Tesla And The Legacy of Enron

Nothing White about white-collar crime.


1
4 shares, 1 point

Not many people think about Enron these days. So many huge crimes coming out of wall street in these last few years have eclipsed them as the face of white-collar crime. But zero hedge makes a compelling case that Tesla is just a huge Ponzi scheme.
http://www.zerohedge.com/news/2016-05-24/tesla-compared-enron-ponzi-scheme-scathing-new-research-report

One of the points zero hedge makes is that Tesla would not exist if not for government subsidies. Clearly, a company like that would not have a good stock rating with a trump admin right? Wrong.
Morgan Stanley and Goldman both upgraded the stock based on retarded valuations.

Whats worse is Tesla has suffered a net income decrease over the years under musks leadership
09f8783200dc57c9f8cb6ad60f5a7a1d.png

Normally a minor 2 billion dollar loss in net income wouldn’t be a big deal until you look into VIEs
(variable interest entity).
a VIE is a term used by the United States Financial Accounting Standards Board to refer to an entity (the investee) in which the investor holds a controlling interest that is not based on the majority of voting rights.

Why is this a big deal? Well seeking alpha lays out a clear case
https://seekingalpha.com/article/4065125-teslas-hidden-4-billion-liability
The problem arises when you look into solar city being bought out by Tesla in 2016

  • “When Tesla showed SolarCity’s balance sheet to calculate a fair value in its prospectus, it forgot to mention that $4 billion of these assets were owned by VIEs and that the proceeds from these assets would be used to settle the obligations of the funds to its outside investors. From a liabilities perspective: apart from the $3 billion in debt, the company had another $4 billion in hidden debt which did not show up on the balance sheet. Either way, there was a $4 billion error in the prospectus in the calculation of the fair value of SolarCity.”

Should this info go into the mainstream public conscious  Teslas share price would plummet because it was overvalued by Morgan and Goldman.

This has all the underpinnings of an Enron moment. This could go very badly and take the entire green energy industry with it.
Our uncle wouldn’t want that. Would he?

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