Elon Musk a has long track record of being long on promises and short on deliveries - literally and figuratively. His motive, as has been self-professed repeatedly on Twitter, is to torment short-sellers by driving the stock higher with fraudulent tweets. But underlying Musk's garish bravado and overtly fraudulent financial reports is a business operation that, by all indications, is slowly disintegrating.
Musk has ushered in the long-awaited introduction of the $35,000 Model 3 with a tweet two days earlier aimed at pushing the stock higher to squeeze short-sellers. Musk's highly questionable tweet tactic drove the stock price up $21 over two days. The stock did a $10 belly-flop when the Model 3 announcement hit the tape, accompanied by an announcement that Tesla was cutting the size of the workforce for the 3rd time this year and would transition the sales operation to online-only.
While Musk spends an inordinate amount of time scheming to squeeze short-sellers, Tesla's business operations and financial flexibility is getting squeezed by reality. All Ponzi scheme's eventually fall prey to the laws of economics. Musk's Ponzi has been proliferated by a financial system flooded with printed money and by a Government that no longer applies the Rule of Law to billionaires with the ability to buy protection from regulatory enforcement.
Arcadia Economics' Chris Marcus and I spent some time on Wednesday discussing the similarities between Tesla and Enron and Elon Musk and Bernie Madoff: