It’s no surprise that a world of Tesla, Tesla, Tesla, hot first-day trading on the initial public offering of Tesla and its expanded IPO on Monday, dark days, murky shadows and red-sky days, Tesla stock trading up at a market cap of $60bn (about £46bn) and the biggest “symbolically meaningful” IPO since Facebook in 2012, eclipsing in value Facebook’s historic 2013 IPO.
Tesla’s announcement Monday that it was installing a cash containment system, including batteries, on its first floor in a huge “secret factory” at its Fremont, California, car-making facility has lit up the tech world’s attention on the automaker with increased vigor, thanks to a combination of Tesla CEO Elon Musk saying that the investment would, “mitigate the massive effect of supply-side constraints on Tesla’s profitability”, and a big swath of the financial and tech press delightedly tweeting stats about the $3bn price tag (over $4bn when cash burn included) and technical features including double the cooling capacity compared to cars with battery alone and a car they claimed can go from 0-60 mph in under 3.5 seconds and reach a 200mph top speed.
Even President Trump is sending money to the US-made electric-car maker.
Other investors, rightly or wrongly, are salivating and hoping that Amazon, Google, Goldman Sachs, Goldman Sachs, Berkshire Hathaway and Walmart will soon pour money into Tesla or to its new energy storage “gigafactory”, but the fantasy that Tesla is about to make money and have a cash flow that’s both sustainable and smaller than Tesla’s $5bn in manufacturing capacity, including their Fremont facility, provides almost too much material for a self-anointed genius to discuss, especially as his story and trajectory for 2017 can now be vastly more fully investigated than it was in January.
As Tesla, Musk’s living nightmare is told, following the shorted and reported information leaks about the renegotiation of its debt agreements, gross defects and how overworked the workers were, the prior public insistence that Musk has about as much sleep in the Tesla factory as the average person doesn’t hint at the level of desperation in which he is operating and which this desperate situation demands. What might we now look at to understand what’s happening in the transportation world?
The Federal Bureau of Investigation (FBI) and Securities and Exchange Commission (SEC) investigations into the multimillion-dollar loss and massive negative publicity of 2017 for Tesla and its IPO do not, at this point, involve the overall performance of the company or the stock price, but the handling of Tesla’s corporate results.
As per normal, since the company did not disclose the Tesla cooling system was due for installation, I have been retained by NOS Technologies Inc, the company that sued Tesla and Musk for copyright infringement and trade libel last fall for some statements made on video in 2015 about NOS that Musk used on youtube in a way that should not have been used, and on Twitter in a way that should not have been used for campaigning purposes. Musk, acting under pressure to somehow represent Tesla’s performance in a positive light, claimed Tesla’s expected loss was overly conservative, that Tesla was moving quickly and would have a profitable 2017, and that it should be trading at more than double its market cap at that time.
This last line of argument was later retracted and investigated, because it was wrong and an egregiously misleading statement to investors and journalists that was taken out of context, and Musk, as we know, very shrewdly turned a negative for him, gained investor attention and helped raise $2bn for Tesla, essentially taking his company public.