Published on February 4th, 2019 | by Vijay Govindan0
In Tesla Earnings Week, The FUD Strikes Back — #Pravduh About #Tesla Report 22
February 4th, 2019 by Vijay Govindan
Last week was earnings weeks for Tesla. We are going to change up the report a bit this week and discuss the top 5 FUD headlines before going into the regular #Pravduh about #Tesla report. My “kudos” to CNBC for covering Tesla in every which way possible, some of which I didn’t know existed or wanted to exist. I’ll start with two CNBC pieces.
#1 CNBC: “Anonymous Tesla short sellers who fly over its parking lots taking pictures of cars have a new web site”
This headline put me in a slight, silent rage when I read it. Thanks goes out to Phil and Lora for giving this nonsense story airtime. To start, some questions:
- Who cares about anonymous shorts with a website?
- Why don’t they reveal their names like real journalists?
- Why is a major news site reporting on this and giving them importance?
- Does CNBC report when longs create their own website anonymously?
All their claims have been repeatedly debunked. The past is apparently forgotten and the goal posts moved. Some are still claiming Tesla bankruptcy at the end of 2019, after being so wrong in 2018. Elon had a great response to Phil’s tweet:
— Elon Musk (@elonmusk) February 2, 2019
That’s all that needs to be said, right?
#2 CNBC: “Tesla shares drop sharply after Musk announces CFO Deepak Ahuja is leaving the company — for the second time”
Why is it hard to say Mr. Ahuja “retired?” He retired the first time, Elon asked him to come back, he did, made a difference, and is now retiring following Tesla successfully navigating the Model 3 launch. Leaving can mean many things — retiring is very specific.
Some headlines said he was “leaving,” one even said he was “quitting,” and very few used to proper, specific term “retiring.”
#3 Bloomberg: “Suspect Tesla Has Much Less Cash Than Reported: Johnson (Radio)”
This is a repeated short/#Pravduh claim. Tesla is cooking the books, something is not right, something doesn’t add up. These are serious claims that can get an auditor fired and top executives in jail.
I gave Mr. Johnson the benefit of the doubt. I listened to the podcast. I can give some credit to the Bloomberg hosts (very rare), as they called out Mr. Johnson for saying he thinks Tesla is massaging the numbers. Mr. Johnson says Tesla will not have enough cash to make the March payment. I disagree. If there is fraud by Tesla, Mr. Johnson should pursue it or raise it with the appropriate authorities. But I think it’s simply a scandalous claim. There is too much on the line for Elon and Tesla to pursue such shenanigans. Elon and Tesla are committed to the long haul. Claims of fake numbers and fraud are getting old.
#4 Bloomberg: “Tesla 4Q 2018 Earnings: Incredible Shrinking Growth Machine”
Even though Tesla had record deliveries, it had challenges: Auto tariffs which led to lowering prices in China to not affect consumers, a lower Model 3 ASP from the introduction of the Model 3 Mid Range, very little revenue from ZEV and GHG credits. Through it all, Tesla turned a profit. It was the first time Tesla turned a profit for two quarters in a row. This is something “the experts” claimed Tesla couldn’t achieve, certainly in 2018.
Q1 2019 will be challenging. Everyone knows that. Many cars will be loaded on ships heading to Europe and China. On the conference call, Elon said they see deliveries growing 45% to 65% in 2019! This range includes if a global recession takes place. Although accounting profits may be shrinking in Q4 and Q1, Tesla continues growing the business. They expect profits and strong cash flow in Q2 through Q4. It’s better to have minimal accounting profits, pay little tax, and invest heavily in the business. Establish a strong position and accounting profits will come for Tesla.
(Narrator: This headline is sponsored by The Shell Oil Company. Stay tuned for more FUD)
— S Padival (@S_Padival) February 4, 2019
#5 Business Insider: “Tesla reportedly spent $700,000 on Elon Musk’s private-jet travel in 2018, including flights to move his jet from one side of LA to another”
Tesla is a multinational business. They have business in America, Europe, Middle East, Asia, and Australia. It would be odd for a CEO not to travel to attend ceremonies (China) or launch major new projects (Australia). What’s lost is how much CEOs in other companies in the same industry spend for travel. Is it more or less? How much more or less? By itself, the $700,000 tells me little. The context is missing. Without context, it just seems mean-spirited to drag Elon’s name through the mud before the Tesla earnings call.
Elon also runs SpaceX, of course, which has significant activity in Florida and Texas, as well as California.
On a final note, since Chanan was very busy, I took on #Pravduh this week to help him out. It is my final week working on pulling headlines for #Pravduh. Chanan will take over full time next week, except that I will vote and help with heavy weeks like this one. The reason is simple: I have many other articles to write on other Tesla and other cleantech topics.
Tesla is in a better place, more people are aware of #Pravduh and paying close attention to the media. I set out to support Tesla at a crucial time with this project. Thank you to all the wonderful people I have met and interacted with on the way! I hope my efforts have made a difference. It is still my goal to meet Elon, meet the Tesla team, and buy a Tesla one day.
Remember that each week we share the raw data (headlines and scores) for #Pravudh. You can scan through yourself if you want to double check our findings or just see the headlines. And you can check out our own Tesla stories for more context and comparison. For details about our methodology and broader context about this weekly analysis, see Pravduh About Tesla report #12.
The next matter on our itinerary is tracking the authors who covered this news. While the whole list is too long to put here since there are many authors who have written just one piece about Tesla, here are the authors that published more than 12 articles about Tesla since we started tracking on September 1st, ranked from least positive to most positive:
For this entire section, note: At major media outlets, there are often headline writers who control this part of articles, but we find tracking the authors is also interesting and potentially useful for considering what kind of stories the authors tend to write.
Core Tesla News Last Week
Adding onto the summary in the intro, here’s a summary of Tesla news and potential news ordered by day. You can consider for yourself what were objectively the important updates in the “Tesla story” last week.
- Tesla offers lower-priced versions of its Model S and X vehicles (29 Jan)
- Tesla showed a profit for the 2nd quarter in a row (30 Jan)
- Tesla revealed more Model Y crossover production plans (30 Jan)
- Elon Musk said $500 million was enough to get Shanghai production running (30 Jan)
- Elon Musk said Tesla might unveil an electric pickup truck this summer (30 Jan)
- Tesla CFO Deepak Ahuja retired (again) (30 Jan)
- Tesla said it could comfortably pay its $920 million debt coming due in March in cash (30 Jan)
Many “Sneaky” Headlines
- Watch three Tesla experts debate the electric car maker’s mixed earnings report (CNBC)
- Tesla has a ‘target on its back,’ says analyst (CNBC)
- Elon Musk: Demand for Model 3 is ‘insanely high,’ but cost is too high (CNBC)
- Tesla misses on earnings, but is expected to run another profit (LA Times)
- This time, Tesla fielded questions from regular investors, not just analysts and YouTube nerds (CNBC)
- Tesla offers lower-priced versions of its Model S and X vehicles after cutting production (CNBC)
- Tesla reports profit as issues stabilise (BBC)
- Do Tesla Supercharging rates cost more than gas? (Fox News)
- Tesla confirms big bond payment doable amid mixed earnings (Fox News)
- Tesla Profit Declines, but Musk Says Cash Position Is Strong (NYT)
- Tesla Posts Small 4Q Profit, Expects to Make Money This Year (NYT)
- Tesla Reports Profit For Second Straight Quarter, Says CFO To Exit (Forbes)
- Breakingviews – TeslaÕs 2019 becoming a matter of flourish or fold (Reuters)
- Tesla CFO leaves as automaker promises profits and cheaper cars (Reuters)
- Musk not worried about Tesla Model 3 demand, Wall Street thinks otherwise (Reuters)
- Tesla: Champagne Dreams on a Six-Pack Budget (WSJ)
- Tesla posts small 4Q profit, expects to make money this year (Washington Post)
- Big questions await Tesla and Musk on WednesdayÕs earnings call. Will stock analysts ask them? (LA Times)
The more these #Pravduh About #Tesla reports get shared online through social media, the more people will take notice. If there is an ongoing heavily negative slant about Tesla in certain outlets — even as Tesla has so much positive news to share — people should be aware of this and approach each new story with that in mind.
Again, here is the data from this past week in case you want to have a closer look at the raw data.
For details on our methodology and broader context about this weekly analysis, see our previous Pravduh About Tesla report.