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Elon Musk Enron, WorldCom, Tyco, Lehman Brothers, And Valeant Versus Temporary Sellers

Whitney Tilson‘s piece of email to merchants discussing his free seminars in Asia and defending transient sellers from Elon Musk’s assaults.

Defending Short Sellers

1) I’m wanting forward to my barnstorming journey in Asia subsequent week, all through which I’ll be doing free investing seminars in Shanghai this Sunday (Oct. 14), Singapore subsequent Tuesday (Oct. 16), and we merely added Hong Kong on Thursday (Oct. 18). For individuals who or anyone you notice would like further data or register to attend, please click on on proper right here, proper right here or proper right here, respectively.

2) I was on Yahoo Finance’s lunchtime TV current presently, defending transient sellers in opposition to Elon Musk’s wrongheaded and self-interested assaults. Click on on proper right here to watch the 8-minute part.

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I argued that transient selling is healthful for markets, notably prolonged, complacent bull markets like this one, as markets need every patrons AND sellers.

Nonetheless it’s not all transient sellers Musk is attacking – merely people who dare to share their views and evaluation publicly. I really feel it’s notably important to encourage these brave merchants on account of they offset the incessant promotion of shares by managements (e.g., Musk) and Wall Highway analysts.

That’s why I’ve organized a singular conference devoted solely to transient selling, via which 20 good merchants share their favorite, actionable transient ideas. Our first one was an infinite success so we’re doing it as soon as extra on the NY Athletic Membership on Monday, Dec. 3 (for the first time, we’ll even be livestreaming it for a lot of who can’t attend in particular person). Additional data, along with an inventory of confirmed audio system, and registration hyperlinks are proper right here. The early hen value of $2,495 expires on Monday, so register now – and save 20% while you use low price code WT20.

Temporary sellers have confirmed, again and again (assume Enron, WorldCom, Tyco, Lehman Brothers, Valeant and Lumber Liquidators, which I uncovered), to be identical to the boy who says the emperor has no clothes – and Musk is wanting mighty naked correct now so no marvel he’s lashing out in opposition to people who are elevating official questions on fundamental points at his agency. They threaten the story he’s woven regarding the remaining story stock.

I really feel Musk is an unbelievable entrepreneur and visionary and have good respect for what he’s achieved at Tesla and far more so at SpaceX. Nonetheless he’s behaving in an increasingly erratic method that leads me to think about that Tesla should uncover a brand new CEO and let Musk be one factor like Chief Innovation Officer sooner than it’s too late. With virtually $10 billion in debt and an infinite cash burn, that’s smelling an rising variety of like Valeant, the ultimate good bull-bear battleground.

In my 15+ years of transient selling, it is almost on a regular basis the case that when CEOs assault transient sellers, it’s on account of they’ve one factor to cowl and the stock is due for a large fall (this assertion is bolstered by one look at which confirmed that such shares underperformed by 2% per month).

3) In sharp distinction to Musk, that’s how Netflix CEO Reed Hastings responded to the extended transient report I issued in Dec. 2010: Netflix CEO Reed Hastings Responds To Whitney Tilson: Cowl Your Temporary Place. Now. It begins:

A wonderful investor and an exquisite human being, Whitney Tilson these days posted an article about why he is transient Netflix (NFLX). Whitney, who’s a critical co-donor with me to structure public schools like KIPP, writes that he has misplaced money betting in opposition to Netflix, and that he is nonetheless transient Netflix in a large method.

At Netflix we principally consider developing our enterprise and letting the numbers do the talking. Nonetheless Whitney is such a big-hearted donor to causes that I care about that I am scripting this open letter for him to try to get him to cowl his transient now. My need is to increase his odds of incomes income subsequent 12 months so he can donate far more to the structure public schools that we every assume are important to our nation’s future. For the doc, I really feel transient sellers are a constructive drive in capitalism, and I acknowledge that CEOs are normally biased of their bullishness on their respective corporations.

Thank goodness I listened to him, in the end went prolonged the stock, and it was my largest winner ever. There’s a lesson for all transient sellers proper right here: if the CEO of a corporation you assault responds by calling you “an incredible investor and an exquisite human being,” cowl your transient place immediately!!!

4) For further on Musk’s misguided habits, proper right here’s Joe Nocera with among the many best articles I’ve ever be taught on him, What Steve Jobs May Say to Elon Musk. Excerpt:

Musk is 5 years older than Jobs was when he returned to Apple. He has completed some truly excellent points — further excellent than Jobs, while you consider it. He constructed one agency that not solely sends rockets into home, however as well as lands the first stage of the rocket on what portions to an infinite trampoline. It is an astonishing feat, one factor that NASA might certainly not do, and, on account of it permits the first stage to be reused, saves many of the worth of developing a model new rocket.

Listed beneath are Mark Spiegel’s suggestions on this textual content:

a) Jobs was a money-making SHARK: Apple was worthwhile every single 12 months (every sooner than his departure and after his return) that he ran it as a public agency (besides his partial return 12 months). Musk has NEVER run a worthwhile agency.

b) Musk is a pathological liar and security fraudster (going far previous the “420” tweet); Jobs wasn’t.

These are two very massive variations that do not have something to do with “maturity.”

5) Gabriel Grego uncovered the $1 billion fraud at Folli Follie at our remaining shorting conference – the stock was halted decrease than two weeks later and might certainly not commerce as soon as extra. He’s speaking as soon as extra at our conference on Dec. Three to point out what he ensures me shall be a superb bigger and additional actionable fraud. Proper right here’s a present article throughout the FT about what merchants can examine from this debacle: Folli Follie: $1bn of fake product sales, and what to check from the debacle

As soon as extra, you presumably can examine further and register for our conference proper right here.

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