A Sinister Cellar Of The TSLA Short Story? | CleanTechnica

Predatory short sellers target financial and insurance companies, because they depend on the capital markets. Because Tesla is investing so much cash in future prospects — more than it can replenish from sales of Models S and X — it has become much like a financial company, and is vulnerable to short sellers and market sentiment (and market sentiment caused by short sellers). In Jesse’s view, the greatest threat to Tesla is not the legacy automakers or delays in Model 3 production. “It is the massive amount of capital betting against him steered by bad actors with malicious intent and an incriminating history.”

However, there’s a way out. If Tesla can start generating profit and positive cash flow, it will be able to finance its operations through earnings, and will be much less beholden to capital markets. “The way to break from the short sellers’ influence is by becoming self-sustaining,” writes Jesse. “When you no longer need to sell stock to survive, you don’t care how high or low your stock goes. When you no longer need to raise debt to survive, you don’t care which agencies short sellers can manipulate.”

This could be the reason that Tesla seems to have made achieving profitability a priority. Recent moves such as laying off large numbers of non-production employees and requiring Musk’s personal approval for major capital investments are aimed not just at stanching the flow of red ink, but at turning it black. “If Tesla becomes self-sustaining, the shorts would lose their effect and therefore lose their purpose. It is my hope that once this happens, the short interest will disperse and Tesla would be free from these attacks.”

via A Sinister Cellar Of The TSLA Short Story? | CleanTechnica