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1/ A short thread on another epic fail by @WSJ in its $TSLA coverage. This time, on the latest capital raise. The reporting by @Sam_D_Goldfarb & @AllisonPrang is accurate & competent so far as it goes, but completely missed the big story, and missed several smaller ones as well.
2/ As usual, the dead wood copy varies somewhat from the on-line version. Both versions do a good job of the details of the deal, including the up-sizing and the shoe.
3/ However, neither mentions the investor conference that preceded the pricing and raise. In that call, Musk announced a radical, 180 degree pivot from $TSLA's longstanding "Secret Master Plans" that forecast profitability as an auto manufacturer and "integrated energy" company.
4/ On Thursday, Musk essentially told investors to forget gross margin. Forget delivery numbers (though Zach piped up to say $TSLA had just reaffirmed its wildly unrealistic Q2 and FY guidance). Forget solar. Forget battery storage.
5/ The path to riches now, said Musk, is our robo taxi business. In just one year, he said, $TSLA will have on the road 1 million cars with all the hardware needed for Full Self-Driving robo taxi work. (But, no, none with LIDAR, which most experts say is needed.)
6/ That's not all. Musk said that in a year's time, $TSLA likely will have all the software needed for FSD, too. Most experts, by the way, see software as the hardest part, and laugh out loud at the idea we're only a year away. Or, indeed, five years away.
7/ (The reporting of @jb_61820 and many others has been on top of this nonsense for quite some time: mindmatters.ai/2019/05/need-c…)
8/ Regulatory approval? It will happen in a blink, faster than you think, said Musk.
9/ Oddly, the $TSLA prospectus & other offering materials mention none of this. The words "robo taxi" do not even appear in those materials. Hey, no problem, right SEC? It's only written materials that need pre-approval, not fantasies Musk spins orally.
10/ While @WSJ completely whiffed on this story, @lorakolodny hit it out of the park with this timely & terrific report: cnbc.com/2019/05/02/elo…
11/ And @danahull, albeit in a less comprehensive piece, also had the story: bloomberg.com/news/articles/…
12/ The @WSJ reporters also missed another key angle: when you peel away the layers, this capital raise betrayed some curious weakness:
14/ There is, too, this more fundamental question that @WSJ never asked:
15/ With the exception of Cathie Wood @ARKInvest, every bullish $TSLA analyst premises his or financial model on the Model 3 catching fire (figuratively) and leading to massive profitability.
16/ Even Cathie Wood has $400 of value in her $4,000 target price for the success of $TSLA's auto business.
17/ But Elon just threw all that in the trash can. And with good reason. That story can no longer sell. You can write this down: $TSLA's Q2, Q3, and Q4 results will show Tesla's auto business is in an unstoppable downward spiral, with only massive losses ahead.
18/ I am looking forward to seeing how the Ben Kallo's & Colin Rusch's of the word deal with this stark reality. Will they now perform the Musk pivot, founding their bullish analyses on the fantasy FSD story instead of the failing $TSLA Model 3 story?
19/ That's TBD. Sadly, with its appallingly lame San Francisco bureau that has completely missed so much of the $TSLA story, @WSJ is likely to continue missing this next part of the drama as well.
@WSJ 20/ It pains me to see @WSJ failing so miserably on the most fascinating financial story of this decade. @CGrantWSJ has been on top of it, but his scope is HOTS and limited. The Journal is a paper I wouldn't be without. But in SF, it needs to clean the Augean Stables.
