South Park says Elon is Going DownWed 06 Jun
Short selling is a frightening way to bet. Short selling, or shorting, is the practice of borrowing shares, selling those shares and then buying them back when, and most importantly, if they fall in price. If the value of the stock increases, especially if the price increases rapidly, the results can be calamitous. Nevertheless, the practice is rife, and with markets continuing to overheat globally, particularly in the US, the sharks have smelt blood and are circling.
Interest in the failing fortunes of the electric car maker Tesla total $12billion. Tesla manufactures less than one percent of the vehicles produced by General Motors yet the company’s value is greater. The uninitiated might well ask how this can be. Speculation is the how and the why.
The demise of Tesla could come in the form of collateral damage when the markets tumble. So it could hurt us all. If South Park is to be taken seriously as a commentary on how we live now, it is 22.3 years before a tragic subject becomes funny (watch episode two of the sixth season). Faith in EVs (Electric Vehicles) is waning, not because the deniers of climate change are winning but because the scientists are. EVs will only form a small part of a cooperative solution.
Tesla make a product for wealthy but mostly stupid people intent on convincing those of us who don’t drive Teslas that they care deeply – there’s a South Park episode for those people too (season 10 episode 2). The reality is that these vehicles do carry a massive carbon footprint by way of their manufacturing environmental cost. Even if we all dumped cars that are reliant of fossil fuels, the problem would not be solved. If speculation can be regarded as fiction, the environmental cost of Teslas should be regarded as fact. A financial crisis or bursting of a bubble occurs when facts catch up with fiction.
In the case of Tesla’s CEO, Elon Musk, the cult surrounding his personality is inescapable. Until recently this messianic mogul was a beloved media treasure. I can not be alone in wondering why – perhaps his association with PayPal (that trusted payment service we use to pay for junk on eBay) had something to do with it? Perhaps we missed Steve Jobs and wanted a new one? Or perhaps, we have a desire to believe the unbelievable.
But it’s time to face facts: we’re not going to Mars and we’re definitely not going to live there. (Yes, there’s a South Park episode covering this too). I suspect that most of the coverage, rockets firing cars with effigies of Elon in the driver’s seat, “plans” to colonise Mars, were reported by the easily impressed, and not the scientifically or economically astute journalists.
I expect the Tesla share price to be through the floor by next year. If you have the financial means I recommend finding out how to short-sell the stock. Bear in mind it’s a risky pursuit. The price is still holding strong fuelled by yet another press release from Musk. But a bet against Tesla is now the largest short position for any stock in the market.
Article by Long Shot.