Tesla under investigation for fraud?

Here's a disturbing article (thankfully non-political) that I spotted on Zero Hedge:

"Tesla, Without Any Doubt, Is On The Verge Of Bankruptcy..."

Basically, John Thompson, the Chief Investment Officer of Vilas Capital Management, is laying out why he thinks Tesla is going to crash in the next 3 - 6 months. Much of it is public knowledge; Tesla is consistently operating at a loss and burning cash, its efforts to mass-produce the Model 3 are failing badly, and it has been seeing a lot of turnover among its financial execs recently (never a good sign at a company). But this part was news to me:

However, it appears that due to past SEC investigations and current investigations (which terrifyingly have not been disclosed by the company), it will likely be difficult for Tesla to access public markets.

According to a recent analyst report, there have been 85 SEC requests for additional information and disclosures in the last 5 years.

This compares to Ford Motor Company’s total of zero over the same time frame. This means that Tesla is pushing many, many boundaries.

Please correct me if I'm wrong, but aren't publicly-traded companies required by law to disclose if they're under investigation? I would imagine that John Thompson knows what he's talking about. He and Zero Hedge would be exposing themselves to a libel lawsuit if they're wrong about the SEC claim.

originally posted by: AndyFromMichigan
Here's a disturbing article (thankfully non-political) that I spotted on Zero Hedge:

"Tesla, Without Any Doubt, Is On The Verge Of Bankruptcy..."

Basically, John Thompson, the Chief Investment Officer of Vilas Capital Management, is laying out why he thinks Tesla is going to crash in the next 3 - 6 months. Much of it is public knowledge; Tesla is consistently operating at a loss and burning cash, its efforts to mass-produce the Model 3 are failing badly, and it has been seeing a lot of turnover among its financial execs recently (never a good sign at a company). But this part was news to me:

However, it appears that due to past SEC investigations and current investigations (which terrifyingly have not been disclosed by the company), it will likely be difficult for Tesla to access public markets.

According to a recent analyst report, there have been 85 SEC requests for additional information and disclosures in the last 5 years.

This compares to Ford Motor Company’s total of zero over the same time frame. This means that Tesla is pushing many, many boundaries.

Please correct me if I'm wrong, but aren't publicly-traded companies required by law to disclose if they're under investigation? I would imagine that John Thompson knows what he's talking about. He and Zero Hedge would be exposing themselves to a libel lawsuit if they're wrong about the SEC claim.

That's going to put a big hurt on the industry in general if true. You're correct though that there has to be some truth to it or the story will have major backlash.

My guess is there will be some major bailout as Tesla is too big to just disappear.

a reply to: AndyFromMichigan


I don't trust ZeroHedge, I find them to be the InfoWars of the financial world, but it wouldn't surprise me if there were issues at Tesla with all that tax payer funded subsidy money flowing into the business.

a reply to: AndyFromMichigan
If I remember her correctly Tesla was on the verge of collapse some years ago. Then they brought Elon on to help over see a few things. I guess they didn’t learn anything. Sucks for Tesla Motors

originally posted by: AugustusMasonicus
a reply to: AndyFromMichigan


I don't trust ZeroHedge, I find them to be the InfoWars of the financial world, but it wouldn't surprise me if there were issues at Tesla with all that tax payer funded subsidy money flowing into the business.

There is NO taxpayer funded subsidy money flowing into the business. The subsidies go to the consumer in the form of a tax credit to effectively lower the price of the car. When they reach 300,000 sales (My number may be wrong, but that's the idea) the credit ends. The point is that Tesla does not RECEIVE ANY MONEY from this tax credit. It's an incentive for the buyer. Tesla did take a government loan years ago, but they paid it back early and with interest. The taxpayers made several million dollars on that deal.

a reply to: AndyFromMichigan

The operating at a loss and burning cash is nothing new, nor the ignored SEC requests for Tesla. You can thank the Obama admin for being easy on this fraudsters company over the last 8+ years and allowing them to commit accounting fraud without penalty. It has been known in the financial world for some time that this company has been on the edge of bankruptcy for some time and their accounting acrobatics is the only thing keeping the in the red.

From what I read they have been transferring money from the battery company and other companies (maybe Space-X??) and doing all kinds of odd things to make Tesla look profitable. Only thing is, if they have down months or cost over runs, it hits them really hard b/c the way they are operating.

Look up people who are shorting Tesla and see what they say. Some have been waiting to pounce for some time and were pissed at the last Admin for "proping" up the company either financially or by lax oversight.

a reply to: schuyler


I should have been clearer, I was referring to all of the units owned/managed by Musk.

Elon Musk's growing empire is fueled by $4.9 billion in government subsidies. Older story but the money went to them.

originally posted by: Vasa Croe

originally posted by: AndyFromMichigan
Here's a disturbing article (thankfully non-political) that I spotted on Zero Hedge:

"Tesla, Without Any Doubt, Is On The Verge Of Bankruptcy..."

Basically, John Thompson, the Chief Investment Officer of Vilas Capital Management, is laying out why he thinks Tesla is going to crash in the next 3 - 6 months. Much of it is public knowledge; Tesla is consistently operating at a loss and burning cash, its efforts to mass-produce the Model 3 are failing badly, and it has been seeing a lot of turnover among its financial execs recently (never a good sign at a company). But this part was news to me:

However, it appears that due to past SEC investigations and current investigations (which terrifyingly have not been disclosed by the company), it will likely be difficult for Tesla to access public markets.

According to a recent analyst report, there have been 85 SEC requests for additional information and disclosures in the last 5 years.

This compares to Ford Motor Company’s total of zero over the same time frame. This means that Tesla is pushing many, many boundaries.

Please correct me if I'm wrong, but aren't publicly-traded companies required by law to disclose if they're under investigation? I would imagine that John Thompson knows what he's talking about. He and Zero Hedge would be exposing themselves to a libel lawsuit if they're wrong about the SEC claim.

That's going to put a big hurt on the industry in general if true. You're correct though that there has to be some truth to it or the story will have major backlash.

My guess is there will be some major bailout as Tesla is too big to just disappear.

I don't see a bailout at all. I see them having to sell off parts of the company like the Gigafactory to a company like Samsung, Sanyo or whomever and other divisions like trucking (which is in a fledgling state)

I hope he fails and goes under. Space X too. Only because his Satellite Internet thing is a boon.

For those wondering about the accounting, they were doing something about buy backs, where they buy a 3 year old car (or whatever) and they put it on the books valued in parts, so if the car has 3,000 parts for a total dealer cost of $300,000 if bought from the dealership, they were valuing their inventory at $300,000 for that car, and they bought it back for say $23,000. That's what I've seen reported many times and is part of the reason the SEC has been looking into them. In this example, they make a quick $277,000 profit on the books, but it will never materialize as such. AKA fraud.

There were some other manuvering that I don't recall ATM, but it was similar as above but may have had to do with moving assets between companies to show positive net balance.

a reply to: schuyler

Erm, ...

Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times.
...
The figure compiled by The Times comprises a variety of government incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits that Tesla can sell. It also includes tax credits and rebates to buyers of solar panels and electric cars.

LATimes - Elon's Empire Fueled by Billions in Subsidies

a reply to: AugustusMasonicus

Beat me to it...

a reply to: RadioRobert


As a CIA chatbot I have a lot of free time.

originally posted by: Vasa Croe

originally posted by: AndyFromMichigan
Here's a disturbing article (thankfully non-political) that I spotted on Zero Hedge:

"Tesla, Without Any Doubt, Is On The Verge Of Bankruptcy..."

Basically, John Thompson, the Chief Investment Officer of Vilas Capital Management, is laying out why he thinks Tesla is going to crash in the next 3 - 6 months. Much of it is public knowledge; Tesla is consistently operating at a loss and burning cash, its efforts to mass-produce the Model 3 are failing badly, and it has been seeing a lot of turnover among its financial execs recently (never a good sign at a company). But this part was news to me:

However, it appears that due to past SEC investigations and current investigations (which terrifyingly have not been disclosed by the company), it will likely be difficult for Tesla to access public markets.

According to a recent analyst report, there have been 85 SEC requests for additional information and disclosures in the last 5 years.

This compares to Ford Motor Company’s total of zero over the same time frame. This means that Tesla is pushing many, many boundaries.

Please correct me if I'm wrong, but aren't publicly-traded companies required by law to disclose if they're under investigation? I would imagine that John Thompson knows what he's talking about. He and Zero Hedge would be exposing themselves to a libel lawsuit if they're wrong about the SEC claim.

That's going to put a big hurt on the industry in general if true. You're correct though that there has to be some truth to it or the story will have major backlash.

My guess is there will be some major bailout as Tesla is too big to just disappear.

No way are they too big to fail. They're a minor-league company compared to General Motors or Ford. They just have an Apple-esque cult following.

a reply to: DigginFoTroof

I imagine there must be at least one investigation over the fact that Tesla doesn't use Generally-Accepted Accounting Principles (GAAP) when reporting its results. That's always been a red flag for me.

a reply to: SR1TX
I don’t think you are fully informed on why he wants the sat net. But if you don’t like the guy I won’t try to convince you others wise. But cmon SpaceX too????

originally posted by: AndyFromMichigan
a reply to: DigginFoTroof

I imagine there must be at least one investigation over the fact that Tesla doesn't use Generally-Accepted Accounting Principles (GAAP) when reporting its results. That's always been a red flag for me.

Yeah, When I heard this I looked into it a good bit and it really threw up some red flags between the subsidies, tax credits and the accounting, all points to a "paper company" or house of cards. I wonder where all the money is really going.

There is a notorious short seller in So Cal that has shorted them and has written a good bit about the issue and has taken a strong short position from what I remember.

originally posted by: DigginFoTroof
Yeah, When I heard this I looked into it a good bit and it really threw up some red flags between the subsidies, tax credits and the accounting, all points to a "paper company" or house of cards. I wonder where all the money is really going.

If they really are 3 - 6 months from bankruptcy like the article claims, then I imagine a good chunk of that money is sitting in a numbered account in some offshore tax haven.

Musk merged Tesla with Solar City (which was run by his cousin) because Solar City was on the verge of bankruptcy. I suppose he could try to delay the inevitable by merging Tesla with Space-X, but I kinda suspect Musk has lost interest in his toy cars, and just wants to play around with his rockets now.

originally posted by: AugustusMasonicus
a reply to: schuyler


I should have been clearer, I was referring to all of the units owned/managed by Musk.

Elon Musk's growing empire is fueled by $4.9 billion in government subsidies. Older story but the money went to them.

Not much doubt that huge new factory cost a bomb...the cars seem to be selling okay though, quite a few around here even. The new 3 series though, it looks a duck as seen, they need to do something quickly with that!

www.msn.com... Curiously Tesla was not listed.