[HN Gopher] Grand jury indicts Trevor Milton, Nikola founder, on...
___________________________________________________________________
Grand jury indicts Trevor Milton, Nikola founder, on three counts
of fraud
Author : us0r
Score : 437 points
Date : 2021-07-29 13:31 UTC (9 hours ago)
(HTM) web link (www.cnbc.com)
(TXT) w3m dump (www.cnbc.com)
| bississippi wrote:
| Most Silicon Valley "CRUD" startups have fraud baked in. It's
| just whose holding the bag in the end that matters. Sometimes
| it's the VC funds early in the stage, sometimes it's the late
| stage investors ala WeWork SoftBank and usually it's the retail
| bag holders post IPO.
| haram_masala wrote:
| Sorry - what's a CRUD startup? CRUD as in create, read, update,
| delete?
| IanClarke wrote:
| Yes! It refers to that all web-applications are "just" CRUD-
| applications in the end, reading and writing data to and from
| a database (e.g. Angular and React).
| sidcool wrote:
| It's hard to overstate the insane difficulty of running an
| automotive company profitably. Tesla is an exception. I don't
| sympathize with Trevor, but I can understand why he did what he
| did. It's a fraud, but I get it why it was done.
| Aperocky wrote:
| What's more surprising is the incompetence to come up with a
| working prototype over years with so much funding!
|
| It's not like there are no electric motors or large batteries
| on the market. It just have to work for a good hour and they
| can't even do that. It's theranos level of embarrassment and
| fraud, maybe even worse, because theranos might have been an
| physical impossibility but Tesla already demonstrated that it
| is entirely possible to do what Nikola claims to (at least in
| prototyping).
| rantwasp wrote:
| next startup: an electric car that analyzes your health while
| you drive. AI to self drive AND to predict if you'll develop
| any health issues!
| runbathtime wrote:
| If you want to commit fraud without any trouble from regulators,
| go start a decentralized crypto currency.
| _game_of_life wrote:
| This should not be surprising to anyone. Arstechnica has followed
| Nikola's terrible and obvious fraud(s) for years now:
|
| https://arstechnica.com/cars/2021/02/nikola-admits-to-making...
|
| https://arstechnica.com/cars/2020/12/nikola-stock-craters-af...
|
| https://arstechnica.com/cars/2020/09/nikola-patented-a-stole...
|
| And many more...
|
| The speculation around this stock has been insane for many years
| now:
|
| https://arstechnica.com/cars/2020/11/nikola-stock-soars-afte...
|
| Top quote: "The market can remain irrational longer than you can
| roll your eyes at it."
| pbreit wrote:
| Still a $5b company:
| https://www.google.com/finance/quote/NKLA:NASDAQ
| robohoe wrote:
| Which is surprising....do they even have a car in the works?
| volta83 wrote:
| A friend just bought 2000$ in shares, because "its cheap
| right now".
|
| The only thing the stock price reflects is how valuable the
| stock is. Nothing more, nothing less.
|
| If each person of earth decided that their life goal was to
| own 100 nikola shares "to feel alive" or "own a piece of
| their failure" or whatever, their stock price would
| skyrocket, and stay high as long as everybody holds.
|
| Those who value stock in terms of a company fundamentals,
| are making the assumption that at least most other
| participants in the market will value the stock in terms of
| its fundamentals as well.
|
| That assumption might be true for some stocks. It isn't
| true for stocks that "people ""just"" like" (or dislike)
| and are willing to pay a premium to buy, because it has
| some other value to them.
| tim333 wrote:
| >or dislike
|
| The disliked ones tend to get valued kind of fairly as
| even if you hate them they pay dividends or similar.
| api wrote:
| Even the _name_ screams transparent fraud, a ridiculously
| obvious attempt to associate with Tesla.
|
| Weren't there VCs who put money into this? What were they
| thinking? Were they being amoral and hoping to ride this pump
| and dump or did they actually buy into this shit?
| itsoktocry wrote:
| > _a ridiculously obvious attempt to associate with Tesla._
|
| Nikola was building barely functional prototypes of their
| trucks years before Tesla was building barely functional Semi
| truck prototypes, for the record.
|
| > _What were they thinking? Were they being amoral and hoping
| to ride this pump and dump or did they actually buy into this
| shit?_
|
| Fundamentally, what have they done that's so evil compared
| to, say, the multitude of things Tesla has claimed over the
| past few years?
|
| For example, Tesla claimed door-to-door cross country self-
| driving tests, oh, about 5 years ago. At what point is it
| aspiration versus indictable fraud?
| ineedasername wrote:
| I don't think "Other companies have made fraudulent claims
| too" is a valid defense. The federal government choosing to
| go after a company that has delivered on less of its claims
| seems reasonable given limited resources to prosecute this
| sort of thing.
|
| Especially as Tesla has done a great job of going right up
| to the border on misleading claims, and even stepped its
| toes over the line a bit, but not in a way that would be as
| easy to prosecute as the more blatant Nikola.
| skystarman wrote:
| Plenty to criticize Tesla and Elon about, to be sure, but a
| lot of Elon's predictions have turned out to be true at
| least when it comes to passenger vehicles. What they've
| done with the EV market for consumers is nothing short of
| remarkable. Obviously Solar and Semi are a different
| matter.
|
| Tesla was run by a technical founder (Stanford PhD pedigree
| fwiw) that knows his shit (though a bit crazy and prone to
| exaggeration and hyperbole) and the company has some of the
| best engineers in the world employed there.
|
| Nikola was founded by a dude with zero technical background
| who as far as anyone can tell had no serious engineering
| expertise in-house. He even hired his brother--a guy who
| used to install carpets--to run Nikola's hydrogen
| infrastructure.
|
| These two companies aren't even in the same league imo
| itsoktocry wrote:
| > _Tesla was run by a technical founder (Stanford PhD
| pedigree fwiw) that knows his shit (though a bit crazy
| and prone to exaggeration and hyperbole)_
|
| Musk was not a Stanford PhD nor a founder, if that's who
| you are referring to. If you can point me to any evidence
| of either that doesn't come from him, I'll be happy to
| stand corrected.
|
| > _He even hired his brother--a guy who used to install
| carpets--to run Nikola 's hydrogen infrastructure._
|
| Can you tell me what Kimball's qualifications are for
| sitting on the Tesla board?
|
| I mean, I agree, the Nikola story is hilarious and
| stupid. But somehow other companies get away with what is
| the same thing. Milton didn't get to claim "aspiration",
| or that the trucks will "eventually" work.
| onethought wrote:
| Even if you draw the funny arbitrary line of "Elon wasn't
| a founder" - the previous founders were technical as
| well. But taking Tesla from a lotus kit, to the brand it
| is today makes me think he really is a founder.
|
| No comment on the Stanford piece, though it seems
| believable...
| borkyborkbork wrote:
| Legally he is a founder.
| https://www.nbcbayarea.com/news/local/tesla-ceo-settles-
| for-...
|
| Kimball doesn't run part of the infrastructure.
|
| You sound like someone who writes SeekingAlpha FUD
| articles.
| admax88q wrote:
| Well... Tesla actually sells real cars. Nikola so far looks
| little different than your average kickstarter that never
| delivers.
| itsoktocry wrote:
| > _Well... Tesla actually sells real cars._
|
| So if you sell cars and land rockets, you can lie about
| other things?
| lazide wrote:
| Hopefully not - but at least you'd not be 100%
| fraudulent, unlike the lovely subject of this posting.
| rberg wrote:
| > Nikola was building barely functional prototypes of their
| trucks years before Tesla was building barely functional
| Semi truck prototypes, for the record.
|
| If by "barely functional" you mean a metal skeleton on
| wheels that rolled down hills, then yes.
|
| I'm not a shill for Tesla as they definitely have made very
| questionable claims in the past, but to claim that Nikola's
| semi is in any way similar to Tesla is a bit of a stretch.
| itsoktocry wrote:
| > _but to claim that Nikola 's semi is in any way similar
| to Tesla is a bit of a stretch._
|
| Okay, how much of a stretch? If they would have stuck a
| nowhere-near-production ready battery and drivetrain
| system into the Nikola trucks and pretended it was
| complete, that would have been fine? That probably
| wouldn't have been difficult, but equally fraudulent.
| mcot2 wrote:
| This person is a troll. The Tesla semi is not "barely
| functional". They have been spotted driving all over the
| place and doing real world testing on actual highways and
| in cold weather. Production was already to be started
| except for a shortage of battery cells (due to the
| extreme popularity of their existing cars and
| powerwalls/megapacks) which they are working to remedy.
| itsoktocry wrote:
| > _This person is a troll._
|
| That's a baseless accusation, where are the mods?
|
| > _They have been spotted driving all over the place and
| doing real world testing on actual highways and in cold
| weather._
|
| Prototypes, with zero evidence they can achieve the
| claimed specifications. If you know otherwise, please,
| show us all. They are dependent on 4680 cells, which do
| not exist. They don't even have a factory, and they
| claimed the trucks would be ready for production 2 years
| ago. They will probably build something that works at
| some point in the future. Maybe Nikola could have as
| well? That is my point, where do you draw the line?
|
| Now, what about FSD? And the solar shingles that "print
| money" that were faked on the set of Desperate Housewives
| and don't exist to this day? You know, they ones that
| Tesla shareholders are currently suing for? The ones that
| Tesla employees claim were fake _in the deposition_ of
| said lawsuit? The ones you now buy are generic versions
| from China. What about the boring car tunnels; bit
| different from the old renderings, aren 't they?
| [deleted]
| borkyborkbork wrote:
| You have to be a troll if you are trying to convince
| people that a self propulsive vehicle, and an unpowered
| structure that can only move by being pushed or rolling
| down a hill are the same thing.
| [deleted]
| itsoktocry wrote:
| If you think the lawsuit is merely about rolling the
| truck down the hill, as opposed to lying to investors
| about their current tech, I'm not sure what to tell you.
|
| There is zero evidence Tesla has a semitruck that with
| the range the claim at the price they claim to be able to
| produce it.
| [deleted]
| [deleted]
| __m wrote:
| The Tesla truck is vaporware https://youtu.be/56862W24HK8
| tim333 wrote:
| The reservation page is up, they are talking delivery in
| 2022.
| itsoktocry wrote:
| Like they took delivery in 2019?
|
| And in 2022 it will be 2024. And you will continue to
| think that doesn't matter. If deadlines don't matter why
| can't Nikola claim the same thing? "It doesn't work yet,
| but it will?"
| [deleted]
| SV_BubbleTime wrote:
| > Weren't there VCs who put money into this?
|
| Definitely, but worse than that, real companies that really
| should have known better.
|
| GM associated themselves. For what reason I can't figure out.
| It must have been high up because the GM engineers I know all
| knew it was a 100% scam.
|
| It's like anything else that confuses me in business. Some
| idiot made a mistake, sure, but then their boss approved
| that, and all the other people required approved it, and at
| no point did anyone say "Hey, wait, no, stop".
| papito wrote:
| Welcome to broken Capitalism, when the incentives are ass-
| backwards. Juice quarterly returns, give yourself a massive
| tax-lite bonus, and walk away from ruins. Or better yet,
| get in on a con or a pyramid scheme. What's the worst that
| can happen? Jail? Please.
|
| It's just, this time the pyramid collapsed faster than it
| should have. Due diligence is for losers.
| yup00 wrote:
| I read an article, over a year ago now, that said the GM
| deal was nothing but upside for GM
|
| They got cash from Nikola whether they ended up
| manufacturing anything for them or not, and had to put up
| nothing up front.
| dasudasu wrote:
| Reputational hit from propping up literal fraud.
| Opportunity cost from not partnering with better
| companies in the space.
| yup00 wrote:
| GM's reputation is trash with anyone but patriotic
| "GM/Chevy" Americans already.
|
| So long as the public are willing to believe they're
| essential, they'll remain too big to fail and don't need
| to worry about their reputation.
| mcot2 wrote:
| One of the NKLA board members Steve Girsky was previously a
| Vice Chairmen at GM and likely facilitated this deal. I
| think it needs to be investigated further and Mary Barra
| should be forced to provide the evidence of due dilligence
| that GM collected during the closing of the deal.
| bell-cot wrote:
| What due diligence is reasonably required of GM, if the
| deal is obviously a win or wash for them, no matter what
| happens at NKLA?
| lazide wrote:
| Some analysis that they knew how scammy it was and
| proceeded because of an analysis it was worth it in other
| ways?
|
| If all there is, is a memo saying 'just buy it, and don't
| look too hard', or it looks like they fell for an obvious
| scam, then the execs can be on the hook for negligence to
| the shareholders
| H8crilA wrote:
| Just "Copying Tesla" is not a fraud by a mile, the whole
| point of capitalism is that enterprises compete by offering
| alternative solutions[1]. It is actually surprising it took
| so long for someone to copy the "electric car company with
| Tesla characteristics", given the insanely attractive cost of
| equity capital that Tesla is enjoying.
|
| Matt Levine wrote a section on this, about how Elon said
| good-bye to earnings calls since his funding is coming mostly
| from retail investors, to whom he speaks via Twitter and
| memes, they don't listen to the call anyhow so why bother :)
|
| https://www.bloomberg.com/opinion/articles/2021-07-27/matt-l.
| ..
|
| [1] Well unless (unless! unless!) it eventually turns out
| that Tesla is a fraud and you're copying that too.
| mcot2 wrote:
| Whatever you think of them, the Tesla fanboys have been
| proven more right then wrong and the likes of Matt Levine
| (and Bloomberg) are just bitter at this point.
|
| A lot of EV startups like NKLA are going to come and go but
| very few if any will be able to replicate Teslas success in
| the long term. Retail investors are not always stupid, many
| of the same Tesla investors have been shorting NKLA since
| it came on via a spac offering.
|
| Personally I don't always love everything Elon does but I
| view him in many ways as a modern day Edison. It's always
| funny to me to go back and read stuff said about Edison
| while he was alive. I very much color my view of Musk by
| historical perspective and try not to get lost in present
| day minutia.
| virgilp wrote:
| > Retail investors are not always stupid,
|
| Matt Levine wrote an article mocking them for buying
| Hertz stock, then a bit later another one saying "wait no
| that was actually a very smart thing".
| skystarman wrote:
| "Whatever you think of them, the Tesla fanboys have been
| proven more right then wrong"
|
| I'm not sure why that's interesting or important. The
| Tesla fanboys had no special insight into Tesla, Elon or
| anything. They are part of a cult of personality that
| bought the marketing hook, line, and sinker.
|
| Only about a year ago there were hundreds of Trevor
| Milton fanboys all over HN, Reddit and elsewhere just
| sure that Nikola was the next Tesla and anyone that
| didn't agree was just "bitter" or had no vision. Where
| are they now?
|
| There's no difference between either group of fanboys,
| really. Other than one got lucky and their cult leader
| delivered on some of his claims.
| ineedasername wrote:
| _and the likes of Matt Levine (and Bloomberg) are just
| bitter_
|
| Matt Levine has also struck me as more amused-- and
| perhaps confused-- than bitter about this.
| unyttigfjelltol wrote:
| Matt writes brilliantly on irrational, ridiculous, silly
| happenings in the world of finance. My guess is he's
| happy for a such a steady stream of subject matter.
| H8crilA wrote:
| He most definitely is :)
|
| BTW, you can subscribe to the email newsletter for Money
| Stuff, then you can access it without paying for a
| subscription to Bloomberg.
| mikestew wrote:
| My first thought when hearing of the company was the J. T.
| Marlin "brokerage" from the movie _Boiler Room_. And for
| those viewers that didn 't get the joke, the movie helpfully
| provides a scene where other brokers in a bar make fun of the
| uncanny resemblance to "J. P. Morgan".
|
| Bonus point for the ethical similarities between J. T. Marlin
| and Nikola.
| twelve40 wrote:
| This Nikola thing looks pretty weird indeed, but to be
| fair, Musk's name for his company is also not very
| original, since he (or whoever) also just took the dude's
| name even though he had absolutely nothing to do with him.
| lordnacho wrote:
| I thought Musk joined after it had been founded? Did he
| change the name?
| twelve40 wrote:
| "Tesla almost had a very different name--until Elon Musk
| and his co-founders bought the rights to "Tesla" for
| $75,000"
|
| https://fortune.com/2018/12/09/tesla-name-faraday-elon-
| musk/
| Sebguer wrote:
| No, Musk had literally nothing to do with the name, just
| a continuation of his myth as anything more than a guy
| with a lot of money.
| vlunkr wrote:
| Is it really a significant part of his myth that he named
| the company?
| [deleted]
| tim333 wrote:
| He started as a guy without money and got to briefly be
| the guy with the most money which is not so easy to do.
| ineedasername wrote:
| _a guy with a lot of money_
|
| Well, in the words of Batman when asked about his
| superpower, "I'm rich".
| sebzim4500 wrote:
| I think Bezos has demonstrated quite convincingly that
| simply having a lot of money does not mean you can
| compete with SpaceX. Similarly, I don't know much about
| the automotive industry, but turning a company with a few
| employees into one of the most valuable companies in the
| world is not easy, even if you have $100 million to play
| with at the start.
|
| It's OK to simultaneously believe that "Elon Musk is very
| effective at growing engineering businesses to the point
| that they disrupt entire industries" and also that "Elon
| Musk is not as smart as he thinks he is, and his tweets
| are embarrassing".
| [deleted]
| nonfamous wrote:
| Tesla is also an SI unit associated with electricity.
| Then again, are there any companies called "Ohm" or
| "Ampere"?
| [deleted]
| pacificmint wrote:
| Not the company name, but the Chevy Volt was sold as the
| Ampera in Europe.
| IlliOnato wrote:
| https://ampere.shop
| haneefmubarak wrote:
| There's a computing startup founded by ex-Intel folks
| named Ampere
| majormajor wrote:
| Tesla's name is somewhat original because the connection
| between electricty and Tesla is certainly obvious and
| understandable, yet also rare enough in the US compared
| to Edison that it wasn't already taken.
|
| A second company then copying exactly the same
| association? Different thing entirely.
| Sanzig wrote:
| It's also name for the SI unit of magnetic flux density,
| which fits with the electric motor theme.
| You-Are-Right wrote:
| Not original: https://www.tesla.cz/en/history/
| mcot2 wrote:
| Tesla invented the AC motor which was used in the first
| roadster so thats why they named it that. Very logical...
| myself248 wrote:
| And I remember around the time Tesla-the-car-company
| first emerged, rolling my eyes at the name. Like "Oh here
| we go, another EV startup using the guy's name without
| permission because his estate isn't set up to sue anyone
| who speaks it the way Edison's is. Best we can hope for
| is they do something cool and don't dishonor his legacy."
|
| There are times I'm glad to have misjudged someone.
| dannylandau wrote:
| Generally don't comment on sub-posts, but Boiler Room is a
| great movie! And very apropo to the current market
| stock/crypto craze going on right now.
| anyfactor wrote:
| I browse through a lot of niche investing social media groups.
| One of the more liked posts on a Nikola investment group was,
| "If "they" cared about the future, the earth and the renewable
| energy issue, they would let whatever Trevor did slide."
|
| Surprisingly, I saw similar posts about Musk on the Thailand
| rescuer tweet and the price too high tweet. You are not betting
| against the fundamentals or the realities of the stock, you are
| betting against these people.
| aiisjustanif wrote:
| You are still betting against the product those people are
| building. Their sentiment doesn't matter much when the
| product weak and company is committing fraud for personal
| gain or to bolster the promises of the product, like Thernos,
| most (not all of the time, by any means) of the time history
| has dealt with this.
| celticninja wrote:
| I think the poster meant the irrational investors, as
| opposed to the CEO/owner, when they used "they".
| kikokikokiko wrote:
| This is why this idiotic trend towards gender neutral
| pronouns is so... idiotic. 90% of the time when it's
| used, it's confusing and makes the information you're
| trying to convey harder to get. In this case the op
| wasn't even using gender neutral shenaningans, but since
| it's 2021 and it's becoming relatively ubiquitous, we get
| this kind of confusion.
| drdeca wrote:
| But if the two people have the same gender, why would
| using gendered pronouns make it less confusing?
|
| Sure, I guess it is less ambiguous on average..
|
| Hm.
| lovemenot wrote:
| It'll get easier the longer it persists. Just be patient.
|
| Heck, Japanese very rarely need a pronoun at all, yet
| they can somehow infer meaning just fine.
| fossuser wrote:
| Something can be true in one case and not true in another.
|
| Nikola looked like fraud from the start (no Silicon Valley
| funds invested iirc - money came from Detroit).
|
| Elon Musk is obviously different.
| xkjkls wrote:
| Why do you think Elon Musk is obviously different? He's
| definitely had many events where he has lied about aspects
| of his business. You could argue that it doesn't matter now
| that he has built something real, but that's down to a lot
| of luck, not ethical backbone.
| electriclove wrote:
| Musk has built many things over the past Many years.
| Though he may talk about even more, bringing EVs to the
| masses and creating reusable rockets is something he
| deserves full credit for. It has nothing to do with
| ethics. A rational person would not equate Musk with
| Milton.
| xkjkls wrote:
| Not equate, realize that they are both part of a pattern.
|
| We also should not let Elon Musk's actions only be
| evaluated in their totality. We can argue about the net
| sum of his contributions, but it should be fundamentally
| irrelevant to evaluating any individual one. He shouldn't
| lie or allow fraud. His actions with the Solar Roof
| launch, Boring Company, Self Driving, and funding tweets
| all cross ethical lines that we as a country need to make
| clear are not what we want from our business leaders.
| zeusk wrote:
| Silicon Valley is choke full of fraud and absurd
| valuations.
| fossuser wrote:
| When you look at the actual fraud (like Theranos) silicon
| valley funds are nowhere near it. The people that get
| duped are usually outsiders that are more easily
| manipulated.
|
| It can be hard to tell the difference between big ideas
| and bullshit, they can often sound similar. Con-artists
| will mimic the people that actually know their shit.
|
| In order to tell the difference you need to actually look
| at the underlying tech for yourself.
| rvz wrote:
| > Con-artists will mimic the people that actually know
| their shit.
|
| Ah yes. A certain billionaire promises robo-taxis and
| full Level 5 autonomy by 2020, and then in 2021, admits
| self-driving is hard as FSD is still Level 2, after
| duping their own customers on buying ahead of their
| 'promises'.
|
| This billionaire in 2019, surely knew what he was talking
| about. /s
|
| > In order to tell the difference you need to actually
| look at the underlying tech for yourself.
|
| Like the deceptive advertisement of FSD (Full Self
| Driving) auto-pilot software in Tesla cars that has
| tricked many Tesla drivers into paying for a product that
| not only doesn't work as advertised, but puts the safety
| of drivers and others at risk.
|
| The worst part is that they continue to market it
| regardless of the missed deadlines, the safety risks and
| the fact that the software is still _' safe'_ for usage,
| which that is complete bullshit.
|
| The FSD feature in Tesla cars (along side the robotaxis)
| was deceptively advertised as _' safe'_ and promised as
| _' Level 5'_ with lots of customers buying into it; and
| some have lost their lives over the software getting
| confused. If FSD is not regarded as 'actual fraud' or
| 'deceptively advertised', then I don't know what is.
| fossuser wrote:
| FSD was advertised as paying for something that would
| come in the future - I bought it under that assumption
| (and so did everyone I know that has it). That was and
| remains true.
|
| They've continued to make progress towards it:
| https://www.youtube.com/watch?v=g6bOwQdCJrc
|
| Autopilot is different and isn't advertised as level 5 -
| 'autopilot' implies fancy lane keeping not turn by turn
| point to point autonomy.
|
| Elon's FSD timelines were wrong - that isn't fraud.
| People say everything he's trying to do won't work
| constantly, just because they're occasionally right
| doesn't validate all of the times they're wrong (e.g.
| Model 3 is vaporware will never ship, the company is
| bankrupt and will close in two weeks, the Model S will
| never ship, gigafactory is a mistake, roadster means Musk
| only cares about EVs for the rich etc. etc.)
|
| If you can't tell the difference between Elon Musk and
| the success of Tesla and SpaceX or think it's equivalent
| to something like Theranos or Nikola I'm not sure what to
| say about that, there's just not much point in further
| discussion. Your pejorative use of billionaire also
| suggests some political element.
| Robotbeat wrote:
| I think Trevor was counting on people not being able to
| tell the difference. They named their Tesla-competing
| company "Nikola," which is a bit astounding when you
| think of it.
| fossuser wrote:
| And Elizabeth Holmes wore black turtle necks - subtlety
| is not what they're usually going for.
|
| Trevor does have some 30+ million dollar ranch in Utah
| though so I guess he did a better job of it.
|
| In Holmes case I genuinely think it didn't start as a
| fraud, but became one when they started lying. Not sure
| about Nikola.
| rvz wrote:
| > FSD was advertised as paying for something that would
| come in the future
|
| So the software that is called 'FSD' (Full Self Driving)
| doesn't actually mean what is says or was advertised
| then? You're telling me that it doesn't mean _' Full Self
| Driving'_ or what was meant to be _' full Level 5
| autonomy'_ which that was advertised for completion in
| 2019 and 2020? [0]
|
| We are in 2021. Where are the robotaxis then? [0]
|
| > If you can't tell the difference between...
|
| Irrelevant. Stay on point. I have _only_ criticized Tesla
| 's deceptive advertising of FSD where that poses a great
| safety risk of life to both the driver of the car and
| other drivers on the road. No where did I mention
| anything generally about Tesla, SpaceX or anything else
| since the last sentence you said was completely
| irrelevant.
|
| FSD does not work as advertised neither it is reliable to
| be used on the road and it puts the safety of the Tesla
| driver and others drivers at risk, even especially as it
| is beta software. I would not use such software in a car
| that confuses the moon as a yellow traffic light. [1]
|
| > Your pejorative use of billionaire also suggests some
| political element. ?
|
| So both Elon Musk or Trevor Milton are not billionaires?
| So I am not allowed to say they are billionaires? What
| wrong with that? It is a fact, not _' some political
| element'._
|
| I don't always listen to everything that they say whether
| if it is Milton or Musk.
|
| [0] https://www.motortrend.com/news/tesla-autonomous-
| driving-lev...
|
| [1] https://twitter.com/JordanTeslaTech/status/1418413307
| 8625853...
| puchatek wrote:
| > So both Elon Musk or Trevor Milton are not
| billionaires? So I am not allowed to say they are
| billionaires? What wrong with that? It is a fact, not
| 'some political element'.
|
| You're telling others to stay on point yet your pointing
| out that Musk and Milton are billionaires is just as much
| beside the point.
| fossuser wrote:
| > So the software that is called 'FSD' (Full Self
| Driving) doesn't actually mean what is says or was
| advertised then?
|
| There is no FSD today the capability you're paying for is
| a future update, it used to be entirely that - now they
| include some extra features under FSD that aren't in base
| autopilot (lane changes, etc.).
|
| They've always been pretty explicit about this - the
| language on the site today reads:
|
| > The currently enabled features require active driver
| supervision and do not make the vehicle autonomous. The
| activation and use of these features are dependent on
| achieving reliability far in excess of human drivers as
| demonstrated by billions of miles of experience, as well
| as regulatory approval, which may take longer in some
| jurisdictions. As these self-driving features evolve,
| your car will be continuously upgraded through over-the-
| air software updates.
|
| They've also shipped more features toward this goal over
| time which is what they said they'd do (including a free
| hardware update if you had paid ahead for FSD).
|
| > We are in 2021. Where are the robotaxis then? [0]
|
| I already conceded he was wrong about timelines.
|
| > Irrelevant. Stay on point.
|
| Not irrelevant - this is the comparison we're talking
| about the nature of the difference between Trevor Milton
| and Elon Musk. If you ignore contradictory evidence
| because it doesn't support your position that's just
| cherry picking.
|
| > So I am not allowed to say they are billionaires?
|
| >> Ah yes. A certain billionaire promises...
|
| >> This billionaire in 2019, surely...
|
| Do the above quotes sound like some neutral descriptor to
| you?
| rvz wrote:
| > Not irrelevant - this is the comparison we're talking
| about the nature of the difference between Trevor Milton
| and Elon Musk. If you ignore contradictory evidence
| because it doesn't support your position that's just
| cherry picking.
|
| What difference? Unless of course, the case of Tesla's
| deceptive advertising of its beta FSD system putting the
| lives of drivers at risk and killing them or others [0]
| is 'far more serious' than Nikola's deceptive advertising
| of their whole business. Then yes, I agree on that
| difference and both must be under very close
| investigation by the regulators.
|
| More specifically, I'm sure you should also realize that
| I was criticizing both of them from the start and not _'
| cherry picking'_ or siding with any company or person,
| unlike you mentioning Musk's other companies which that
| is completely irrelevant.
|
| > They've also shipped more features toward this goal
| over time which is what they said they'd do.
|
| Despite this, it is still unreliable [1] and the safety
| risks still stands, even when the driver is behind the
| wheel and is attentive of what is in front of them.
|
| Highlighting these risks is extremely important such that
| it is the difference between life or death and it can be
| from a malfunction in the software that controls the car.
|
| > Do the above quotes sound like some neutral descriptor
| to you?
|
| Excuse me?
|
| It is an objective fact. Isn't it? [2] [3] Why do you
| feel offended of this fact? I'm sure the customers will
| listen to them because they think they know what they are
| talking about? Don't they?
|
| >>> Con-artists will mimic the people that actually know
| their shit. [4]
|
| Remember this?
|
| [0] https://www.nytimes.com/2021/07/05/business/tesla-
| autopilot-...
|
| [1] https://twitter.com/JordanTeslaTech/status/1418413307
| 8625853...
|
| [2] https://en.wikipedia.org/wiki/Elon_Musk
|
| [3] https://en.wikipedia.org/wiki/Trevor_Milton
|
| [4] https://news.ycombinator.com/item?id=27999706
| jdminhbg wrote:
| I'm not sure creating a multibillion dollar vaporware fraud
| shell company and being a dick on Twitter are comparable
| sins.
| xkjkls wrote:
| I'm not sure you are following the Elon-Solar City case if
| you think Elon's only sin is being a dick on Twitter. Or
| the original $420 funding a share saga.
|
| Elon Musk's repeated fake-it-till-you-make-it behavior and
| the unwillingness of regulators to crack down on it spawns
| Trevor Miltons.
| slownews45 wrote:
| The SEC did enforce against tesla - when Elon tweeted
| "Tesla's stock price is too high imo" - they began an
| investigation and subpoenaed records because they felt
| this this had not been approved by attorneys (it wasn't -
| elon claimed it was his personal opinion). So they went
| after him for this.
|
| They also went after him for a lot of other stuff.
|
| Note that they haven't gone after folks for failure to
| deliver issues on sales which is usually caused by
| shorting stocks such as Tesla's and others. Even though
| you'd think the basics of a regulated market is that
| folks selling shares actually own and will deliver them
| if someone buys them.
| xkjkls wrote:
| > They also went after him for a lot of other stuff.
|
| Like lying about a buyout offer for his company. Which he
| received a incredibly small punishment for.
| TheParkShark wrote:
| Are you sure he was lying?
| xkjkls wrote:
| I mean, similarly to my certainty Donald Trump was lying
| that his taxes are under audit, and thats why he can't
| release them. Do I have exact knowledge of Elon's head
| state, no, but I can make inferences from all his actions
| since. If a buyer truly existed to facilitate that
| transaction, that would be public knowledge at this
| point.
| kraig wrote:
| Call me pessimistic, but my thoughts on the matter is
| that TSLA and by association Musk have become too big to
| fail. Anything that would take Musk down would harm a lot
| of very wealthy investors.
| slownews45 wrote:
| As you are probably aware, buyout offers are routinely
| front run on the street by insiders. Ie, folks in the
| know get in early and book nice gains. So some folks
| actually liked hearing direct from CEO on what they were
| thinking. His twitter post was clear, he was
| "considering" taking TSLA private.
|
| His blog post on the rationale for his potential move is
| here: https://www.tesla.com/blog/taking-tesla-private
|
| Anyone who bought in at this news would have been buying
| in for < $84 per share (split adjusted). Current stock
| price is 600 per share+.
|
| The problem the SEC has had in trying to charge him is
| that folks feel like the SEC really ignore some of the
| clear scam behavior by big players. Fail to deliver? No
| issue. Broker bad behavior and theft? Light FINRA slaps
| on the wrist. Complaints about Madoff? Investigate the
| complainers. CEO talking about potential to take a
| company private publically - all out WAR by SEC!
|
| He said he is considering something. It was not definite.
| Stock price didn't jump to the "buyout" price the way it
| normally would on a real buyout.
|
| Yes - people want to make this into a huge crime. But he
| explained in his tweets pretty transparently to most what
| his thinking was.
|
| And they did go after him for this and everything else.
| Hey says Stock price too high in his opinion - BAM - they
| were on him.
| djmips wrote:
| This has been going on since time immemorial. A part of
| me thinks it's a necessary evil in a world where people
| won't fund revolutionary ideas. However, that also means
| Milton and Holmes etc.
| xkjkls wrote:
| I would agree that fraud is always going to happen; how
| much though is up for debate, and I would tend to argue
| that more fraud makes the world worse at funding
| revolutionary ideas. More revolutionary ideas happen and
| get funded in the US, which while I believe has become
| rife with fraud over the past decade, is no where near
| the scale the number of frauds in China or Africa or less
| well monitored markets.
|
| Trust is fundamental part of markets and is basically its
| own interest rate. The more people can trust one another,
| the riskier investments people are willing to partake in.
| MrPatan wrote:
| The sin is the same: Being successful when I'm not. Off
| with their heads!
| Cederfjard wrote:
| You know the thread your posting this in is about one of
| them being indicted for fraud, right?
| ashtonkem wrote:
| I've learned to cast a more cynical eye towards companies
| claiming to be accomplishing grand, ethical aims. Sometimes
| they're right, of course, but it's also a _phenomenal_ way to
| sweep abuse and fraud under a rug.
| xkjkls wrote:
| It's part of the fraud triangle studied in most business
| schools:
|
| "The fraud triangle is a framework commonly used in
| auditing to explain the reason behind an individual's
| decision to commit fraud. The fraud triangle outlines three
| components that contribute to increasing the risk of fraud:
| (1) opportunity, (2) incentive, and (3) rationalization."
|
| https://corporatefinanceinstitute.com/resources/knowledge/a
| c...
|
| Companies that are "saving the world" are rife with people
| willing to rationalize their behavior. That's why it is
| imperative they are scrutinized properly so that the other
| elements don't also become rampant. We've failed completely
| with that on the latest wave of greentech companies.
| yumraj wrote:
| > I've learned to cast a more cynical eye towards companies
| claiming to be accomplishing grand, ethical aims.
|
| People have stopped talking about Google's famed "Don't be
| Evil" thing.. But hey, it served a purpose for Google when
| it mattered.
| lmilcin wrote:
| It is really depressing that honor and integrity means
| nothing.
|
| Do whatever you want and while claiming the opposite. If
| it blows up, hire a specialized PR company and pretend
| nothing happened.
| cmiller1 wrote:
| "...villains who twirl their moustaches are easy to spot.
| Those who clothe themselves in good deeds are well
| camouflaged." -- Captain Jean-Luc Picard
| belter wrote:
| At 5 min and 57 sec... https://youtu.be/AJUIaVuqpUs?t=357
|
| Is this whole shebang very different from Tesla FSD claims?
| yup00 wrote:
| Financial markets are not coupled to real economics anymore.
|
| They're coupled to speculative gamesmanship. Whoever can
| generate statistics to captivate the masses who do not
| understand them, via press releases, and media blitzes.
|
| That sounds cynical, but I "hob nob" with people invited to
| Davos, and run depts at Ivy League schools.
|
| Behind closed doors these are the conversations I've been privy
| too. How to captivate the "market" which is a euphemism created
| years ago to replace the religious concept of "flock".
|
| Mirror neurons really challenge the correctness of any wisdom
| to come from business leaders. It's a pantomime, ingratiate
| ourselves before the socially rich
|
| People see taxation as theft of property. I see it as reminding
| people there are no Gods or kings.
| thrwyoilarticle wrote:
| Anymore? Keynes said this in 1936.
| aeternum wrote:
| Marketing matters a lot, and NKLA was quite popular or even
| infamous there. A known brand does have value, even according
| to 'real economics'.
|
| Most investors seem to have been valuing that aspect and
| completely discounting the engineering/tech.
| yup00 wrote:
| It helps me to think in terms of particles and waves.
|
| A person is a particle and their influence is a wave.
|
| I'm not so sure light is both, but our cognition enables
| seeing it as both.
|
| Mirror neurons fire when we engage a behavior or see it
| performed.
|
| Our culture is built upon a meme repeating protectionist
| like chants for the rich, deflation for the middle class,
| and stagnation of the poor.
|
| Repeat, fire mirror neurons.
|
| It's not perfect mind control though cause once you know
| how the sausage is made, why give that particle (rich
| person) reverence?
| morpheos137 wrote:
| Yeah it is all bullshit all the time these days. Spoken as an
| "elightened" but not Illuminated one. This is not a left vs.
| right issue. It is a 99.9% vs 0.1% issue. Sadly most of the
| 99.9% actually deserve what's coming in the future struggle
| for resources because they would rather accept what is fed to
| them and be led like lambs to where ever than actually think
| critically about the world. Most of those that "get it" are
| not interested in helping the masses and the masses don't
| want to be helped anyway. Next couple decades may be
| interesting times.
| _game_of_life wrote:
| I don't know about mirror neurons personally, but the cult-
| like behaviour, evangelism, and buzz words in business has
| been easily observable for decades.
|
| Now you go into subreddits like /r/superstonk, bitcoin, GME,
| Dogecoin, etc. And the cultish religiosity is palpable in
| these echo chambers too.
|
| So I'm not really surprised by this, if what you've shared is
| true.
| pvarangot wrote:
| I'm usually a very negative person but another side of the
| coin here is that if you were good at this "speculative
| generation of statics to captivate" the best way to raise
| money was "gaming" big capital. With the risk profile of
| retail investors changing and more risky ways to trade on
| public markets becoming accepted comes a positive aspect of
| the naturalization of highly speculative single picks on the
| stock market, it's easier for more people to raise a lot of
| money for risky endeavors.
|
| If it's going to be good or bad for society I don't know.
|
| I personally have most of my money on low risk stuff, and
| when volatility spikes I sometimes sell options in the
| morning before starting my day.
| xkjkls wrote:
| > it's easier for more people to raise a lot of money for
| risky endeavors.
|
| Is it easier to raise money for risky endeavors or for
| "hot" endeavors. I'm not sure this no structure to how a
| lot of people are now allocating capital is actually
| contributing anything positive, just pure malinvestment.
|
| AMC is a perfect example. It's a company that raised
| hundreds of millions at valuations 10x of what it had
| months ago. Is AMC a "risky investment" we should be
| allocating capital too? Box office receipts and still down
| 50% and may never fully recover. Why is AMC a good use of
| that capital rather than institutions that can replace it
| completely?
| SmellTheGlove wrote:
| It sounds like your cult is Theta Gang then! Seriously
| though that seems to be what the quiet crowd is doing -
| taking advantage of the premiums caused by the general
| crazy that permeates the market. I don't know enough to
| sell options but I keep meaning to read up.
| JamesSwift wrote:
| Check out TastyTrade for a plethora of free education on
| options in general, but especially selling options.
| zeusk wrote:
| When your RSU and ESPP vest, open your brokerage and try
| selling a single 20-30% out of the money call that
| expires in a month.
|
| You can read about it, but actually doing it is not that
| hard. Although, given the inflated stock prices and US
| equity options being 100 sized lot - you do have to keep
| an eye to roll it out if market is getting really
| exuberant.
| fshbbdssbbgdd wrote:
| Warning that a lot of companies have a trading policy
| that forbids employees from investing in options or any
| kind of derivative on their own stock. You might be
| allowed to make options trades on other companies in the
| sector (not legal advice).
| zeusk wrote:
| I've only ever heard of this in the financial sector
| (even then, they can create trading plans for trades in
| future).
|
| But yeah sure, I am not a lawyer or a fiduciary and this
| is not legal or fiduciary financial advise.
| fshbbdssbbgdd wrote:
| My last few big tech employers have had a policy
| forbidding me from trading in options or derivatives on
| the stock, as a lowly software engineer.
| zeusk wrote:
| Care to share? From my knowledge, Google and Microsoft
| have no such restrictions.
| ibarea23 wrote:
| The problem is that one of the incentives to do hard things
| under capitalism is wealth, and if things get too scammy
| you can get wealthy without actually building the thing. So
| while it is remarkably easy to raise capital right now, you
| also need a set of people who have clear positive
| intentions and want to build things raising that money.
| skystarman wrote:
| You're mostly right but I don't see anything going on in the
| markets today as much different than how it has fundamentally
| operated over the past century or so.
|
| Hell, much of the same "speculative gamesmanship" was going
| on in the tech bubble of the late 90s. Just completely
| irrational valuations detached from reality. We ended up in a
| big correction.
|
| As Benjamin Graham said several decades ago and Warren
| Buffett Repeats constantly "over the short-term the market is
| a voting machine, over the long-term it's a weighing machine"
| kazinator wrote:
| What is the time reference for "anymore"?
|
| Was the 1920's stock bubble and 1929 crash just following
| fundamentals the whole time?
| wetpaws wrote:
| Theranos indictment when
| IfOnlyYouKnew wrote:
| Three years ago?
| https://en.wikipedia.org/wiki/Elizabeth_Holmes#Criminal_char...
| bornelsewhere wrote:
| Nikola is one of Crystal lang largest sponsors[0]. I wonder if
| this is going to have repercussions. It's no fault of the Crystal
| community but might cast a shadow nevertheless.
|
| [0] https://crystal-lang.org/sponsors/
| rvz wrote:
| I see Mozilla always complaining about privacy matters and
| violations of its largest partner, critiquing the very hand
| that feeds them and they still take in the money that keeps
| them alive and accounts for 80% of their entire revenues YoY.
|
| That partner is Google, the anti-privacy company that stands
| against what Mozilla is fighting for and supporting (and also
| funds many other open-source projects). Nothing has happened or
| changed and zero repercussions for Google's actions. The same
| for Crystal.
|
| I do not think you will find any clean hands in the tech
| industry and everyone knows it.
| fastball wrote:
| Using fraud to support interesting open source work - I'm kinda
| conflicted.
| lvl100 wrote:
| How is this any different from what Elon Musk told his investors
| for the past decade?
| millerm wrote:
| I was wondering how soon someone would try to trash Tesla (or
| Elon) as it's completely off-topic and a false equivalence.
|
| I see a lot of Teslas on the road, as I also drive one.
|
| I see a lot of Superchargers around, and see (yup, I trust it)
| a lot of people around the world using them.
|
| I see a lot of Powerwalls getting sold and installed.
|
| I see huge Megapacks getting sold and installed.
|
| I see a lot of solar being sold and installed.
|
| I see manufacturing plants being built around the world.
|
| I see that Panasonic is selling Tesla millions upon millions of
| battery cells, so they must be going somewhere.
|
| I saw their earnings report for Q2 2021 and it sure seems like
| they are doing very well.
|
| I see they have massive data and super computing power,
| currently being used and being built.
|
| I see there are 70k+ people working for and getting paid to
| work for Tesla.
|
| Oh, FSD is late. We've all underestimated our projects. So,
| this is the equivalency you're looking for? I see betas of FSD
| in cars on the road. I know people that are actively testing
| it. It's a hard problem, not a lie. It's just someone being
| overly optimistic, not overtly optimistic. I'm an investor, I
| understand the problem because I know what I invest in. I am
| not angry nor do I believe it to be a lie.
| 6gvONxR4sf7o wrote:
| I don't think the lies are of the same type. Lying (or
| charitably, being unreasonably optimistic) about future
| timelines seems less egregious than faking a demo.
| lvl100 wrote:
| In Tesla's case, bigger the lie more they believed.
| shapefrog wrote:
| I thought Elon was the Electric car maker most likely to get
| caught perpetuating a fraud?
| beeboop wrote:
| I'm amazed at the lengths people go to bring Elon in on
| discussions. Can we get Elon Derangement Syndrome in the DSM?
| chrisbolt wrote:
| You think there's a big leap from Nikola -> Tesla -> Elon?
| phekunde wrote:
| Looked at the first name, not look at the last name too!
| IlliOnato wrote:
| Nikola looked like a fairly obvious scam to me the first time
| I've read about them. I find it surprising and strange that they
| were able to hoodwink so many people.
| BlissWaves wrote:
| You'd be suprised how many idiots there are.
| superfunny wrote:
| It sounds a lot like Elizabeth Holmes and Theranos - some
| investors want to find the next Steve Jobs so badly that they
| get blinded by the sophistry.
| [deleted]
| runbathtime wrote:
| How do they define fraud? Lying? Isn't every company doing this?
| BlissWaves wrote:
| Some employee gets fired because they misled in their resume
| and that's fine but when companies do it it's just marketing
| and raising hype.
| TameAntelope wrote:
| Importantly, every _public_ company is not doing this.
|
| Were it a private company, like most startups at this stage
| tend to be, these lies would not have been securities fraud, I
| don't think.
|
| IMO this would have been a negative case of misrepresentation
| were this a private startup, but probably not more than a
| single standard deviation away from the norm, at least in my
| admittedly fairly limited understanding of the industry.
|
| When you're from a culture of, well, presenting the best
| version of the truth possible (startup world), you can get into
| some very hot water if you play fast and loose as a publicly
| traded company, and Trevor Milton is finding out.
| qeternity wrote:
| > Were it a private company, like most startups at this stage
| tend to be, these lies would not have been securities fraud,
| I don't think.
|
| _Theranos has entered the chat_
|
| Private placements are still securities.
| runbathtime wrote:
| That is exactly what I was thinking.
|
| Elizabeth Holmes.
|
| I think even if you are a private company, lying is still a
| type of fraud. And private companies still have
| shareholders. Just because they are not public companies
| doesn't mean they can just lie to their shareholders,
| although perhaps it is more difficult to prove?
|
| The only area that I can think of where you can get away
| with lying about an industry or asset is when it comes to
| crypto. You can make sky high predictions and because they
| aren't labeled as securities there is no victim. Because
| they use the word decentralized there is no one
| responsible.
| vmception wrote:
| > Last September, Hindenburg Research said in a paper that it was
| short-selling Nikola stock and labelled the company a "fraud", a
| charge it denied.
|
| Shorts win! Thanks for the market function
| qeternity wrote:
| And yet, the number of people who think shorts are somehow evil
| (another EV CEO comes to mind) is absolutely mind boggling.
| I've heard relatively intelligent people explain to me that
| shorting should be illegal.
| Invictus0 wrote:
| If you haven't seen the Hindenburg report, I recommend reading it
| for the comedic value: https://hindenburgresearch.com/nikola/
|
| Notable laughs:
|
| * Nikola rolled their semi truck down a hill to show that it
| worked
|
| * Trevor appointed his brother Travis "Director of Hydrogen
| Production/Infrastructure" when his only experience was pouring
| concrete driveways
|
| * The infamous "HTML5 supercomputer" comment:
| https://www.youtube.com/watch?v=zPL-PbDUKrM
| typon wrote:
| This company was an obvious scam from the beginning...the EV
| hype brought on by Tesla swept up so many naive people. Some of
| my family invested in this stock and lost a lot of money.
| ajross wrote:
| I think that's very much a hindsight kind of thing. I mean,
| yes, Nikola was a scam. But in "the beginning" the only
| people willing to say that it was a scam were ones who
| sounded exactly like the much louder, better funded, and
| media-accessible people screaming that _Tesla_ was a scam.
| This very site was filled with $TSLAQ nonsense. And it was
| all wrong, much of it deliberately so.
|
| The investment world is drowning in deliberate
| misinformation. There's no path for reasoned criticism to
| break through. Pick any stock and there's _someone_ willing
| to tell you it 's a scam. Or a gem.
|
| _Edit: and this subthread is a perfect, shining example.
| Just look at all the people jumping in to perpetuate and
| argument that somehow Tesla is, I guess, comparably
| fraudulent to Nikola, a company that got caught faking a
| vehicle that didn 't exist. No one trusts you people, because
| you sound the same for everything._
| cma wrote:
| https://www.cnbc.com/2020/11/03/musk-tesla-was-about-a-
| month...
|
| Tesla almost went bankrupt. They started shutting stores
| that were tied into commercial leases that hadn't expired
| and all kinds of stuff. At one point they said they would
| never need to capital raise again and then did one 3 days
| later or something. They made wild statements of autonomous
| taxis by the end of 2020 in a desperate bid to build hype
| before the capital raise.
|
| They survived and raised a lot of capital from shareholders
| and now seem in no danger of bankruptcy, but it was either
| a real threat or the CEO is lying about it to be
| theatrical.
| hef19898 wrote:
| In all fairness there was a non-zero chance of Tesla
| running out of money at one point. At the final word on
| Tesla being worth what it is hasn't been spoken neither. I
| do have to give Musk credit for being able to maintain
| Tesla the way he does, under everyone else the company
| wouldn't exist anymore. Not that I think Tesla is
| particularly well run so, but Elon's ability to entertain
| the market and keep money flowing is impressive.
| nickik wrote:
| While it is true that Tesla might have gone bankrupt.
| There is a big difference between 'this is a risk company
| with growth potential, be careful' and 'this company is
| fraud'.
|
| Many TSLAQ people were far more extreme then saying 'they
| could go bankrupt, car industry is risky.
|
| > Not that I think Tesla is particularly well run so, but
| Elon's ability to entertain the market and keep money
| flowing is impressive.
|
| The haven't really need to raise that much money in a
| long time. They did some raises in the last couple years
| but that money is mostly in the cash balance now.
|
| Its not like they are just raising more cash all the
| time.
| Aperocky wrote:
| The ability to run pump and dumps in crypto with impunity
| definitely helps.
| nickik wrote:
| No it doesn't. Stop claiming this nonsense. It is totally
| irrelevant for Tesla financials.
| RC_ITR wrote:
| Hey, you're not going to like hearing this, and feel free
| to ignore, but $TSLA is c. 20% below it's peak valuation
| and still is trading at 100x earnings on pretty mediocre
| growth.
|
| It's still wildly overvalued, people don't talk about it as
| much though since the price is flat, not up. Be careful of
| confirmation bias.
| jquery wrote:
| I think you just proved his point. NKLA was an outright
| scam, and Tesla wasn't, but the way many people talked
| about Tesla was as if it was a scam selling vapor ware.
| It took a very keen eye indeed to tease out fact from
| fiction. Tesla may have "mediocre growth" as you claim (I
| strongly disagree) but the number of Tesla cars I see on
| the road are a testament that the company is no scam.
| Pyramus wrote:
| Interested how you define 'scam'. Would you say Wirecard
| was a scam (their payments network is still in use
| today), or Enron?
|
| My point is that the fact a company is producing a
| product does not necessarily disqualify them from being a
| 'scam'.
| habitue wrote:
| A scam can't be defined by the mere legal definition of
| fraud. A true scam is all about the _feeling_ of people
| on the internet.
|
| Somehow people always forget that.
| marvin wrote:
| Not sure I'd classify 100% year-on-year growth to
| revenues of $12 billion as mediocre, during a year when
| the production lines of two of their three cars were shut
| down for almost an entire quarter and we also went
| through the worst pandemic since 1918.
|
| The valuation is still steep by earnings and compared to
| likely competitors, but it's not based on speculation
| devoid of observations.
| cma wrote:
| Tesla also reopened their Freemont plant within days
| against health department orders saying they were
| producing ventilators and then delivering expired bipap
| machines bought in bulk while really working on luxury
| cars. The pandemic didn't slow them much because they
| just violated the orders.
| ajross wrote:
| Tesla wasn't faking videos by rolling a nonfunctional
| truck down a hill. They're shipping almost a million cars
| a year now (looks to be like 850k in 2021 I think). Mine
| took me to Yellowstone a few weeks back.
|
| Now, sure, "overvalued" is a very reasonable argument.
| I'd even agree.
|
| That's not the kind of rhetoric that was deployed against
| the company and you know it. Which is why people didn't
| believe folks screaming that Nikola was a scam.
| sethd wrote:
| They had a video on their website for years (taken down
| very recently, I believe) that showed a FSD "self-
| driving" Tesla with the narrator saying something like
| "the driver is only present for legal reasons".
| ajross wrote:
| _And again_ , people see arguments like this attempting
| to liken Tesla to a clearly fraudulent scam (the truck
| didn't even go!), and is it any wonder they threw up
| their hands and figured NKLA was a good bet?
|
| Look, nitpick about FSD if you like (I bought it, FWIW --
| 100% happy customer). But don't claim it's the same as
| faking a motor in a truck that didn't have one.
| jfb wrote:
| Right, these are very different things. I am very bearish
| on Tesla, but they are _shipping cars_!
| ansible wrote:
| After reading about quality issues for years and years
| about Teslas, I'm not rushing to buy one any time soon.
| Though I know many owners really love their cars. I see
| more than a few every commute to work.
| cycomanic wrote:
| Well but Tesla is still calling their drive assist
| autopilot and Musk has at multiple times in the past said
| full independent driving is just around the corner and
| all these "around the corner" dates have past and there
| still is not fully independent autopilot.
|
| So yes there is a difference in scale, but not in
| principle I would say. Musk is also lying (I don't
| believe that by now he still believes we will have
| unassisted autopilot next year) to keep the stock price
| high.
| ansible wrote:
| So, full autonomous is... very hard. It is easy to get
| most of the way there, and then think you're nearly ready
| to ship a product.
|
| Staying on the road, obeying traffic laws, not hitting
| other cars, this is just the beginning. There are so many
| oddball situations you see when driving that an
| autonomous system also has to handle.
|
| One of the big ones is construction, and that alone
| brings a whole host of issues including wacky lane
| changes, following the direction of human workers,
| missing or misleading lane markings, debris, and more.
| biaachmonkie wrote:
| What is wrong with calling it AutoPilot? What does
| AutoPilot do in a plane ?? it keeps speed, direction and
| altitude. It doesn't do anything magical, it doesn't
| replace an actual Pilot and fully navigate the plane from
| Gate to Gate and hit on the stewardesses as well.
|
| Telsa has always separated AutoPilot and Full Self
| Driving as separate features. "But people confuse
| AutoPilot and think is does everything and is a virtual
| chauffeur", Well those people are stupid, stupid like the
| people who try to trick the car into driving and fake out
| the driver attention safety features.
| lesuorac wrote:
| It looks like share price was ~10$ at the start (2018 to
| 2020) and is currently ~13$ so presumable your family could
| cash out right now for a 30% profit.
| vitaliyf wrote:
| $10 was the SPAC before they merged to become NKLA. The
| merger was announced in March 2020 (when the price jumped
| to low teens) and completed in June (when the hype made it
| go up to $60s).
| dawnerd wrote:
| I invested too, doesn't mean it was necessarily a bad
| investment. You gotta take risks if you want to get in early
| on potential huge gains. Luckily I didn't put too much in.
| Let that be a lesson to anyone, don't invest into speculative
| companies unless you're willing to lose it all.
| engineer_22 wrote:
| don't conflate investment and speculation
| dawnerd wrote:
| It's all the same. Investment firms all the time throwing
| money at speculation. It's all about what your risk
| tolerance is.
| squarefoot wrote:
| The company name alone should have been a hint that they were
| building on Tesla's hype.
|
| https://en.wikipedia.org/wiki/Nikola_Tesla
| bluetwo wrote:
| Exactly. First rule is making a fraud is to associate it
| with something credible.
| Hypocritelefty wrote:
| But FSD doesn't work downhill as well yet space jesus is free.
| rvz wrote:
| It's great to unveil such 'scams' and have investigations like
| this for everyone to see. I'm glad I shorted them before all of
| this. So we'll see what happens next.
|
| Now the next great scam we all want answers for and we need to
| talk about is that misleading contraption called FSD.
| yashap wrote:
| Wow, thanks for sharing, I'd never seen this before:
|
| > "The entire infotainment system is a HTML 5 super computer,"
| Milton said. "That's the standard language for computer
| programmers around the world, so using it let's us build our
| own chips. And HTML 5 is very secure. 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."
|
| The founder of an apparently very technically challenging
| company speaking like that should have been an instant red
| flag, that's absolute nonsense.
| qeternity wrote:
| It's not even so much his poor understanding of the
| underlying infotainment tech. I wouldn't expect him to know
| the architecture. A good CEO would be fine delegating that.
|
| What speaks volumes is that he clearly has no idea what he's
| talking about but speaks as if he's a domain authority. Of
| course, this is a classic trait of a megalomaniac fraudster.
| vmception wrote:
| But speaking like that moves people, I am trying to learn
|
| Its like when you choose Intelligence 0 in Fallout, everyone
| that is smart sounds dumb and everyone dumb sounds normal
|
| Predicting how to relate to people _to make an investment_ is
| something some of these sales guys get that I don't
|
| I can persuade people to do a lot of things, but selling
| equity to a bunch of technophobic old money and English as a
| Second Language people? Learning
| the-dude wrote:
| > when his only experience was pouring concrete driveways
|
| In NL we call this 'has affinity with the core business'.
| hugi wrote:
| "Has paved paths and laid foundations for the automobile
| industry"
| the-dude wrote:
| Are you in PR? :-)
|
| I think _paved ways_ is canonical ( not a native speaker
| though ).
| armadsen wrote:
| "Paved the way" is the common expression.
| [deleted]
| BuffaloBagel wrote:
| My web services company built an eBay/Craigslist clone for Milton
| about 10 years ago. Trump level bullshitter but with an
| indomitable drive. Despite being a returned Mormon missionary
| Trevor has a loose ethical screw.
| SheinhardtWigCo wrote:
| Any good stories you can share?
| BuffaloBagel wrote:
| He told us he has just cashed out of an alarm company for $1M
| when he engaged us. Turns out that was typical Trevor hype...
| he had gotten nowhere near that amount. Would sometimes pay
| his invoices with stacks of $50 American Express prepaid
| cards. Drove my bookkeeper bananas. I assume the reason was
| rewards related. His claims for traffic on his Upillar
| platform were ludicrous; made out of whole cloth. Hired Glenn
| Beck to shill for him. Drove a comically lifted 4WD truck
| with UPillar emblazoned all over it and seem to always have
| plenty of motorized toys... boats, ATVs, etc. All funded by
| investors. At the end he poached one of our employees and
| left us. I was glad to be rid of him; the engagement was
| never comfortable for me.
| rvz wrote:
| A great opportunity to short $NKLA, if you haven't already done
| it.
| unanswered wrote:
| I wouldn't recommend it. Many of us have known for months and
| months that the company is 100% fraud but the market stays
| irrational.
| samizdis wrote:
| I'm actually a little surprised that shares fell so much on
| this news, I'd have thought that this info - or wide
| expectation of it - was already discounted in the price.
|
| Is it, er, all downhill from here?
| ericmay wrote:
| Well they fell only slightly (surprised they fell at all
| actually) because Trevor Milton was named, not Nikola. So
| they let him go and now he personally is getting sued, not
| the company.
| samizdis wrote:
| The CNBC article said 11pc in early trading. Just checked
| the price and it's 7.9pc down atm. That's still quite a
| drop, I'd say.
| ericmay wrote:
| Gotcha - I think the parent said it only dropped slightly
| so I was reacting to that news at that time. It's
| definitely a significant drop as you point out. I'm a
| little surprised at such a large drop though, the small
| drop made a little more sense to me.
| hu3 wrote:
| The markets can remain irrational longer than you can remain
| solvent.
| SheinhardtWigCo wrote:
| "It's priced in"
| yupper32 wrote:
| If you're reading an article about the indicting the founder of
| a company and someone is posting on HN that it's a good time to
| short, then it's too late to short.
| renewiltord wrote:
| Interestingly, if they _had_ shorted it at the time they made
| the comment, they would currently be ahead.
| yupper32 wrote:
| And if the ball landed on black instead of red the last
| time I bet on roulette I'd also be ahead.
|
| Performance analysis like this after the fact doesn't
| really have any relevance unless there was some information
| missed.
| renewiltord wrote:
| Further reading on this in _Adaptive Markets : Financial
| Evolution at the Speed of Thought_. Has some theories
| around information flow and market participant behavior
| that permit edge to persist.
| Thaxll wrote:
| So he made billions on lies and he's going to keep those right?
| clint wrote:
| Read the article
| caballeto wrote:
| Nope, the SEC demands to get all the gains back plus pay a
| fine. He may go bankrupt after this.
| ghego1 wrote:
| I would expected that someone like him had secured millions
| in offshore accounts well hidden from authorities...
| jollybean wrote:
| Still has a $5B market cap. We live in problematic times where
| populism often matters more than any kind of objective reality.
|
| Every stock seems to have a little bit of this factor.
| ffggvv wrote:
| now do elon
| rvz wrote:
| Like many famous people that have a massive cult following,
| some people like the current Tesla CEO, are allowed and able to
| get away with lots of fraud and can still continue to mislead
| their own customers. Like the dangerous and faulty 'Full Self
| Driving' software that is killing their customers. [0]
|
| The villains of this week is Trevor Milton and Nikola Motors.
| Tesla will probably get away with [0] no matter how many people
| expose FSD which puts lots of drivers lives at risk.
|
| [0] https://www.nytimes.com/2021/07/05/business/tesla-
| autopilot-...
| tibbydudeza wrote:
| Like MLM's - just cultism.
| rwmj wrote:
| Are you claiming that Tesla vehicles are fraudulent and only
| drive when rolling down hills?
| NewLogic wrote:
| Auto pilot full self driving is fraudulent and been coming
| next year for half a decade.
| Pyramus wrote:
| No, parent is likely saying Elon could be indicted for fraud
| as well. He wasn't exactly exonerated by the SEC for 'funding
| secured', and there are a number of lawsuits outstanding,
| most notably the Solar City one.
|
| Just because you have an innovative and popular product
| doesn't mean you can't conduct fraud?
| BlissWaves wrote:
| Tesla is selling Full Self Driving when they do not have the
| technology.
| ffggvv wrote:
| fraudulent? yes.
|
| "full self driving"? fraud.
| rvz wrote:
| FSD (Full Self Driving) feature in Tesla Cars is fraudulently
| advertised and has put many Tesla customers lives at great
| risk and has also killed them too. [0]
|
| Do you not want to warn others about this scam that Tesla is
| selling that can cause someone to believe it and lose their
| life when the software malfunctions or gets confused?
|
| [0] https://www.nytimes.com/2021/07/05/business/tesla-
| autopilot-...
| throwaway123414 wrote:
| I've been following Tesla and Elon Musk for a few years
| already and I've seen many instances when you can see Elon
| doing dubious stuff.
|
| Just before of Tesla's acquisition of Solar City (his
| cousin's company) they presented the Solar roof [0]. It has
| been reported [1] that the roof just didn't work, it didn't
| generate any electricity. In fact, my understanding is that
| even today they are having many issues with the system. How
| is announcing a "solar roof" that doesn't generate
| electricity different that announcing a truck that doesn't
| move?
|
| Also, people often forget that when Nikola went mainstream,
| an email from Elon Musk was leaked to the press stating that
| Tesla was going to ramp up production of the Tesla Semi [3].
| Goes without saying that the Tesla Semi has been delayed yet
| another year since its unveiling back in 2017.
|
| [0] https://www.youtube.com/watch?v=4sfwDyiPTdU
|
| [1] https://www.fastcompany.com/40422084/inside-steel-pulse-
| the-...
|
| [2] https://www.fool.com/investing/2020/06/10/musk-presses-
| the-g...
| misiti3780 wrote:
| The number of Tesla haters on HN is bizarre.
| sixQuarks wrote:
| You have to realize there are a LOT of people on here who
| fail to launch successful startups. Lots of projecting and
| sour grapes.
| misiti3780 wrote:
| Ya, that's a good point, and I never thought about the
| selection bias.
| sixQuarks wrote:
| Also, most people only read headlines. There has been so
| much FUD in the news about Tesla and Musk. If you're not
| following things closely, watching all his interviews,
| etc, then it's easy to believe what you read in
| sensationalized clickbait headlines
| [deleted]
| ren_engineer wrote:
| Musk is pretty much the dream of what every nerd wants to
| become. There's a lot of jaded people on HN who think they
| are just as smart/talented as Musk but don't have anywhere
| near the success.
|
| They deal with the cognitive dissonance by calling him a
| fraud/scammer or wanting to see him fail. Fanboys of Musk
| aren't much better, Musk just seems to attract extremists
| on either side of the aisle who either love him or hate him
| misiti3780 wrote:
| I agree, but regardless I dont see why we call cant agree
| that for all of the guy's faults, he is done some truly
| incredible things and he is still pretty young. He is a
| net positive for the world.
| joering2 wrote:
| Because of my consulting gigs, I know of at least 3
| multimillionaires (>$100MM), who are hoarding air tanks
| (similar to scuba tanks, but there is already a small
| company that produces much larger, home-style tanks for
| this purpose) because someone in Musk circles told them
| Musk is doing so, so they assume this could be end-of-
| the-world scenario.
|
| Imagine our atmosphere to be like a giant balloon. And
| SpaceX rockets are scratching [2] that balloon surfaces
| every time they go up [1]. Who knows, maybe one day one
| of the rockets will scratch it enough and our ionosphere
| goes pop, so to speak.
|
| [1] conspiracy theory much? Here is an article based on
| scientists approach: https://fortune.com/2018/03/26/elon-
| musk-spacex-falcon-9-ion...
|
| [2] funny story, a friend who works for NASA told me
| years ago how upset the management was when they found
| out that SpaceX rockets are not flying flat enough to
| enter the Orbit in a gently manner. There is no gov.
| oversight (yet) because there are very few companies that
| can reach LEO so in theory regulations are not important,
| but few people know NASA spent more money flying rockets
| because they fly them in a way not to tore holes in an
| ionosphere which probably I don't have to tell you how
| important it is to ALL life on Earth. In some way,
| today's SpaceX is a space pirate, and had there been
| proper regulations, they would have not be saving
| anywhere near as much money as they do now flying when
| comparing to NASA.
| misiti3780 wrote:
| I don't understand how this is relevant?
| raesene9 wrote:
| Interesting how even after this was announced, their market cap
| is over $5b (https://www.google.com/finance/quote/NKLA:NASDAQ) in
| the same ballpark as established car companies like Mazda
| (https://www.google.com/finance/quote/MZDAF:OTCMKTS)
| imglorp wrote:
| What? How?
|
| Is there any potential upside at all, unless it's another pump
| and dump or short squeeze game?
| pram wrote:
| Given this market, the fact that it's wholly fraudulent is
| incredibly bullish
| morpheos137 wrote:
| Yeah actually deliving a product that sells is such legacy
| thinking...we badly need a hard crash to clear out the
| deadwood and hucksters in the economy.
| anigbrowl wrote:
| I think relying on the market itself to do this is a
| terrible mistake.
| morpheos137 wrote:
| The unsustainable economy we are in currently is less a
| function of market failure and more a function of
| excessive government interference, globalisation and
| technological plateauing. In a race to the bottom
| everybody loses. The industrial revolution took place in
| the context of cheap energy, new science and engineering,
| expensive labor and higher interest rates. Since perhaps
| the 1970s-1990s all these trends have been reversing.
| PragmaticPulp wrote:
| I also think it's overvalued, but the company distanced
| itself from the criminal founder long ago.
|
| The company also has about 3/4 of a billion dollars in the
| bank. It's basically an extremely well funded startup with a
| bit of a head start on the EV market at this point.
| zippergz wrote:
| With the number of companies (from Tesla to Chevrolet) with
| large volumes actual EVs sold and on the road, I don't see
| how Nikola has a head start?
| tenpies wrote:
| Nikola is probably at the same stage - if not ahead - of
| Tesla when it comes to trucks.
|
| How much would a Tesla with only prototype Semis and a
| factory under construction be valued at? About $5 BB
| actually sounds quite right, maybe even undervalued
| depending on cultist zealotry and SEC enforcement levels.
| yourenotsmart wrote:
| > Nikola is probably at the same stage - if not ahead -
| of Tesla when it comes to trucks.
|
| See, this level of misinformation is a big reason the
| company even exists yet.
|
| Tesla has been selling EVs for years now, and has
| prototyped their own trucks based on their own existing
| drivetrain, battery pack IP, software.
|
| What Nikola has, when we remove the fraudulent claims, is
| a prototype built by Iveco, with zero substantial IP from
| Nikola.
|
| To say Nikola is at the same stage of Tesla is not even
| wrong. They've never built a working truck in their
| entire existence. Their "stage" is at a super position
| from nothing to infinity, as long as you don't look, and
| no one has ever been allowed to look, at the risk of
| getting a dead cat.
| detaro wrote:
| Has Nikola prototypes that can actually drive by now?
| From a quick look, there seems to be suspiciously little
| mention of that, despite there being a clear motivation
| for them to widely promote that after the video scandal
| broke last year?
| frockington1 wrote:
| Ford is the obvious leader for electric trucks, what does
| Nikola have that For doesn't?
| bagels wrote:
| There is no way this is true. Tesla has functional
| factories for batteries for one.
| xkjkls wrote:
| Nikola has focused on some substantially different
| segments of the EV market than they have. Nikola has
| focused on the trucking market, rather than the consumer
| car market, which at least is different from many of its
| competitors
| ethbr0 wrote:
| Popular opinion around EV tech is approaching PowerPC-era
| Mac apologists.
|
| "Yes, it's less performant, but it has {insert special,
| unmeasurable and/or unproven magic here}."
| jjoonathan wrote:
| (Oh, this is fun! I haven't done this in a looooong
| time!)
|
| Unmeasurable? Like, you would have had to run an actual
| editing, encoding, rendering, or simulation task to
| measure it, but you only had the skills to read how many
| GHz were on the box, so you personally were unable to
| measure it? I suppose I'd have to hand you that one.
|
| How well did the "clock speed is all that matters"
| rhetoric age over the last decade? When was the last time
| that Intel's claimed perf boost _wasn 't_ IPC driven?
|
| My favorite part of this story is fifteen years later,
| when Intel's CEO says: We have to
| deliver better products to the PC ecosystem than
| any possible thing that a lifestyle company in
| Cupertino makes
|
| LOOOOOOOL! Whipped at CPU design (and manufacture -- who
| pays for those new kingmaking TSMC nodes?) by a company
| that doesn't even specialize in it. Whipped so badly that
| they have to admit it, even to themselves. Ouch!
| adventured wrote:
| > I also think it's overvalued, but the company distanced
| itself from the criminal founder long ago.
|
| September 2020 is not long ago in terms of distancing
| yourself from the foundations of an enormous fraud.
| [deleted]
| [deleted]
| [deleted]
| chirau wrote:
| I am more surprised that Mazda's market cap is only $5B. That's
| just about the same as Duolingo. Interesting times we live in,
| really.
| pvarangot wrote:
| Traditional car stocks are at bargain( _) prices now.
|
| (_) some may read that as sane, or trading according to
| fundamentals.
| bagels wrote:
| Only if your hypothesis is that companies like Mazda won't
| wither in the inevitable electric car disruption.
| lotsofpulp wrote:
| My guess is fossil fuel cars will remain competitive with
| electric cars (cost per mile wise), since the more demand
| for fossil fuels drop, the cheaper it gets to operate
| fossil fuel cars.
|
| It really depends when the governments actually start
| banning fossil fuel cars. Or implements higher fossil
| fuel taxes, but I do not see a chance of that. And I do
| not see bans for new fossil fuel cars actually going into
| effect for at least 15 to 20 years.
| gpt5 wrote:
| Most gas stations will not change to charging station.
| Instead, every parking place will eventually have its own
| charging outlet.
| speedgoose wrote:
| Most gas station in the Oslo area in Norway have fast
| chargers.
| gpt5 wrote:
| The point is that when every parking spot is a fast
| charger, why bother with the gas station model?
|
| Even in our way to get there, it makes more sense to put
| the charging at the origin or destination, except for
| long trips.
| azinman2 wrote:
| At some point gas stations won't make as much money and
| thus will start changing to electric. The supply could
| flip with current electric charging stations which will
| move the needle.
|
| We'll also see what gets manufactured... there might be a
| time where few gas options will exist.
| lotsofpulp wrote:
| I do not see that point being in near future. All the
| infrastructure for fossil fuel delivery is already
| installed and can easily last decades. It will be a slow
| shift as more and more gas stations shift more of their
| space to electric charging. Or maybe they get obviated
| altogether since you can charge anywhere, but not in next
| 10 or even 20 years.
|
| Diesel is still diesel when it comes to power too, and I
| have not heard of any electric alternative that can
| compare. I expect that to stick around even longer.
| speedgoose wrote:
| Brand new fuel cars may be forbidden in many parts of the
| world.
| nickik wrote:
| The problem is that the infrastructure of ICE and oil
| massively profits from scale, as this drops many of these
| assets will turn negative.
|
| Even if per mile the car would be competitive, the lost
| of value of the car itself would be incredibly.
|
| Who will still buy an ICE car in 2030.
|
| And that is before the new regulation that potentially
| makes these cars even less wanted.
| xkjkls wrote:
| If you want some market crash hedges they are perfect.
|
| Car companies are treated as government institutions. BMW
| and Volkswagen used to produce tanks. The German government
| will ask them too again if they start struggling to much.
| Companies like Fiat or Ferrari are as big a part of Italian
| national pride as rooting for their football team. Hyundai
| is 10% of South Korea's entire economy.
|
| The car industry is political. Anyone assuming one company
| is going to sweep in and own everything hasn't paid
| attention. These companies will be defended until the ends
| of the earth by their own governments, so you have a
| massive put existing for all of them by default.
| mbesto wrote:
| One company has endless growth potential, 80% gross margins,
| and every new customer served has marginal cost implications
| to the business.
|
| The other one does not.
|
| I think you can guess which one is which.
|
| For the record - I'm just as skeptical as many others are
| about tech valuations, but there is a legitimate reason to
| value companies they way we do, it's just not always a "its
| tech, so it has to be valued at BLAH", there's a lot of
| nuance to these businesses.
| dh5 wrote:
| One company has also lied about "nearly all aspects of the
| business," so maybe its 5B valuation is based on not quite
| legitimate things.
| slymon99 wrote:
| I assume this is a comparison to duolingo, not Nikola.
| gamblor956 wrote:
| _One company has endless growth potential, 80% gross
| margins, and every new customer served has marginal cost
| implications to the business._
|
| Mazda?
|
| Because according to their SEC filings Duolingo has pretty
| limited growth potential, increasing losses (or in other
| words, negative gross margins), and they spend a
| significant amount of money to attract each new paying
| customer. They only approach 80% gross margins if you use
| fantasy unicorn accounting instead of GAAP.
| mbesto wrote:
| Are you trolling?
|
| > Because according to their SEC filings Duolingo has
| pretty limited growth potential, The
| global market for direct-to-consumer language learning is
| large, growing, and shifting online. According to
| HolonIQ, total consumer spend on both online and offline
| language learning represented a $61 billion market in
| 2019, and will grow to $115 billion in 2025, implying a
| CAGR of 11% over this period. Online language learning is
| the fastest-growing market segment, projected to grow
| from $12 billion in 2019 to $47 billion in 2025,
| representing a CAGR of approximately 26% over this
| period, and to comprise 41% of total consumer spend on
| language learning in 2025. We believe that growth in
| digital spend will be driven in part by a shift away from
| offline offerings, as consumers seek more affordable,
| convenient, and higher quality online solutions.[0]
|
| > increasing losses (or in other words, negative gross
| margins)
|
| That's not how losses and negative gross margins work. I
| just double checked, gross profit for DuoLingo in 2020
| was 71.55% (sorry not 80%). Compare that to Mazda's
| abysmal 21.7%. Cars specifically require heavy R&D (which
| does not go into COGS), so the comparison is a nice one
| since R&D for DuoLingo also requires heavy R&D.
|
| > spend a significant amount of money to attract each new
| paying customer
|
| Customers who pay subscriptions, not a one-time car cost.
| Every new car created requires upfront capital to build
| the car. SaaS CLV vs a car CLV requires WAY less costly
| touch-points after the initial sell.[1]
|
| [0] - https://www.sec.gov/Archives/edgar/data/1562088/000
| 162828021...
|
| [1] - https://a16z.com/2014/05/13/understanding-saas-
| valuation-pri...
| gamblor956 wrote:
| I stand by my comments. Groupon and LivingSocial said the
| same about their respective market, a decade ago. And if
| you'd done your research into HolonIQ's report, _offline
| language learning_ was the supermajority of the $61
| billion market. Online learning was a _tiny tiny
| fraction_ of the market, and as many other commenters
| have pointed out: Duolingo and most of its online
| competitors are only good for superficial, introductory-
| level learning, with actual skill growth requiring in-
| person interaction. Moreover, Duolingo 's online
| competition alone includes hundreds of free and paid apps
| and websites, plus Youtube and Twitch.
|
| Duolingo's "gross profit" is not calculated using GAAP.
| It's calculated using fantasy unicorn accounting. Key
| giveaway: if a company's revenue "more than doubles" but
| it's losses also more than double, it's _not actually
| profitable_ on a per-unit basis; it 's simply shifting
| items that should be reported in COGS to other items that
| let it artificially inflate its gross margins. In
| Duolingo's case, it's actually worse: while revenues
| doubles, losses are on track to quadruple (they reported
| a $13.5 million loss for just 2021Q1, compared to roughly
| $16 million for all of 2020).
|
| I've worked for enough startups going public that I can
| spot when a startup is playing games with its financials.
| Duolingo is one of them. This time next year, Duolingo
| will be looked on as 2021's Groupon.
| mbesto wrote:
| > Groupon and LivingSocial said the same about their
| respective market, a decade ago.
|
| These are hilarious businesses to cherry pick because
| they explicitly used fuzzy accounting for the nature of
| their industry - which was selling coupons that may or
| may not be used. Their numbers were irregular because
| they accounted for coupons that may have never been
| actually used, but were allocated on their books as such.
| DuoLingo is NOTHING like that. People pay a subscription
| for a service that uses software as its delivery
| mechanism. COGS is simple for them -> hosting + customer
| service. COGS is very different for Groupon and
| LivingSocial.
|
| > Key giveaway: if a company's revenue "more than
| doubles" but it's losses also more than double, it's not
| actually profitable on a per-unit basis; it's simply
| shifting items that should be reported in COGS to other
| items that let it artificially inflate its gross margins.
|
| You have no idea what you're talking about and clearly
| have never actually seen financials of a business like
| DuoLingo.
|
| Guess when NetSuite's most profitable year was? That's
| right, 2009, during one of the biggest recessions in the
| world's history, and it's because they fired their growth
| engine (S&M) and just pumped out cash.
|
| https://a16z.com/2015/05/15/a16z-podcast-why-saas-
| revenue-is...
| gamblor956 wrote:
| _You have no idea what you 're talking about and clearly
| have never actually seen financials of a business like
| DuoLingo._
|
| :) My list of clients when I was still working at a firm
| include many tech companies ranging in size from vastly
| unprofitable startups to multi-billion dollar public
| companies, in industries including robotics, hardware,
| SaaS, PaaS/IaaS, biotech, media tech, aviation, and clean
| tech.
|
| A number of YC startups were clients, including some that
| are still actively discussed on these forums today. At
| least one of the Groupon, LivingSocial, etc., cohort was
| a client...
| gscott wrote:
| And there are other competitors who can copy whatever
| they are doing. I agree Mazda provides more value.
| mbesto wrote:
| You know whats great about our market. If you truly
| believe this, you can make a duolingo copy and therefor
| have your own $5B company (sounds nice huh?) AND you can
| invest whatever assets you might have into Mazda and make
| money on the value of their stock.
| [deleted]
| anyfactor wrote:
| Well... remember the hertz saga?
| handmodel wrote:
| Hertz got out of bankruptcy because they have a (somewhat)
| profitable business model and a lot of assets they sold off.
|
| I don't think that applies here - at least not without
| massive growth that seems outside the realm of possibility.
| ArnoVW wrote:
| If I remember the analysis of Matt Levine correctly, they
| have a lot cars, and even if the beginning of Covid was
| rough on them as ppl traveled less, the price of 2nd hand
| cars went up 6 months after the that and they were able to
| bounce back.
| fukmbas wrote:
| Proof that we are in another tech bubble
| yalogin wrote:
| They even named the company to evoke Tesla and form an impression
| that they competing with them. This is a pure scam but now they
| have enough money to legitimize themselves. This is actually a
| great outcome for their investors, the CEO takes the blame and
| the company becomes legit. Just sad that this is accepted as
| normal. I will not be surprised if the stock sky rockets
| tomorrow.
| dreyfan wrote:
| And yet NKLA still has a $5B market cap despite the entire
| company being 100% fraud. Amazing.
|
| [1] https://finance.yahoo.com/quote/nkla
| chasebank wrote:
| Older I get, more I realize the market is just a game of human
| psychology. Stocks, housing, crypto, etc. History says
| speculative 'investing' ends poorly but this time, who knows?
| If you happen to have the answer, I'm all ears.
| clipradiowallet wrote:
| > History says speculative 'investing' ends poorly
|
| If it ends poorly for someone(s), then it ends fabulously for
| someone(s) else. The same could be said for gambling... the
| lure of easy money is difficult for people to resist.
| FredPret wrote:
| It's not zero sum though
| mytherin wrote:
| Buying and selling stocks (or crypto, or ...) on its own
| is zero-sum. If you sell your stock, someone else has to
| buy the stock for that same amount of money. You can only
| make money if someone else loses.
|
| The loser does not realize they have lost money
| immediately, and while the stock price is up it looks
| like there are only winners. The losers only realize they
| have lost money after the asset collapses in price while
| they own the asset. That is the beauty of these schemes.
| The losers are already there, they just don't know it
| yet. Of course they are also heavily motivated to keep
| the price up to prevent themselves from becoming losers
| (hence HODL, "apes together strong", etc). These schemes
| can go on for a while, and a lot of people can make a lot
| of money in the process (again, at the expense of the
| losers, no money is being created here).
|
| Stocks are only not zero sum once you account for e.g.
| dividends being paid out. That applies to companies with
| a solid foundation, but it is unlikely a company with no
| income stream that is rooted in fraud is going to be
| paying out sufficient dividends to their stock owners to
| account for the purchase price.
| nostrademons wrote:
| "History says speculative 'investing' ends poorly but this
| time, who knows?"
|
| It'll still end poorly, but if you choose & time trades
| correctly it'll end poorly for _other_ people. Choosing and
| timing your trades is left as an exercise for the reader.
| babesh wrote:
| It's a game even without human psychology. The human
| psychology just adds elements to the game.
|
| Whether it ends badly depends on how and for whom you score
| the game.
| extrememacaroni wrote:
| It's a thing created by humans, used by humans, who assign
| value to tickers, where everyone tries to win and some have
| to lose for others to win.
|
| It can only be a game of cat psychology.
| rchaud wrote:
| Same here. Houses of cards can stay up as long as there are
| enough people who believe that it's not a house of cards.
|
| No wonder we have a misinformation crisis. It works for
| politicians, crypto markets, meme stocks, regular stocks, you
| name it.
| snarkypixel wrote:
| "The father of value investing, Benjamin Graham, explained
| this concept by saying that in the short run, the market is
| like a voting machine--tallying up which firms are popular
| and unpopular. But in the long run, the market is like a
| weighing machine--assessing the substance of a company."
|
| Boring answer, but in the long-term, great businesses go up,
| whereas crappy businesses go bankrupt.
| pinewurst wrote:
| I think this was much more true in the long ago era of
| regulation, (mostly) autarky, and limited market
| info/trading barriers.
|
| I've looked at "Security Analysis" and it's very much a
| historical piece - railroads and (practically) buggy whips.
| Things change relatively faster these days. Yesterday,
| Kodak was the bluest of chips; today, pretty much a joke.
| Heck, look at Buffett in the last decade - I'll bet he
| fully Grahamitized IBM, which didn't make it any less
| hollow. That sort of analysis, or even certainty (a false
| premise by definition) just isn't worth the effort for the
| average ownership span.
| JumpCrisscross wrote:
| > _this was much more true in the long ago era of
| regulation_
|
| It's still true. We just haven't had, in close to a
| generation now, the sort of bear market that permits the
| enforcers of fundamentals to re-emerge: liquidation and
| bankruptcy against overvaluation; M&A against
| undervaluation.
| nostrademons wrote:
| Will we? The trend has been for countries to protect
| their big losers, those underperforming companies that
| are too big to fail. Started in Japan in the 80s, then
| Europe in the 2000s, and the U.S. since 2009. Arguably
| communist countries have always functioned this way, with
| state-owned enterprises.
|
| The result is a coupling between between the fate of the
| nation and the fate of its major employers, with loose
| monetary policy, regulatory capture, and explicit fiscal
| bailouts to protect it. Then instead of the deadwood
| being cleaned out, the whole country becomes deadwood,
| and you get lost generations and social unrest as the
| only way to throw out ways of doing business that aren't
| working is to throw out the people in power.
| WJW wrote:
| > just isn't worth the effort for the average ownership
| span.
|
| There's no rule that says you need to hold stocks for the
| same average period that the rest of the market does.
| Analyzing securities and purchasing those that are
| undervalued is still an extremely profitable activity at
| many hedge funds and prop trading desks. The fact that
| the average investor is more FOMO-driven these days only
| makes sound analysis more valuable, just like playing
| poker with a drunk newbie will have higher variability
| but better expected value.
| pinewurst wrote:
| I don't disagree - just want to note a difference between
| sufficient analysis and overthinking the problem (IMHO).
| alasdair_ wrote:
| This is true up until the point where your logically
| sound short of GME comes up against "apes together
| stronk"
| WJW wrote:
| That's why I wrote:
|
| > higher variability but better expected value.
|
| If you put all your money into shorting GME then yes, you
| will have a bad time when WSB gets excited again. If you
| have a widely spread portfolio of shorts in overhyped
| companies with weak fundamentals and longs in underhyped
| companies with strong fundamentals, having a few trades
| go against you is not the end of the world.
| ethbr0 wrote:
| In times of plenty, where money flows and pools drives
| stock prices.
|
| In times of poverty, fundamentals drive stock prices.
|
| We've been in a time of plenty for a historically
| abnormally long period.
| Apocryphon wrote:
| And the time of plenty is primarily driven by monetary
| policy, is it not?
| JumpCrisscross wrote:
| > _plenty is primarily driven by monetary policy_
|
| Short-term market cycles are _always_ driven by credit,
| which is in turn driven by monetary policy.
| kortilla wrote:
| Kodak is a terrible example. That company had a long
| decline into irrelevance. Big companies have been doing
| that forever.
| pinewurst wrote:
| It's a good example because it shows the gulf between
| organizational/innovational rot and impeccable
| bookkeeping.
|
| Kodak's signs of decay were visible at least as long ago
| as the late 70s vis a vis the Polaroid patent
| infringement case (and the cheesiness of Kodak's own
| knockoffs).
| 6gvONxR4sf7o wrote:
| Are these the same markets? The stock market between
| investors and companies could be a voting machine while the
| "stuff" market between customers and companies could be a
| weighing machine. Then it would be a difference of which
| market rather than which timescale, potentially allowing
| the investor market to prop up companies failing in the
| stuff market for long periods due to nothing more than
| investor popularity.
| rchaud wrote:
| I remember reading Graham for a finance class in the
| mid-2000s, and even then it was several decades old.
|
| It's a relevant read if you work in securities analysis. If
| you're an investor however, the takeaways of the book are
| more philosophical than actionable. Too much has changed in
| the market since Graham's time.
|
| The idea of an Uber-type company using VC billions to cover
| its losses would have been completely alien to him. As
| would companies doing an end run around the IPO process
| with SPACs.
| f38zf5vdt wrote:
| They used to. In the era of quantitative easing,
| governments just pump money into any failing major player.
|
| edit: I see I rustled some jimmies. Feel free to have a
| look yourself at "modern capitalism".
|
| https://money.cnn.com/news/specials/storysupplement/bankbai
| l...
| ethbr0 wrote:
| Pumping money into the market in general has the same
| effect.
|
| Especially if chosen inflation measures conveniently
| exclude capital areas money would accumulate (stocks &
| property).
| f38zf5vdt wrote:
| Yes, agreed.
| sirspacey wrote:
| This is a wildly optimistic way of framing the long-term
| value of the market.
|
| It's more likely that the crappy companies will live for
| the long term - if you measure "crappy" by anything
| resembling consumer/client benefit.
| gpt5 wrote:
| It's still all rational:
| https://en.wikipedia.org/wiki/Greater_fool_theory
| xyzzy21 wrote:
| True. Because rational doesn't mean logical, ethical or
| moral.
|
| It merely means that given a certain set of axioms,
| heuristics and circumstances, it arrives at the same or
| nearly similar results.
|
| The law is rational in this sense but not always logical or
| moral.
|
| The one things with markets today is, thanks to QE, they
| are NO LONGER value/price seeking system at all. The proof
| of this is the cross correlation across all asset and
| instrument classes hovering around 80%-90%. That's NOT what
| should be happening.
| shawnz wrote:
| > History says speculative 'investing' ends poorly
|
| Does it? If you look past the biggest scams and bubbles, I
| think most research shows that a moderate amount of
| speculation actually decreases volatility and makes market
| manipulation more difficult. Speculators after all are the
| ones who correct the prices of assets which are being wrongly
| valued.
| chasebank wrote:
| Copy / paste from elsewhere but here's a recent list of
| speculative investing bubbles and their outcomes:
|
| The Japanese Nikkei is still down 40% from 1989. That was
| 31 years ago. The Shanghai Composite index is down 45% from
| 2007. That was 13 years ago. Hong Kong's Hang Seng Index is
| down 10% from the peak in 2007. The German DAX is a "total
| return" index that includes dividends. So it cannot be
| compared to the other indices here, or to the S&P 500. The
| German index that is not a total return index and therefore
| can be compared to the S&P 500 is the DAXK. Despite its
| red-hot surge in recent months, it's still down 8% from the
| peak in the year 2000. That was twenty years ago. The
| London stock exchange index FTSE is down 13% from 1999. 21
| years ago. The Italian stock index, the FTSE MIB, is down
| about 60% from the year 2000. 20 years ago. The French
| stock index, the CAC40, is down 24% from its peak in the
| year 2000. 20 years ago. The Spanish stock index IBEX 35 is
| down 58% from its peak in 2007, which was the peak of the
| Spanish housing bubble that collapsed with devastating
| results 12 years ago.
| 6gvONxR4sf7o wrote:
| That makes it look like you would have lost money if
| you'd put it into those indices. Looking more closely (I
| only bothered with Nikkei), that seems unlikely. Compared
| to the full year average for 1989, it's only down 15
| percent. Or zooming even further out, it's nearly double
| the eighties average today. If a peak is short lived
| enough, it's unlikely to strongly affect people investing
| steadily.
|
| It would be interesting looking at the peaks of 1/5/10
| year averages that contain the actual peaks.
| chasebank wrote:
| My point still holds true. Down 15 per over 32 year
| period and inflation of the Yen is down 16%. This is one
| famous example of how speculative investing ends poorly.
| 3 decades of flatline at best. Look up Japanese lost
| decade. It's fascinating to read about and the eerily
| similar to current day US.
|
| [1] https://www.inflationtool.com/japanese-yen/1989-to-
| present-v...
| kolbe wrote:
| For what it's worth, you cannot really compare non-total
| return indexes with one another either. You're assuming
| they have had the same dividend yield during the
| comparison period, which isn't a reasonable assumption.
| In reality, only total return indexes can be relied on
| for accurate information.
| shawnz wrote:
| Yes, but what about all the speculation that happened
| that didn't lead to bubbles and actually led to improved
| market efficiency? My point is that you can't just look
| at the most obvious examples of past bubbles with full
| hindsight and say that all speculation is a net negative
| because of those.
| chasebank wrote:
| Yes, of course, some speculation can lead to improved
| market efficiency. I suppose we should define at what
| level of speculation deems a speculative market.
|
| "I think most research shows that a moderate amount of
| speculation actually decreases volatility and makes
| market manipulation more difficult."
|
| I'd be interested to read such research.
|
| To me, this current craze (Stocks, housing, crypto, etc)
| just doesn't pass the sniff test. It just seems off. Has
| for a long time. Something has to give. It doesn't make
| sense. I tell my friends, either things correct in a
| large way or we're going to be eating $50 cheeseburgers.
| Again, who knows!? If you did, you could make a killing.
| shawnz wrote:
| > I'd be interested to read such research.
|
| See here for example: https://www.bankofcanada.ca/wp-
| content/uploads/2015/11/wp201...
|
| > It doesn't make sense. I tell my friends, either things
| correct in a large way or we're going to be eating $50
| cheeseburgers.
|
| Why not? My parents paid 50c for a cheeseburger in their
| youth and now I pay $5. What doesn't make sense about
| inflation? It is the expected way in which our market
| works.
| azinman2 wrote:
| A $5 burger would be super cheap in SF, difficult to
| find, and unlikely one worth eating.
| chasebank wrote:
| Thanks for the link, I'll have a read. From the abstract,
| it clearly references only hedge funds and swap traders
| in the study. Most speculative markets get in trouble
| when retail gets involved.
|
| > Why not? My parents paid 50c for a cheeseburger in
| their youth and now I pay $5. What doesn't make sense
| about inflation? It is the expected way in which our
| market works.
|
| My point is that current asset prices only make sense
| relative to an $50 cheeseburger at current prices, not
| that inflation cannot occur and cheeseburgers won't be
| $50 in the future. Again, I don't have the answer. Wish I
| did. Wouldn't be reading HN at work but building golf
| courses :).
| hogFeast wrote:
| Just in my experience as an investor, I have never seen
| anything like this. And I am somewhat familiar with financial
| history, and I have never heard of anything like this
| happening either.
|
| It isn't just all the fraud SPACs, it is GME, it is AMC. You
| can have a business that is overvalued based on the
| fundamentals, but the future is always unknown. What is
| interesting about now is that you have companies with huge
| risks, that are already doing poorly today, and the market is
| just ignoring it (and btw, you have started to see papers
| appearing, both theory and practical, that explain how retail
| money is pushing these stocks...this is something that people
| in the market already understand but there is point blank
| ignorance from govt, media, economists, etc.). With dot-com,
| there was theoretical growth there. With housing, there was
| structural reasons why the market didn't function. There are
| often fundamental reasons why these things happen. With this,
| it is just a wave of money crashing into this small section
| of the market.
|
| The only exception that occurs to me is HTZ. There was a huge
| media furore about that, and it turned out that was totally
| wrong (people who bought at the bottom got more than 10x
| their money in six months).
| andybak wrote:
| HTZ = Hertz?
| hogFeast wrote:
| Yes...I think it is HTZZ now they are out of bankruptcy.
| hef19898 wrote:
| I am by no means an economic expert, far from it. To me it
| seems so, that there is way to much money flowing around,
| looking for an outlet. And with interest rates being all
| time lows since 2008 parking that money at a bank doesn't
| work anymore. Before 2007/8, the problem was too much money
| being made too easily. We solved that by creating more
| money. And we repeated that with Covid.
| Apocryphon wrote:
| That's ZIRP for ya.
|
| https://www.readmargins.com/p/zirp-explains-the-world
| hef19898 wrote:
| This article summarizes my thoughts extremely well,
| thanks for that! I would throw in food and drink delivery
| with scooters, so!
| hogFeast wrote:
| I have thought a lot about this. I am not sure that I
| have an answer because the way in which everyone (inc.
| myself) thinks about financial markets appears to be
| totally wrong (I am in the UK, we have had several rounds
| of QE since 2010...every time, the BoE gave a different
| explanation of how QE works).
|
| But it is easier to comprehend that, most obviously in
| the EU, there is a shortage of risk-free assets. It is
| less that there is too much money and more that there is
| a mismatch between assets required by investors to match
| liabilities and what there actually is. My guess is that
| over the next ten years, we see a move to understand the
| demand for financial assets in more depth (and from this
| perspective, QE seems like financial vandalism). Framing
| purely in terms of supply doesn't really explain what is
| happening or why people are doing things that make no
| sense.
|
| I also don't think 2007/08 was a function of too much
| money at all. It was a combination of structural issues,
| poor regulation, and a relatively normal financial cycle
| (people buying things because other people were buying
| them). What happened in 2008 was the market working
| effectively. It was after 2008 when the odd things
| started happening (one very interesting thing to me was
| Blackstone's property business...they were doing the most
| overvalued deals at the very top of the market in
| 2006/07...and they ended up making multiples, that really
| isn't normal, and the bailout in the view of the Fed was
| the market working...which is, ofc, totally backwards).
| hef19898 wrote:
| That makes more sense, thanks for the post!
| CPLX wrote:
| One thing you're ignoring is that investment doesn't occur
| in the abstract. It's literally an investment in the
| company, and it's not just a bet on future results it
| actually can and does change the outcome.
|
| For example GME and AMC were able to wipe out their debt
| snd get a bunch of cash in the door to run their business
| with via all this retail investment. It's quite possible
| having that money will change their story from failure to
| success.
|
| Betting on horses doesn't make the horse go faster but
| betting on companies can.
| hogFeast wrote:
| Are you familiar with Mogdilani-Miller? Being able to pay
| off debt does not increase the value of equity. The
| capital structure has changed but that makes no
| difference for the actual value of the business (which is
| determined by cash flows).
|
| And, ofc, it is massively value-dilutive in practice for
| shareholders. Debt is extremely cheap and equity is
| expensive. And, in this case, massive amounts of value
| have been destroyed by issuing equity at a valuation that
| can't be sustained by cash flows. Indeed, what has
| happened is the exact opposite of what you think has
| happened: the share price has increased, and that has
| given management the opportunity to destroy value by
| rinsing shareholders. Debt holders that were facing total
| loss have been bailed out by equity. Whatever the value
| of the debt was, that is the close to the amount that has
| been lost (because the value of that debt was close to
| zero).
|
| This is Corp Finance 101 but the marginal investor today
| doesn't understand this (unf, debt investors do, bankers
| do, mgmt do...they have made out with a couple of yards,
| equity got rinsed once again). Nothing goes anywhere in
| finance. All that is happening in AMC and GME is people
| trading capital loss between themselves (and debt
| investors finding someone to buy their capital loss at
| 100c in the dollar).
| api wrote:
| https://coinmarketcap.com
|
| Tether, either a scam or a criminal money laundering enterprise
| (or both), has a market cap of over $50B. DOGE, a joke based on
| an old meme of a Shiba Inu, has a market cap of over $1B.
|
| Not only is the real Tesla's market cap not irrational, at this
| point I'd say any company that actually has anything of value
| should be valued in the hundreds of billions. The pizza place
| around the corner should be at least $100B in that they
| actually make something.
| lotsofpulp wrote:
| It has a $5B market cap, and I was not able to confirm that the
| organization has every produced a working product. A cursory
| look at Wikipedia for the guy and the company would indicate it
| is a scam. Not to mention naming the company to be off brand,
| but related to a real company.
|
| The only source of his wealth might be Worthington Industries,
| but his track record indicates he has no expertise in making or
| managing anything, so is he related to someone high up there or
| something?
| JumpCrisscross wrote:
| They have ~$900mm cash. So it's only $80% bullshit, for
| whatever that's worth.
| nickik wrote:
| Well they cheated so much money in and now they are on live
| suppor. But since they don't have much expenses they can
| survive for a long run on that money.
| kolbe wrote:
| Thank /r/WSB for that. No one can short dog companies anymore
| for fear of being short squeezed.
| pvarangot wrote:
| In like, 99% of the cases where you make a bet that a ticker
| will go down your enemy is timing it right given the high
| volatility on dog companies, not a "squeeze".
| adabyron wrote:
| That subreddit is just a scapegoat. There are so many other
| places people are looking for the next big return.
|
| Also you can short dog companies still. But if there are to
| many people shorting it, like GME had, you do run this risk.
| That's not any internet forum's fault.
|
| That said, it can be really hard to make money betting on
| stocks to go down. I believe it was Care.com where people
| were putting out similar reports of how terrible the company
| was & the horrific incidents happening. In the first half of
| 2018 you had articles pointing out all these issues. It's
| stock kept going up around 30% before it finally crashed in
| the beginning of 2020.
|
| Of course it is only fair to also call out all the quality
| companies where short investor companies try to keep the
| price down for ages or publish BS to profit off shorts. That
| was a big thing for those who were happy to short squeeze
| during GME.
| dannykwells wrote:
| Came here to say this. So many good companies doing real work
| worth way less. Pure insanity.
| belter wrote:
| Well if a Deli can be worth 100 million...
|
| https://www.cnbc.com/2021/04/15/theres-a-single-new-jersey-d...
|
| Maybe all these valuations are correct and its the dollar that
| is going the direction of the zimbabwean dollar ?
| https://s.wsj.net/public/resources/images/P1-BA632_ZIMDLR_DV...
| koolba wrote:
| Apples and oranges. NKLA has a daily volume of 11M shares.
| I'm not saying there isn't shenanigans involved, but it's
| much harder to do at that scale v.s. a handful of thinly
| traded OTC shares.
| adrr wrote:
| Deli was being turned into an acquisition vehicle to take a
| foreign company public. It's a common way for a foreign
| company to access the US capital markets.
| woodruffw wrote:
| That deli isn't "worth" $100 million: it's thinly traded on
| an underregulated market (OTC). The headline is eye popping
| and drives readers; the more mundane reality is that the
| deli's 60-or-so shareholders can stake whatever prices they
| want between each other without ever realizing an _actual_
| valuation of anywhere near $100 million.
|
| This is in contrast to Nikola, which is currently listed on
| Nasdaq and appears to have gone out of its way to deceive
| retail investors.
| rchaud wrote:
| This is exactly how startup valuations work though. Some
| minor chunk of equity gets bought up by an investor, so by
| extension the entire equity of the company is now worth
| billions on a per-share basis.
| woodruffw wrote:
| > Some minor chunk of equity gets bought up by an
| investor, so by extension the entire equity of the
| company is now worth billions on a per-share basis.
|
| This prospective valuation is based on the assumption
| that the company eventually either goes public on a
| reputable, retail exchange _or_ is bought for some
| reasonable fraction of the expected share price. Neither
| of these is or would be true for the deli.
|
| But I think your overarching point is an excellent one,
| and it's _exactly_ why I 'm skeptical of the valuations
| implied by fractional VC investments. Especially when
| they're tied to the Uber model.
| speedgoose wrote:
| > He was freed on a $100 million bond secured against two of his
| properties in Utah.
|
| It's nice to be rich in this part of the world.
| superfunny wrote:
| I doubt that he had to put up $100 million to be released -
| probably more like $1m to $2m. When Tom Barack was released on
| a $250m bond earlier this month, it was secured by $5m in cash.
| nickik wrote:
| Literally when I first heard about the company, being interested
| in EV I started looking in to them.
|
| 10 minutes into a interview with the founder I was instantly
| convinced that they were a fake, fraud company.
|
| They had a very clear strategy, and as a scammer, one must give
| him some credit. He managed to push a company to higher
| evaluation then GM based on literally nothing but marketing and
| false claims.
| cybert00th wrote:
| Hindenburg Research was right then.
|
| https://hindenburgresearch.com/nikola/
| teej wrote:
| They stake a lot of money on being right.
| shoo wrote:
| tangent:
|
| For Hindenburg Research's business model, it doesn't suffice
| for them to accurately detect that a company is fraud.
| Hindenburg also needs to get the timing of their trades right,
| and find a way to communicate the message that results in
| market demand for the stock dropping.
|
| e.g. the kind of horror story where you enter into a short
| position on a stock that you believe is a fraud or otherwise
| wildly overvalued by the market (and you're right) and the
| market price climbs 10x over two years, so you exit to take a
| huge loss, then maybe 1-3 years later the market catches up and
| decides the company is a failure. You were "right", but so
| what?
|
| Maybe another way to look at this is that there are probably a
| lot of other frauds or other overvalued companies out there,
| but the current market conditions don't make them viable
| targets for short sellers, so maybe no one is going to try very
| hard to out them.
| danans wrote:
| "2018: In Order to Continue the Appearance of Progress, Nikola
| Posted a YouTube Video of Its Nikola One "In Motion" on the
| Road. Text Messages from a Former Employee Reveal the Truck Was
| Simply Filmed Rolling Down a Big Hill."
|
| Also see their research on Lordstown Motors. They seem to have
| discovered a major fraud niche in upstart EV makers.
| T3RMINATED wrote:
| White Collar crime pays well, no lofty prison sentences.
| ricardobeat wrote:
| > The SEC asked the U.S. District Court of the Southern District
| of New York to permanently bar him from acting as an officer at a
| company that issues securities, to disgorge all ill-gotten gains
| and pay a fine
|
| Prison? Where is the prison part?
| dls2016 wrote:
| These are "civil" matters. You don't get pepper sprayed for
| financial crimes, or environmental crimes, or wage theft, or...
| detaro wrote:
| Sentence before:
|
| > _The Securities and Exchange Commission_ > also < _filed
| civil securities fraud charges against Milton on Thursday._
|
| The SEC is not involved in _criminal_ proceedings which could
| result in prison or other criminal penalties, so no point
| looking for that in the parts of the article that discuss the
| civil actions of the SEC.
| tahon wrote:
| Entertaining video on the downfall of Nikola
| https://www.youtube.com/watch?v=1oqqnkkTKVM
| sidcool wrote:
| This is hilarious. Very creative. Thanks for sharing.
| bjowen wrote:
| Indicts != convicts, fwiw.
| xwdv wrote:
| Been a long turbulent road, lots of interest payments, lots of
| downvotes, but soon I will be able to close out my massive short
| position that I opened 10 months ago against this company.
|
| Reference: https://news.ycombinator.com/item?id=24473631
| qeternity wrote:
| Curious what your average borrow cost is, if you're comfortable
| saying.
|
| Given the absurdity of cult bagholders that formed around this
| thing, I'd imagine it was reasonably hard to borrow.
| mmdoda wrote:
| How much do you stand to make?
| the-dude wrote:
| Original title _Grand jury indicts Trevor Milton, founder of
| electric carmaker Nikola, on three counts of fraud_
|
| Suggested title which does fit : _Grand jury indicts Trevor
| Milton, founder of Nikola, on three counts of fraud_
| Aperocky wrote:
| _Grand jury indicts Trevor Milton, founder of Nikola fraud_
| eplanit wrote:
| I wondered why there is a superfluous comma in the title.
| tankenmate wrote:
| There isn't a superfluous comma, the two commas are use to
| delineate the relative clause "founder of electric carmaker
| Nikola".
| ternaryoperator wrote:
| I could be mistaken, but I think it was a tongue-in-cheek
| reference to Nikola being a fraud all along. That is,
| Milton, the founder of the Nikola fraud.
| the-dude wrote:
| There was a superfluous comma.
| nikkinana wrote:
| Where's Al Gore? This is the one big company that can stop, if
| not reverse, global climate change.
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