Tesla Compared To Enron, Ponzi Scheme In Scathing New Research Report

Tyler Durden's picture

While Tesla's cars may or may not be the greatest thing since sliced bread, regular readers are well aware that our recurring complaint about the company is not about the quality of its product or its growth prospects as much as its incredulous, ostensibly ridiculous, non-GAAP accounting practices...

 

... as well as its relentless cash burn, which just last week forced the company to sell even more stock.

 

We summarized all of this recently, and as diplomatically as we could recently in an article titled "Tesla Releases Steaming Pile Of Epic "Non-GAAP" Gobbledygook; Stops Reporting Free Cash Flow."

Today, an independent third-party research boutique (in other words unlike Morgan Stanley or Goldman both of whom upgraded the stock to ridiculous valuations on laughable catalysts just hours before they underwrote a convertible and stock offering, respectively), Devonshire Research has issued a scathing report in which it compares Tesla's financing model to a "common Ponzi, Pyramid and Matrix scheme", and even goes as far as hinting Tesla could be the next Enron due to its opaque financial reporting.

Here is the executive summary, which explicitly lays out the similarities inherent in Tesla to the features "common in Ponzi, Pyramid and Matrix schemes":

Just to make its point, the report then immediately attacks Tesla as the potential next Enron or WorldCom due to "aggressive accounting."

 

Devonshire next points out something well known: without generous subsidies, Tesla would not exist, as a result a question is just how reliant is the company on ongoing state and Federal generosity.

 

The report then points out that as in any comparable Ponzi scheme, Tesla has to "introduce novel financial definitions", such as the following:

 

Most damning may be the next slide which explains why "to sustain its financing model, Tesla would need to court successively larger “loss-tolerant investors” or seek subsidies."

 

There is much more in the full report (link), whose warnings we are confident the market will ignore until it's too late at which point the cries of "who could have possibly seen it" will emerge.

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ZeroIntelligence's picture

But lithium batteries are good for the environment!!!  GAAAAAAHHHHHHHHHHH

kliguy38's picture

But Neon Elon's wife is so cuuuute...he can't be THAT big of a crook.....

StackShinyStuff's picture

meanwhile another sandpaper dildo, bleeding, ass-ripping, buttfuck of a rally underway...

ParkAveFlasher's picture

No worries, this will be long day, but not for the faithful. 

Dormouse's picture

Space X is fraud as well. Camera tricks and Chromakey.

weburke's picture

fighting ponzis can get you killed.

pods's picture

Guy here at work just bought a Tesla. You would think by the way he treats it that it was a Picasso on wheels. WTF?

He is a smarmy narcissist predator that likes to sniff the air around the young girls here. Probably packing a 3 incher too.  I laugh when I see him talk about it.  Of course he had to take it out for a company lunch and try and pack in as many youngin's as possible.

It's a car for Godsakes.  Maybe I just don't get it. But I have always seen a car as a way to go from point A to point B, or to move stuff, tow stuff, etc.

But I see the same look in his eyes as when I saw another dildo with an Apple watch on.  They get that dazed flood of dopamine look like when you were 14 and woke up in a sticky bed.

We are absolutely done for as a society, I just cannot wait for it to finally come crashing down.

pods

J Pancreas's picture

Tide Pods? Aqua pods? Pods.com? Pea pods? Just tell me!!!!!!! I can't take it anymore.

Mercuryquicksilver's picture

I lease a heavily government subsidized Chevy Spark EV. Also have a government subsidized electrical tier rate for charging it up.  I treat it like an elevator on wheels, gets me from point A to B. Like a golf cart on steroids, I beat the shit out of it.

 

I'd like to thank all you taxpayers who have made this possible for me. Thanks for paying your fair share so that I can commute nearly free..... and in the car pool lane.

 

DaveyJones's picture

Tesla is Enron

Bill Clinton is Cosby

Sweden hates Assange

dating blonde girls in Osby

Bumpo's picture

You could say that for all the stocks and their made up accounting gimmicks. Tesla makes a cool car, but sadsly so did Delorean. If only Obama had spent some of that Solyndra money properly ...

Yukon Cornholius's picture

I wouldn't say that. Once you get past the 'it's really quiet' gimmick, the shoddy craftsmanship starts the come through. Expensive junk cars for people who smell their own farts

Antifaschistische's picture

FYI, the "it's really quiet" thing has limited comparitive value.  Unless I'm in a dark cave, I can't hear my Lexus engine when it's running...and I've spent a few thousand miles in a Tesla since my best friend has one.  I like the car, but at Freeway speeds it is not quieter than a Mecedes, BMW, Lexus, Lincoln, etc. because 95% percent of what you hear is structural (through tires, frame and into the body) or wind noise.   The Tesla could be quieter, and so could a Mercedes, but the advancements in sound supression also come with added weight, and no one wants to add 50lbs of sound control material...except Rolls Royce.

mkkby's picture

Electric cars have NO FUTURE unless gas gets a lot more expensive.

This happens every fucking time.  Gas goes up, people stop buying big trucks/suv's.  Gas goes down, everyone forgets and buys big cars.

Sure a few stoopid libs want to show off their over-priced tesla.  But they'll never sell enough to be profitable unless gas gets and stays very expensive.

Government needs you to pay taxes's picture

If you can unleash the fearsome power of the Fed's Plunge Protection Team, your stawk can rise faster than Lazarus.  This is how fucking corrupt the .gov/financial system has become.  E Musk ballicks his way up the political pyramid with promises of green-energy, gets subsidies, and when the going gets really tough, gets the PPT to pump the fuck out of TSLA shares.  Alternate way to get there includes using a .Fed proxy hedge fund, like Citadel, to pump the fuck outta the shares.  What the assholes in DC dont yet understand if that when the system blows up some of them are going to lose their heads.

Mercuryquicksilver's picture

Bingo. PPT is a political and military arm of the government. Planners can't let their green baby die. TSLA long until .gov runs out of other peoples money.

venturen's picture

which former wife? He isn't married so they are available! Have a billion to buy her?

BorisTheBlade's picture

Had to google that. Babe filed for divorce ... second time. Neon Elon will need all the cash he can get.

cheech_wizard's picture

And now for your National Enquirer moment:

Remember that is his second wife Talulah Riley, the one commonly designated as "trophy" wife.

Which is completely understandable, as Justine (his first wife) pumped out 6 boys for Elon. (Yes, I know the first child died of SIDS, so don't consider me completely callous, that was a genuine tragedy, as are all infant deaths.)

Standard Disclaimer: And now it looks like the 2nd marriage is now on the rocks again. http://www.vanityfair.com/news/2016/03/elon-musk-talulah-riley-divorce-a...

Herd Redirection Committee's picture

Something about famous people, and family tragedies...   Now of course there is such a thing as an accident.

But there are also certain...  Sacrifices, asked of one, to join the really prestigious (and evil) groups out there.

Not saying believe everything you read, but this link has 80 celebs who have 'lost' loved ones:

http://mediaexposed.tumblr.com/post/5885817851/sacrifices

More Ammo's picture

It is so disgusting to me that that bastard elon has disparged the name of a great man and gets away with it.

He is on my list...

Government needs you to pay taxes's picture

Sharpen that stick at both ends!!!

JusticeTBuford's picture

Edison and DC power was far cooler.  And far safer.

cheech_wizard's picture

No sarc tag? 

Standard Disclaimer: Do you just like playing the idiot in public, or does it carry over into your private life as well?

JusticeTBuford's picture

I would assume you are not paying attention to the low voltage DC technological advances being made globally?

Borrow Owl's picture

Edison was a 2 bit thieving shyster and DC is impractical, unsafe and/or unworkable for many of the uses that AC is currently used for.

Mercuryquicksilver's picture

And Tesla got all his ideas from Gugliemlo Marconi .......

cheech_wizard's picture

New location for Tesla's statue...

http://wivb.com/2016/05/02/work-begins-to-move-nikola-tesla-monument-at-...

Standard Disclaimer: It was fine where it was on Goat Island, you stupid mother fucking Western New York cock suckers.

pods's picture

NY (upstate) is trying their best to arrange the deck chairs in the perfect arrangement. Because they all know that once that happens, all the people and businesses that were driven from NY will come back.

Every time I visit upstate, it gets a little less crowded, a little older, and the people a bit more beaten down.

pods

Badsamm's picture

Over heard one of my bus boys telling his friends Tesla was a buy.
We might be getting close

BorisTheBlade's picture

Should've told him to bring his shinebox.

maxamus's picture

They are better than what comes out of the tailpipe of an internal combustion engine.

Osmium's picture

The rate at which they burn through cash does not matter.  Taxpayer funds will be used to keep them afloat.

BurningFuld's picture

How can a company that trades on a public stock market use Non GAAP accounting? WTF????

Mercuryquicksilver's picture

Your avatar is nearly perfect, add some headlights.

lester1's picture

The people at Tesla are masters at cooking the books and hiding debt off the balance sheet.

 

SEC looks the other way at the orders of Obama.

venturen's picture

they take credit for what is basically a toyota. The manufacturing manager and factory and parts all came from Toyota...with the assembly machines...and cash!

Musk is a showman....that is it

LawsofPhysics's picture

Yes, but isn't this the case for every single fucking primary dealer BANK?!?!?!

Remind me, what do all those paper-pushers actually produce in order to justify their compensation again?

FUCK EM! get long sharecropping and GUILLOTINES!

nibiru's picture

Since we begin our journey here we are taught that bankers are good - they keep money and since we want money we have to go to them. Breaking the link between employer giving cash to the employee created 'bad employer he always abuses my rights, I'm so overworked' and creating 'good banker, at last I have my money on my account and he can give it to me' 

Bunghole's picture

That's just anti-american, gobblygook, fiction peddling reporting.

BTW, Free Jon Corzine.

venturen's picture

so what Obama and democrats likes Tesla and that is all that matters. Bet the Clinton Slush Fund has a piece of the action.  If those enron texas guys had purchaed better politicans they would be like Blankfein. There is no more rule of law. Heck Corzzine will be named CFO. 

nibiru's picture

Janet! Call Janet for help! She can PRINT MONEEYYYYY. And Obama will drop few likes and tweets - it's all gonna be good guys, don't worry

Grandad Grumps's picture

Ummm ... and companies such as Facebook and LinkedIn have not?

Infield_Fly's picture

We companies like BMW and Mercedes are selling an equivalent at half the price, you know that Tesla is a fuck shot!!!

 

Lots of sheeple still lined up to buy this Tesla crap.

Government needs you to pay taxes's picture

TSLA is effectively backed by the full faith and credit of the US taxpayer (which isnt worth very much these days), plus the killing power of US .mil.

LawsofPhysics's picture

Moral hazard on a scale the world has never seen before!

Tell me, why can BANKS use "mark to FANTASY" accounting?!?!?

If those fuckers can, then EVERYONE CAN!!!!!

Again, at least Tesla makes a REAL PRODUCT!!!!

Seer's picture

EXACTLY!

And I'm not defending Tesla or their products at all. (but I agree that at least they provide something other than paper, though it's for mostly rich people, in which case it comes back to pretty much the same thing)

Moral hazard was long ago made SOP.  Even the origins of modern banking are based on it: when your economic model is based on an improbable basis of perpetual growth then everything is ripe for abuse - out economic model/basis is premised on a PONZI!

HenryHall's picture

Agreed.

Tesla may have conducted their business wrongly.

But at least they are making a real product. Not a financial instrument or a piece of "social engineering".

So they deserve to be cut a bit of slack for doing real research and development and production engineering.

VW would do well to buy Tesla and its technology and give up on distributing cars into a rigged market.