Elon Musk Pulls An ICO

By Chris at www.CapitalistExploits.at

First up, this beauty received by one of the crew here at HMS Capitalist Exploits:

Marketing an ICO...


The Tesla ICO

Speaking of ICOs, last week something amazing, breathtaking, and revolutionary happened. We had another ICO... the very first of its kind.

An Initial Car Offering.

Pundits said it was an unveiling of the Tesla semi truck, but we now all know it was actually a thinly veiled capital raise.

Like many good things in life, this also began with foreplay.

Customers and shareholders are like women ovens - they need to be warmed up first.

So a few weeks before launching the ICO, the oven was dialled up:

Amazingly, I woke up this morning and, though having watched the unveiling, I looked around me and couldn't notice anything different (though my dog had this strange look in his eyes).

My mind was surprisingly still in my skull and had not been sent into an alternate dimension, which was disappointing as I was quite excited by the prospects of that.

Anyway, so once the engine was warmed, we were treated to the de-robing of this.

I thought at first I'd missed it. Then I watched it again. And no, I hadn't.

There was zero explanation of how Tesla would get all the dough to build this creature, where it would build it, and how (given the competition all have existing production plants, positive cashflows, dough in their treasuries, and access to credit markets) Tesla miraculously thinks that by the time it gets there it will have all of these things as well as the technology (that does not yet exist) to pull it off.

But then my nerves were calmed when they offered a warranty on the product. Wait, what? A warranty BEFORE they have a product? Killer!

I guess there's a first time for everything.

But that wasn't to be all.

No, then came the real showstopper as Elon went a step further in prostituting promoting Tesla. The fastest sports car in the world. And it may even just fly.

The kid in me did backflips. I sooo want a car that flies. Don't you?

But then I remembered that there was a time when I really wanted the Easter bunny to be real, too.

Now, being older and wiser, I realise that rabbits screw up your lawn and chocolates make you fat, and I want nothing to do with either of them.

What I would like to know is how they found the time to muck around developing both a sports car and a giant truck when they can't get a little Model 3 out?

Maybe that's just me being a grouch. Heck, what do I know about cars? Mine's 5 years old and smells of kids sweaty football socks which are buried in the back there somewhere. Thankfully, I didn't have to wait too long to figure out how they intend to fund some of this:

Now, when I saw this I'll admit to having made the sort of noise a cat would make if fed through a mangle.

I realised then that Tesla was trying to pull off an ICO. You see, the thing with 99% of ICOs is they're kinda like the deals on Kickstarter, which means that you don't actually get anything. It's more like a donation... or part of a rewards points system. You know, like your air points where you get to trade them for a flight to Greece for a dirty weekend away or to upgrade your flight to first class so you can sit next to all the folks who eat lobsters in their bathrobes.

This works spectacularly well for anyone uneducated in investment markets. And that, my friends, is perfect for Tesla. Because you know what?

That's about 90% of the population.

For the other 10%, here are some things to consider.

I'll gladly admit to not really knowing a lot about cars. I like them very much as long as they take me where I want to go and do all the cool things that modern cars do.

But try explain to me about all the ins and outs of the bits inside and my brain does that man thing - it stops working and starts thinking about sex.

But what I do know a thing or two about is numbers and markets. And frankly, when Musk starts talking about these things he may as well be speaking Nepalese and explaining how to cook a yak stew because it's all complete gibberish.

Tesla by the Colours

Last week when we were staring at Margot Robbie (don't tell me you didn't stare), and we said:

It was overconfidence that led the pointy-shoed suits on Wall Street to package subprime mortgages up, believing that a pile of isht when added to other piles of isht through the magic of diversification turns isht into non isht.

Like Margot explained in the Big Short (and bear with me as I'm extrapolating here): If we use Wall Street logic, you take the colour red and add it to more red... much more... you can get green.

So let's run through Tesla by the colours, and then after that we'll run through it by the numbers. Sounds fair?

  • SolarCity: Red
  • Gigafactory: Red
  • Model 3: What Model 3?
  • Model 3 in full production: Red
  • Tax credits: Green... ah isht... no, make it red


So red + red + red + red + red = Green.

Tesla by the Numbers

Let's take Q3 cashflow and toss in interest charges for 2017 (which is only fair — after all, someone has to pay them).

With that we realise that Tesla burned through about US$1.7bn or about US$500m a month.

Now, let's be super conservative and say capital expenditures remain at 2017 levels, which is absurd and impossible given the new initial car offering and that semi truck, too (it'll be far higher).

Anyway, let's give it to them.

Well, let's say they can find 1,000 fools buyers to drop a quarter million bucks on a pre-order for a car that they hope to receive some years in the future. Let's say they can do that.

That'll put US$250m into Tesla's treasury, which will buy them less than 3 weeks. Killer!

I'm going to go out on a limb here and say that in the first quarter of 2018 Tesla's going to lose US$1bn. Crazy, I know. How long for? It'll go on until it doesn't.

And here's something to think about...

Here's Venezuela's 5-year sovereign CDS spread:

You may ask, why Chris are you posting this in an article about Tesla? Well, Venezuela — like Tesla — made promises it couldn't keep.

What I'd really like to know from you today is this:

Tesla poll
Cast your vote here and also see what others think will happen

- Chris

“If you wouldn’t be short a multi-billion-dollar loss-making enterprise in a cyclical business, with a leveraged balance sheet, questionable accounting, every executive leaving, run by a CEO with a questionable relationship with the truth, what would you be short? It sort of ticks all the boxes.” — Jim Chanos


Liked this article? Then you'll probably like my other missives on

this topic as well. Go here to access them (free, of course).



rosiescenario Fri, 11/24/2017 - 15:33 Permalink

This reminds of a former car company that resorted to the sale of coke during its final gasps.....ironically, that car was used in Back to the Future.....and here we are with Tesla.

any_mouse roadhazard Fri, 11/24/2017 - 20:40 Permalink

Maybe Elon should concentrate on the goal of regular production of Model 3.

I suspect Elon has a short attention span and the Model 3 was so last month.

Add in hyper activity and Elon jumps from one project to another like a click on a web link on a broadband connection.

Elon could be a smart guy, one that has a lot of great ideas in his mind, but has trouble completing projects in the real world.

In reply to by roadhazard

DisorderlyConduct Fri, 11/24/2017 - 16:32 Permalink

If any other person on planet Earth spewed the verbal diarrhea that Musk does, they would rightly be locked up as certifiably insane.He's just that good of a salesman. But truth will win out.

Cabreado Fri, 11/24/2017 - 23:21 Permalink

In a false economy, there is much headroom to play...A false economy is enabled by a huge Volume of Entitlement and Ignorance.What's a "false economy?" It's one where money is printed at will, and rule of law is nothing more than an inconvenience.

shutterbug Sat, 11/25/2017 - 11:08 Permalink

That Truck will have Zero payload over needed miles within wanted time span...A failure from the start because current generation batteries isn't suited for the wanted amount of weight....Next gen might be, but this one isn't. Otherwise the Tesla personal cars would have a range of 1000++ miles...

maxz23 Sat, 11/25/2017 - 15:20 Permalink

1000 fools? try 10,000 @250K you dont think there are enough tools w 250k just drooling at the chance to own the newest greatest piece of icrap wherever it comes from in whatever form it shows up in?  watch glasses car triple distilled peruvian organic cocaine? genetically midwifed 2oz mini tea cup 3 colored salamander? 2000 dollars for a cell phone? there is so much money floating around in tight formation a 1000 buyers at 250k is nothing i guarantee you theyve already got 10000 pre orders(2.5billion). IF mitsubishi, kobe steel, GM et al hell the entire fortune500 can sell ghosts based on non-GAAP EPS, why not tesla?fraud and marketing for NOW is ALL there is;   IBG YBG  who cares about burning some billions in some quarter did WE GET THE SUBS?  thats all that matters;  only the ponzi matters is another way of saying it..which i think was the point that the author of this article was making...maybe i missed the point...  

Neochrome Sat, 11/25/2017 - 17:13 Permalink

Let's be honest here for a moment, shell we?First of all, American cars are shit, if you want a reliable car get a Toyota even if it's "made" in USA. Again, I understand that if you are on GM or Ford payroll or have financial interests tied to them it is ominous to see an American car maker actually get the world excited about it's products. Second of all, we can discern Musk's state of mind from a kind of industries he is trying to develop: solar, space, electric cars, futuristic trains and so on, if you are trying to convince me he is in it for the money you will have to do much better job. If anything Musk is the polar opposite to Bezos. Finally, let's have a national debate about where the money should be spent, paying MIC trillions of dollars for their planes that can't shoot nor fly and boats that can't stay afloat, or investing money into exactly what is Musk working on: space, solar and electric.

maxz23 Neochrome Sat, 11/25/2017 - 17:48 Permalink

what is an "american" car? chrysler/dodge does not make cars in the united states(just trucks). but maybe you still consider them "american made". as for gm/ford most of gms corvette design for example was stolen from bmw and others, most of their parts are foreign made, at least a good % of them. further, you say toyota is reliable? really? toyotas with takata airbags that kill you, made with mitsubishi parts and sealants that faked data and kobe steel that is very suspect because of faked quality data? those toyotas? (also aluminum, steel and sealants to companies like boeing but thats another story i dont care since i dont fly).  or maybe you like nissan? or maybe you like subaru? which also faked their data? you seem to love japan inc. your thinking is so cliche and old i bet you own an iphone. stop your billionaire dicksucking because it is 100% clear you cannot  "discern" shit,  let alone mindread someone else's motives from their marketing material. dumbfucking idiot.  

In reply to by Neochrome

Neochrome maxz23 Sat, 11/25/2017 - 18:05 Permalink

Reading is hard. Or perhaps you have a problem with comprehension? Whatever, here is a "too long didn't read" for you, if you need pictures you can visit the web site. But no bananas for you, you are a bad monkey. https://cars.usnews.com/cars-trucks/most-reliable-cars-cars-that-last-f… Reliable Cars: Cars That Last ForeverTo save you clicks here is the list:Toyota Highlander Hybrid Subaru Forester Honda Odyssey Toyota Prius Honda Pilot Lexus RX Hybrid Toyota Sienna Toyota RAV4 Honda CR-V

In reply to by maxz23

maxz23 Neochrome Sat, 11/25/2017 - 18:14 Permalink

youre so fucking confused you cant 'discern' your elbow from your asshole but youre right elon loves you, knows if youve been bad or good and wants to take you to mars with him on his solar rocket powered sleigh. you can keep sychopanting musk on the weekends eventhough he the king of vaporware. NOTHING is REAL, EVERYTHING AND EVERYONE IS A FRAUD, all that matters is MARKETINGonly the shiny image matters - simulacra is ALL there isand you are proof of concept.  

In reply to by Neochrome

HominyTwin Sat, 11/25/2017 - 23:12 Permalink

Has anybody watched the unveiling on youtube? So disgusting. All these fanboys yelling and whooping like he's a rockstar. If you can watch it without cringing, then you are made of strong stuff.