will prevail. It's one thing to defraud people, it's another to eliminate one's victim so they don't testify in a court of law...


> s he awaited sentencing following a pleading guilty to one felony, Gumrukcu attended the Nasdaq bell ringing ceremony for Enochian, likely with permission from his probation officer. He was praised as Enochian’s “scientific founder” at the ceremony.

Does NASDAQ have any rules preventing major shareholders from listing if they are actively being investigated or literally on probation? Shouldn't this be a thing? Do they not background check major shareholders of companies trying to list? An alleged major reason big exchanges have valuation requirements for companies to meet the list is to prevent this kind of thing.


This guy definitely deserves a Wikipedia article.


That's nothing.

Energy Vault is over $2B. It was approaching $3B not long ago. It is still a long way to zero, for a transparent grift play.

They could still borrow against their market cap and buy some actually functional tech. And then ruin that.


wow he was quite active. if only he was busy doing good instead what he could've achieved...


Why "Turkish Magician", why not "Magician"?


Makes for an interesting story. Apparently you can scam yourself to the top of the world and cause death and suffering all around even if you are not a big blue eyed turtlenecked white woman with a really deep voice.


Because he’s from Turkey, where he was a magician.


You mean Türkiye?


One cannot enforce how to write or pronounce stuff in other languages, speakers of any language can call Turkey whatever they like in their language and what Erdogan decides has absolutely no value outside of Turkey.


That would be in Turkish and I’m writing in English.


I think parent is referring to that Türkiye is now the requested English term. https://www.trtworld.com/turkey/turkey-to-use-t%C3%BCrkiye-i...


Funny thing is Türkiye is a French exonym for Turkey (la Turquie). It is not even a Turkish word or a word coined in Turkey.

The suffix -iye, however, is also a suffix that is used in Turkish coined words of Persian and Arabic compounds where it means -ness or -ity: https://en.m.wiktionary.org/wiki/یت#Ottoman_Turkish

There is kurabiye (gulabiye = gulab (rosewater) + -iye), and later coins such as cumhuriyet (cumhur (general public) + -iyet).

Türkiye is not such a coinage. In Ottoman Turkish Türkiye would mean Turkness.


Apparently it's supposed to be Türkiye in English now too. If you don't comply, you might receive a stern talking to from the ambassador!


Turkish here. Let politicians use whatever name they want. "Türkiye" is hard to pronounce in English and "Turkey" worked just fine for a hundred years. I'm not gonna report you :)


Apparently based on Kiev vs Kyiv we’ll all switch to Türkiye after Russia invades.


Speaking of Turkey, how is the IT business and startup culture in Turkey? Just generally wondering. One hears very little of this big country in an obscure corner of Europe.


Depending on the administration in the states, you could also just be assaulted by erdogan's body guards with zero recourse.


It’s factual, but I think it’s there because it sounds exotic and makes the title more interesting.


He falsely claimed to have a Turkish MD and probably used the fact that BioNTech was founded by Turkish doctors (and what he claimed is similar to what they are experimenting with vaccines for) to make himself seem closer to the real thing.


Interesting idea, though maybe a bit convoluted. Also Uğur Şahin immigrated to Germany at the age of 4 and was educated there. Calling him a "Turkish doctor" isn't technically wrong, but...


I won't want to get into the accuracy of calling Uğur Şahin Turkish, but for a period of time the "COVID vaccine was developed in Germany by Turkish immigrants" was a really popular talking point, especially in relation to some political arguments that took place in English speaking countries.


If somebody says "Turkish doctor" I somehow assume he means a doctor who grew up and educated in Turkey.

I don't argue with people who identify as Turkish or German. I don't know if Sahin identifies as either or both. I know that it is harder for Turkish immigrants to get a good education in Germany, especially during the time he grew up in. I also don't care much about the debate of how useful immigrants are, because the result may very well be that they aren't on average that useful and that quite a large portion of criminals are immigrants. Usefulness or consequence to society should not matter for the rights of an individual. And immigration control always comes down to violating someones rights in order to somehow get rid of them if they are unwanted for some reason.


Baffling how easy it is for this brand of criminal to run free ruining and even ending lives every step they make. Somehow once you accrue enough money, this becomes mostly acceptable behaviour.

Pharma bro just got out of jail on good behaviour super excited to see how many lives they ruin next...




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