Gordon Johnson Profile picture
"Derivatives, are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal”-W Buffett; tweets are not fincl advice
Kim Profile picture Andi Liu Profile picture 3 added to My Authors
23 Nov
1/5 Questions from my team on your NPV assumptions - we blv the answers are VERY important given your equity is 100% valued on your NPV assumptions as there there are no actual “earnings”, or even EBITDA at RUN. (1) As you are aware, your Callisto ABS currently has a default...
2/6... rate of 2.6% (in the best housing market the US has seen in decades); thus, why are you assuming, in your NPV calculations, all of your solar loans/leases have a default rate of 0% (the analyst at Kroll who rates your ABS paper has told us that he does NOT keep records...
3/6... on loans that re-perform, thus, while this is an answer we've heard provided, this can't be true); furthermore, the NOVA Kroll analyst told my team, in no uncertain terms, that the “majority of solar ABS loans that default do not re-perform”; so, why are you saying the...
Read 8 tweets
20 Oct
Questions from my team (given we are not provided the dial in number or a call back from mgmt ever): (1) can you explain how with 101.8K more cars sold in 3Q21 vs. 3Q20 and a reported $2.9bn improvement in COGS/unit sold in 3Q21 vs. 3Q20 your reported FCF is down -$29mn 3Q21 YoY?
(2) Can you explain why your other segments continue to show negative earnings (3Q21 Services & Other had GMs of -2% vs. -4% in 2Q21; 3Q21 Energy/Storage had gross margins of 0% vs. 2% in 2Q21)? (3) A/Rs were down a little, but inventories were up a lot; was there a fleet sale...
... reversal in the quarter? (4) A/Ps and accrued liabilities contributed a LOT to cash; when you stop expanding, will your cash flow stop? (5) Why is your cash balance down, again, QoQ, despite record sales?
Read 5 tweets
18 Oct
1/4 There has been a massive underinvestment in the industries that represent the things people consume due to the cost of equity in areas like energy generation, food making, clothing, etc. being artificially inflated (i.e., think 20-30% cost of equity currently vs. 7-9% in…
2/4… normal times); resultantly, the investment decision in these segments has demanded stock buybacks over reinvestment in the underlying biz. Consequently, due, largely to Central Bank manipulation of all stocks (w/ much of the new money creation going to asset managers like…
3/4… Blackrock/Vanguard, who allocate money virtually blindly with VERY little ACTUAL due-diligence), all equities are being bid higher, no matter what’s happening in the underlying business, driving up the cost of equity (& thus discouraging reinvestment in businesses…
Read 4 tweets
11 Oct
1/11 The China Problem in a Nutshell: Property has become too expensive in China - i.e., the price-to-income ratio in Beijing, Shenzhen, and Shanghai all exceed 40x, vs. 22x for London, and 12x for NY; the definition of unaffordable housing, according to The Urban Reform...
2/11... Institute, is a ratio of 3x. Thus, due to broad-based pressure, President Xi has begun to "prick" the property bubble in China in an effort to make things affordable for his population (which, by the way, saw a peak in working age folks - i.e., people between the ages...
3/11... of 15 to 64 - in 2015, and is expected to begin declining by 2030 [according to the World Bank]). The problem, unfortunately, is real estate construction accounts for ~29% of China's GDP, while China's property sector, alone, is ~20% of global steel & copper...
Read 11 tweets
11 Oct
1/5 China posted "catastrophic" property sales data for the week of 10/1-to-10/8, & with: (a) Evergrande missing a 3rd round of (offshore) bond payments today, (b) Modern Land asking investors to push back a $250mn bond payment due Oct. 25th by 3 months to "avoid any potential...
2/5... payment default", and (c) Xinyuan Real Estate proposing payment of just 5% of the principal on a note due Oct. 15 (which Fitch called a distressed exchange), all hell is breaking lose in the Chinese bond market. Stated differently, contagion is spreading beyond just the...
3/5... property development space. And, given local governments (i.e., LGFV) in China derive ~70% of their income from land sales, if problems in China's construction market begin to impact nominal land prices negatively, this could trigger a massive problem in the world's...
Read 6 tweets
9 Oct
1/4 You do great work, but I think you’re wrong here… let me explain; quantitative easing is actually a form of tightening (if banks aren’t lending more) in that: (a) it aggregates money at the commercial banking level, and (b) if: ▲ Assets (A) = ▲Reserves (R) + ▲…
2/4… Banknotes in circulation (BK) + ▲ Government deposits (GD) =, then rearranging the formula: ▲ (R) = ▲ (A) – ▲ (BK) – ▲ (GD); stated differently, using MATH, and by definition, banks CANNOT cause the amount of reserves at the central bank to fall by “lending them…
3/4… out” to customers. Thus, while banks have a TON of excess reserves, banks CAN NOT and WILL NOT lend out those excess reserves held at the Fed to non-bank entities.
 
For this reason, the more QE Central Banks engage in, the cheaper the money is for bank-to-bank lending…
Read 5 tweets
10 Sep
Cool. You didn't really address why you've had a total of 61 recalls vs. just 3 for the rest of the entire US motobike industry (i.e., 10 players combined), but maybe we can take this offline. However, is the below chart still accurate (based on your 2Q orders, assuming no new...
... orders, you've converted only ~12% of your pre-orders; if yes, can you understand why some may see your reported pre-orders as "sketchy")? Also, can you explain why on November 19, 2020 you announced a 90-day trial period with the City of Orlando Mayor Buddy Dyer’s...
... office as a potential first responder vehicle, which sent your stock price MUCH higher to $9/shr from $20/shr within 2 days; yet, a day before, on Nov. 18, 2020, the day before your Orlando 90-day first responder trial period was announced, Arcimoto filed a safety recall...
Read 6 tweets
10 Sep
$FUV Hey... @nardopolo... question... I know you vehemently denied the things in the Bonitas short report, done a while back (where they claimed, since Dec. 2018 you had 19 recalls); yet, according to NHTSA's website, you now have seen a total of 61 recalls, vs. a total of 3...
... recalls for the other 10 EV motorcycles currently avaiable from the other EV motobike makers out there (i.e., Harley-Davidson LiveWire + Zero SR/F + Lightining LS-218 + Eneergica Eva Ribelle + Lightining Strike + Monday Motorbikes Gen7 + CSC City Slicker +...
... Curtiss Motorcycles Zeus Radial V8 + Evoke Urban S and Urban Classic + Electra Meccanica Solo). That's 61 recalls for Acrimoto vs. 3 recalls for the rest of the entire EV motorbike filed (based on my calculations, and NHTSA's website). Are your bikes...
Read 4 tweets
8 Sep
"Goes for jugular"? Hahaha... what did they say that's wrong? Because US regulators do nothing to stop alleged abuses by TSLA does NOT mean the abuses aren't occurring. Maybe, @Reuters should stop doing "stories" on E. Musk tweets (word for word), and actual do some...
... journalistic digging to see if: (1) the allegations that 10 people have died relying on TSLA's autopilot tech are real tesladeaths.com, (2) TSLA has collected billions of miles of driving data as the company claims (ask where these miles are stored, and how they...
... are transmitted OTA real time for starters), (3) has TSLA invested anything to begin producing a "Model 2" car as claimed, (4) beyond the $3 of patents purchased from Springpower Intl. ahead of battery day, WHAT has been invested to make 4680 battery cells work, (5) Why...
Read 5 tweets
13 Aug
1/4 TSLA's market share in China is collapsing to both the big legacy vendor (i.e., BYD) and the new EV start up IPOs (i.e., NIO + Li Auto + Xpeng). While many are quick to point to TSLA's exports from China to Europe as a reason for this, TSLA isn't gaining share in the EU... Image
2/4... either. In fact, it's fair to say TSLA is maintaining JUST 6-7% share in the EU NEV market (from 22% share in 3Q19); keep in mind that TSLA exported just 8.210K MIC Model Y cars to the EU in July, or ~32.6K/yr (TSLA ships its full quarter's worth of demand from Shanghai... Image
3/4... in the first month of the qtr), meaning a 500K car/yr plant in Germany may be ILL ADVISED. While one bull argument is the dominant player (BYD in this case) in a rapidly growing market loses market share as competitors flood the space, the data simply does not agree... Image
Read 4 tweets
18 Jun
(1) It seems someone is aggressively using the options market to push TSLA's stock up today (i.e., buying likely worthless options that expire today). More specifically, today, someone brought 77.1K weekly TSLA June 18, 2021 $630 call strike options (which expire today)...
(2)... for ~$1.00 that have a delta of 0.231. So for $7.4mn they brought 77.4K, contracts, which is the same as buying 231 shares of stock at ~$624/shr and delta hedging it until today’s close. So, looking at one contract, they purchased 231 x $624 = $144K worth of TSLA...
(3)... stock for only $100 of margin. That forces buying of TSLA stock, using options that will likely expire worthless. That's what you called legal manipulation.
Read 6 tweets
26 May
(1) Why does ANYONE listen to the Fed's predictions? Why does @neelkashkari and his friends at the Fed control every aspect of the financial markets given they've been wrong at EVERY TURN? What do I mean? Well...
(2) ... here's the dot plot from 2012 where the Fed was wrong.
(3) And, here's the dot plot from 2014, when the rate hike optimism was quite high.
Read 6 tweets
19 May
@elonmusk @Tesmanian_com (1) No he's not. Not even close. He does not seem to understand the accounting for finance leases/principal repayments. Why? Well, Amazon, whom TSLA is often compared to, uses financed leases/principal repayments - i.e., defacto CAPEX - to fund its facilities (similar to...
@elonmusk @Tesmanian_com (2) ... what TSLA does). Amazon, IN THE FIRST few pages of ALL of its presentations, shows free cash flow ("FCF") less finance leases and principal repayments to show investors its "true" FCF. When applying Amazon's method, or "the gold standard", to TSLA the "true" FCF was...
@elonmusk @Tesmanian_com (3) ... very negative in 1Q21 (perhaps this is why TSLA raised ~$12.3bn last year, and will likely do multiple raises this year).
Read 4 tweets
29 Mar
@INArteCarloDoss Ask yourself this. What happens when the SPAC lockups expire w/ billions in shrs to be sold at ANY PRICE by the insiders/pumpers? Remember what caused the 2000 tech crash? SPACS, for the most part, are ponzi companies - selling $1 for $80c w/ a promise to make it up on volume.
@INArteCarloDoss (2) Carson and others told you GSX had issues for months. No one cared to do the work. Is the same thing about to happen with SPACS? Don’t know. But you can pull up with lock up expirations for SPACS with a simple Bloomberg query.
@INArteCarloDoss (3) Let me help with some "hard" evidence of what's to come...
Read 9 tweets
18 Feb
(1) @RudyHavenstein The GameStop/RobinHood issue in a nutshell: First, on Robinhood, the issue was one of undercapitalization (i.e., RobinHood did nothing wrong). So… when the volatility on GME at Robinhood picked up, as happens at any clearing house in stock that becomes...
(2) very volatile, the DTCC asked RobinHood for more margin to trade the stock (i.e., more money, or a margin call); RobinHood didn’t have the money, so all trading in the stock (both buying and shorting) was suspended; because selling the...
(3) ... stock doesn’t require more risk from RobinHood, this was allowed to continue. This happens all the time, and is perfectly NORMAL!

On shorting, and what happened with GME, first it’s important to remember that naked shorting was made illegal in 2009; thus, every...
Read 11 tweets
9 Jan
@NorthmanTrader Yes. It’s called gamma hedging. If you buy a $30 option on a stock that trades at $850 with a 0.50 beta, you pay $3,000 ($30 x 100), while the person selling that option to you has to buy: $850 * 50 = $42,500 in the underlying stock to fully hedge. This is why stocks are soaring.
@NorthmanTrader There was a natural cap on this kind of speculation before as banks would increase the borrow cost for the gamma options purchases as demand went higher. The Fed has stepped into this market, and taken borrowing costs LOWER. So now... activity in options has EXPLODED higher.
@NorthmanTrader So... now... instead of buying stocks... retail traders are buying options. And, so are the market makers. It’s completely out of control. But, recent Fed comments suggest they’re completely ok with this. And, Congress is completely asleep at the wheel.
Read 7 tweets