Thread by @CadgerGreg

1/ Short-sellers are the heroes of Wall Street. Seriously, I mean it! I began my career in the dot-com era smack dab in the middle of Silicon Valley. I spent eight years working as a financial consultant and problem solver for a multitude of startups, manufacturing and tech com.

2/ My first job was at the joint GM/Toyota venture that is now the headquarters for . My tenure in the Bay Area taught me that Silicon Valley is the land of greed and fairy dust. I mean sure there are some great companies and some of the technology is legit. But....

3/ as an investor do you think that any of those companies are about investors? Ask yourself who the pay structures of most tech companies are benefitting. Huge salaries, stock options which make secretaries millionaires and yes, no dividends. I can assure you that investors are

4/ just faceless bags of money. These tech moguls don't even blink when promising you a solar roof that doesn't exist, a car service which they know will never generate a profit or an office space company that can't bleed money fast enough.

5/ Stock options baby, it is all about stock options. The idea is to pump the stock at all costs and then dump the options as soon as you are in the money. This is the focus of tech. Unmitigated greed regardless of fact, sound business practices or securities laws.

6/ I saw the huge expense accounts, the options which are lavished upon you to make you an instant millionaire and yes, the ridiculous pump's pushing ideas that any freshman business student says , what, really, nah that is ludicrous. When the dot.com bust..

7/ happened I was sure in my naivety that heads would roll. I knew investor money, life savings for some were swindled with seriously flawed business models or vaporware was sold with expectations that would never be met. Lawsuits would happen, the SEC would drop the hammer, ...

8/ Boards of Accountancy would admonish and bar auditors who ignored financial failures to line their pockets with generous consulting fees. But guess what? No one went to jail, or was sued and the millionaires stayed millionaires and the investors lost everything.

9/ Then lucky for us those same ethically challenged techies got released into the world and got jobs in banking, government, etc. In fact, Silicon Valley was ground zero for the housing crisis. I happen to be friends with a gentleman who ran Countrywide's largest office

10/ right there in Silicon Valley. When he went to the powers to be to complain of fraud, he was fired. Again I waited for heads to roll. Instead the US gov performed the largest middle class rip-off of wealth in our history. Our homes gone, our wealth given to bail out rich

11/ banking executives who then went on to pay themselves hundreds of millions in bonuses. Guess what, no one went to jail. If it wasn't for Short Sellers made famous in Michael Lewis' book the "Big Short" most Americans probably wouldn't be aware of this fleecing.

12/ Short Sellers are the new Ahab the white whale, Elon Musk. Musk in my opinion is everything bad about Silicon Valley wrapped up in one package. Musk is a slick guy playing the long con. He is more than happy to rip-off the faceless bags of money we refer to as

13/ investors in this profession. He does what every good con does and plays on your two biggest weaknesses, greed and fear. Greed allows the average person to ignore all of the warning signs as long as financially you are doing ok. It is what allows Silicon Valley to be a

14/ cesspool of fraud. Ask yourself why locate a car company in Fremont? Surely, building cars in CA with high taxes, wages, excessive regulation is insane right? I mean that plant was empty because two of the largest car companies in the world couldn't make a joint venture

15/ work. Yet, Musk did it. He built great electric cars, improved the technology of cars and gave us all an option which at the same time helped the environment. We can all argue whether climate change is real or not but bottom line is we have one rock and this Is it.

16/ I saw the US before the EPA. Hell the river in Cleveland where I was born caught fire and burned for days. Yes, you heard right a freaking river caught fire! When it comes to the environment if there is some doubt let's err to caution.
Yet, this is where the long con gets you

17/ a second time...fear! The fact the Earth, Us and all of the Critters we love can be reduced or wiped out by an environmental disaster. Great we have a guy out in Silicon Valley who wants to offer us all solutions to help avoid that so let's throw money at him.

18/ So our governments offer tax incentives, rebates, subsidies. Investors buy bonds and stock with the idea that this genius in Silicon Valley has real solutions and real products we can all get behind and he is going to make us a ton of money.

19/ The story would probably end there if not for a group of short sellers who see the truth behind Tesla and like the characters in Lewis' the "Big Short" want the world to know about it.

20/ Our government has offered Elon Musk billions in subsidies in exchange for viable solutions to an environmental crisis. We in turn are okay with this because he is saving the world and has humanity's best interest at heart. In turn Elon runs a company which

21/ has never generated an annual profit. Yet, while taxpayers have funded his ventures Elon has become rich, wildly rich. In fact, Elon is the highest paid executive by a wide margin. Elon continues to claim he works without a salary and will be the last shareholder of Tesla.

22/ Yet Elon has never disclosed publicly that he has already mortgaged the large majority of his stock to fund a lifestyle of mansions and jets. Even better he has managed to do this while avoiding paying income taxes. Ironic that the largest benefactor of gov subsidies

23/ for clean energy, in a world where income equality is a real issue, is borrowing against his stock to avoid income taxes while taking billions in subsidies from the working middle class. More ironic that an advocate of clean energy has an enormous carbon footprint personally.

24/ In addition, did Elon commit fraud when he promised to deliver jobs to Buffalo in exchange for producing a solar roof in the state of New York? A solar roof which at the time did not exist & to this date is not being produced for resale. More middle class wealth extracted.

25/ Are regulators recouping the money? Short sellers have done the research and now we have more clarity on these subjects. CNBC isn't covering it. Analyst, no. Regulators, no. See most short sellers want fair markets, ethics. Responsible CEO's, regulations. Part1

26/ Short sellers tend to be the more astute of the two sides of a trade. There is logic behind this in the mechanics of the trade. Buy a stock long and technically you can hold the stock forever as long as the shares are not repurchased and the company doesn't go out of business

27/ Not the case for short sellers. If you borrow the shares short there is a borrow cost. In addition, unlike buying a share long where your loss is limited to your investment, theoretically short sellers can subject themselves to unlimited losses if the stock continues to rise.

28/ If you short via put options you limit your losses but are subject to time constraints. To be short you have to do your research. There is nothing evil about picking a stock to decline in value. It makes sense that after a decade long bull run,

29/and a lengthy period of QE by the central banks that asset prices are misaligned. The markets go up & they go down. Focusing on only the upside of markets can be narrow minded & a missed opportunity. I use short positions to hedge risk & reduce volatility in client portfolios.

30/ Shorts are not rooting against a companies employees. Most understand that real lives are involved. Most also understand that when information surfaces of fraud or evidence of a structurally insolvent organization it is their duty to alert investors. I feel short sellers

31/ are driven by the need for fair markets. If markets are stacked against the average person or companies are destroying investor capital through inefficiency investors need to know. Short sellers are not a source of FUD but a source of information that Investment banks are not

32/ Back to , a great example of this is Auto analyst Adam Jones, Morgan Stanley. In an internal call Adam piled on Tesla. Referring to it as a bankruptcy story, the Solar City acquisition as a controlled detonation and offered a price target of $10. Shortly after when

33/ needed to raise capital Adam changed his tune although nothing had fundamentally changed with Tesla over that short time period. Millions of dollars of fees were at stake after all, right. Adam didn't change his bear case target of $10 but raised his bull case target.

34/ Now that needs to raise capital again, Adam has once again raised his target on Tesla to $500 while leaving his bear case at $10. One, what kind of analysis has that much of a range. Two, don't kid yourself Tesla needs capital. The Y, Cybertruck, China and now Germany.

35/ Pretty sure MS is going to be involved in the next raise & Adam is covering his arse. If Tesla fails he can point to this $10 price target which reflects his internal communications. If questioned on why Morgan backed a raise he can point to his comments on CNBC and his $500.

36/ target while spreading misinformation so the average person can be fleeced for another tech billionaire and add to Wall Street greed. Short Sellers leaked the internal call and now you know.

37/ What about regulators? The SEC and DOJ are not going after Musk. He committed the largest act of securities fraud that I can remember and he received a fine of one-one thousandth of his wealth and didn't spend one minute in jail. Musk has made countless false claims

38/ regarding production milestones, products in development, the state of autonomous driving, one million robo-taxis, etc. Any and all of these acts would constitute the definition of fraud. Yet the DOJ doesn't prosecute billionaires for misrepresentation. These organization are

39/ understaffed and need to spend their time prosecuting slam dunk cases. Prosecuting a billionaire celebrity CEO with political connections is not a slam dunk case. The SEC and the DOJ are not looking out for the average investor. In fact their advice is do your own research.

40/ This is why Short Sellers are Heroes. Investment banks will mislead you for their own financial gain. Regulators are not out to help you and legislators well are legislators. Short sellers continue to show the facts regarding . Real information investors and the public

41/ need to know. Our capital markets should not be stacked against the average working person with a 401(k). Information good and bad needs to be made available to all investors. I fell short sellers analysis of Tesla is some of the most comprehensive and insightful of any stock

42/ I have researched. Short sellers should not be villainized by CEO's like Musk but their concerns answered with factual responses so all investors both long and short are adequately informed. That is the responsibility of the BOD, CFO and CEO is to keep investors informed.

43/ I personally question Musk's motivations. I ask myself do true social activist conduct and enrich themselves the way Musk has while CEO of Tesla. Commit fraud, have glaring accounting inconsistencies which go unexplained, mislead potential investors & make outlandish claims?

44/ Maybe, Musk needs this to stay motivated. Yet, I ask myself how many stock options did Mother Theresa need to help the needy. Martin Luther King during the civil rights movement. If the mission is about saving the planet then why the massive compensation package tied to the

45/ stock price which clearly gives the CEO the incentive to contiguously pump the value of the stock. In a world of vast income inequality, greed and corruption and a movement for reform underway, why does no one care?

46/stock price which clearly gives the CEO the incentive to contiguously pump the value of the stock. In a world of vast income inequality, greed and corruption and a movement for reform underway, why does no one care? , , #fintwit