1/ I think it is fair to say we’ve all been surprised by the volume of pumps coming from Fraud Boy lately. Almost non-stop and seemingly a new one every day.
Except it’s not new. At all.
$TSLAQ
Except it’s not new. At all.
$TSLAQ
2/ Here’s the chart from 11/2012 through 11/2014. Remember, in May 2013, the recovery in auto sales from depression levels was becoming obvious benefiting all manufacturers. But going stratospheric from $50/share required some help. Enter Musk. 
3/ During that first 300% runup from $50 to almost $200, we heard about “gross margins like Porsche,” “we don’t need any more money” after asset raises (and “we are production constrained, not demand constrained” after poor quarters).
4/ But, it was in 2013 that Musk first learned the value of the positive earnings surprise (and, a year later, the more valuable positive earnings leak) because the positive surprise in 2013 is partly what helped him propel his stock.
5/ This first big move (red circle) was driven by a surprise profit, Tesla’s first, on 5/8. Two wks later, an announcement they had been rapidly expanding a nationwide network of superchargers. Those events signified Tezzler was perhaps a force to be reckoned with.
6/ Before he was Fraud Boy he was Halo Boy and could do no wrong. The stock ripped for 9 mths. With the stock flying, he naturally added fuel to his fie-yah and dropped the ol’ Fake Battery Swap play on an adoring public in June. Amazing what people believed back then.
7/ In June 2013, we started to see the focus on gross margin as a way to hype the stock. “Exceeding Porsche.” And Musk the Cap Mkts Banker made an appearance on the heels of his recent large raise with this now familiar trope/lie: “we don’t need any more money.”
8/ Amidst all the non-stop hype and accolades, pockets of sanity could be found with respect to the company and its stock. People actually were using math back then. Like this guy.
9/ In mid-2013, Tesla’s ever escalating stock price was noticed, and journalists got into the game, including biographer and Bloomberg writer Ashlee Vance who visited the amazing factory (pre-tent of course. . .). Naturally, analysts also piled on w upgrades.
10/ What else could Musk do to keep the stock elevated? Why not hype Hong Kong in July? Good for 20 or 30 points. Until Hong Kong changed its subsidies of course, at which point Hong Kong sales went to zero. Note back then we had real players owning the stock, like Heebner.
11/ It’s now August 2013, the stock is still running, analysts are upgrading, is there anything more Musk can say to hype the stock? Why, yes, yes there is. How about exaggerated safety claims? (the same bogus claims Vance writes about in his book).
12/ And now that we’ve had a 300% increase in the stock, we should hype the capacity of Fremont while also enticing overseas markets. Noteworthy in retrospect he’s never come close to producing this number from Fremont, yet Europe and the Far East beckoned even then.
13/ While still in the salad days of August 2013, Tesla surprised again on earnings, “stunning Wall Street” with his manufacturing prowess. Then, for the first time, Musk mentions the “$35k car.” Hardy, har, har. Good one, Elon.
14/ Now we’re into Sept 2013 and the stock is still ripping, approaching $200/share. What else can Musk say to fool the gullible now and keep the momo train rolling?
How about self-driving cars?
That’s correct sports fans, he was talking that nonsense in 2013 too.
How about self-driving cars?
That’s correct sports fans, he was talking that nonsense in 2013 too.
15/ September 2013 is also when we see the gullible reaction to Musk’s ingenious resale guarantee program. Amazing in retrospect, now that we know how Tesla is choking on used cars and not selling so as to depress resale value.
16/ Note also how the Hyperloop started to make an appearance back then (go back through the headlines I posted). To me, what’s more interesting is not Musk’s hyping the positive but how he reacts to negative news. History has shown the old dog hasn’t learned any new tricks.
17/ It wasn’t all good in 2013. Signs of trouble began to percolate. They were brushed aside as minor, but the “R” word was actually mentioned for once. Wait until you see how he responds later in the year as these problems compound. . .
18/ In October 2013, a series of battery fires and investigations slammed the brakes on his stock and drove it sharply lower.
19/ Musk’s reactions to the battery fire were classic Musk. He “invited” the NHTSA in to investigate (because Tesla is such a stand-up company). Naturally the head of the NHTSA was unaware of the invite. Just like when they “volunteered” to respond to DOJ subpoena’s in 2017.
20/ Then there was a separate factory incident. But you know what you definitely shouldn’t do in the midst of bad news? Miss earnings. Which is precisely what Tezzler did in Nov 2013. You don’t think Musk learned a lesson here?
21/ And if you miss earnings and your stock is in a free fall because a poor design causes fires, you must come up with something to reverse the narrative on the bad earnings. The answer was not demand, but “production constraints.”
22/ While the real and earnings fires were burning, and production constraints analyzed, the street rallied to support the stock, and we see the first mention of. . . you guessed it, Apple should buy Tezzler.
23/ Reeling, Musk had to do something. So he leaked “strong 4Q Model S sales” later in November 2013 and caught a break from the regulatory gods.
24/ I’m running out of space but a few final conclusions. (1) The 2014 Pump-a-thon’s were equally farsical. Maybe I’ll do those later. (2) Not sure if it came through, but this was a way more volatile stock back then than today. (3) Ben Kallo actually downgraded it once.
You don’t need me to tell you that Musk has a good memory and his prior experiences always shape him (and so, therefore, he shapes his stock. . .). Back when I was growing up in South Africa, we called them frauds.
