Tesla is Not Self-Sustainable and Elon Musk Wants to Quit Lying About It


  • Just days just after Elon Musk said Tesla will not elevate revenue, the firm turned to the cash marketplaces.
  • Tesla was often likely to be in want of extra hard cash to fund its long term products.
  • This is not the 1st time Musk lied about increasing revenue.

Getting the CEO of a publicly-listed firm is a difficult work. There are numerous procedures a CEO has to observe to maintain in line with securities guidelines. But the procedures really don’t appear to apply to Tesla (NASDAQ:TSLA) CEO Elon Musk  as he has been capable to get away with countless lies with impunity.

Tesla cultists rationalize Musk’s lies by proclaiming he’s “too optimistic.” An goal glimpse at Musk’s previous statements would tell you that numerous of his promises are blatant lies.

Tesla was Normally Likely to Need More Income

Tesla made a decision to elevate $2 billion in hard cash by a inventory featuring Thursday. The decision came just two months just after Musk said it does not make sense for Tesla to elevate extra cash.

Elon Musk said Tesla wouldn’t elevate cash just 15 days in the past. | Source: CNBC

It is feasible that Tesla’s expanding valuation adjusted Musk’s intellect. With the inventory investing at sky-large degrees, increasing revenue by diluting current shareholders is a economically wise decision.

But there are quite a few explanations why Musk should not be given the gain of the question below.

It was apparent that Tesla would want to dip into the cash marketplaces to elevate hard cash quickly. As I experienced formerly opined, the firm hardly ever experienced more than enough revenue on its stability sheet to fund its product or service pipeline.

Funding the Cybertruck, Robo-taxi, Model Y and meeting  personal debt obligations would have expected a good deal extra revenue than the $6.27 billion the firm experienced on its stability sheet.

So did Musk not know this? Of training course he did. He’s the CEO. Nevertheless he went forward and claimed increasing revenue does not make sense.

Musk has a History of Lying

If there is one particular issue Musk has frequently lied about, it is Tesla’s profitability and self-sustainability. Tesla has hardly ever been a self-sustainable firm. Ever since the firm went general public, it has claimed losses each 12 months and has relied on the cash marketplaces to plug the holes in its stability sheet.

That has hardly ever stopped Musk from proclaiming Tesla will hardly ever want to elevate extra cash. It seems to be one particular of his favored lies.

Back in 2011, when Musk was quizzed about Tesla’s hard cash placement and liquidity, he said:

Tesla does not want to at any time elevate one more funding spherical.

Then Tesla went forward and elevated $195 million just a couple months later.

The most egregious of the lies came in 2019. Just after Tesla posted its 1st-at any time consecutive quarterly income, Musk claimed on the earnings get in touch with the firm will sustain its profitability:

Not by a good deal, but I am optimistic about getting lucrative in Q1 and all quarters likely forward.

Retain in intellect the conference get in touch with took place one particular month into the 1st quarter. Just a couple months later, Tesla claimed a massive loss of $702 million.

So was Musk so shorter-sighted that he could not foresee a massive loss just after one particular-third of the quarter experienced by now handed? It is really not likely.

If you take into consideration the following e-mail that Musk despatched to a previous personnel just a couple days just after the fourth-quarter earnings get in touch with, it becomes apparent that Musk was indeed lying.

Musk claims Tesla is having difficulties not to eliminate revenue in a non-public e-mail. | Source: Twitter

Musk’s lies have gotten extra egregious at any time since he acquired a slap on the wrist for the “funding secured” fiasco. A CEO getting authorized to lie with impunity hurts the cash marketplaces by environment the incorrect precedent.

So for the sake of the cash marketplaces and Tesla, Musk requirements to end.

Disclaimer: The opinions expressed in this post do not always replicate the views of CCN.com.