re: NKLA down 11% today to $51/share

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Trevor is basically the opposite of Elon.

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Trevor says the stock is under valued and it loses. Elon tells everyone TSLA is overvalued at $770 a share and it straight lines to $1750 a share.

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I don’t particularly think either of them react appropriately, but I agree that they’re the opposite in many ways, which I think are even more important:

1. Elon graduated from Penn with a dual major in Physics and Economic and was set to begin his PhD at Stanford in applied physics. One has to be quite intelligent to attend those universities (2 of the best in the world), graduate with those majors, and just get accepted into those programs (especially his PhD). Plus he has the educational background that is useful from both the business side (economics) and the science side (physics) when it comes to running a startup tech company.

Milton attended undergrad Utah Valley University (then Utah Valley State College), which appears to be a pretty mediocre university (88% acceptance rate; 32% graduation rate; ranked 634th in Forbes national rankings) but attended dropping out to pursue a career in sales and marketing (which could be anything). Not that someone with the background can’t be successful, but it’s not really the background that one would expect, even compared to few super successful college dropouts who usually dropped out of too universities because they were starting that super successful company (e.g., Zuckerberg).

2. Elon was already a super successful tech entrepreneur, a cofounder of multiple companies that were either bought hundreds of millions (Zip2) or billions (x.com which after merging with cofinity became PayPal) of dollars. He also founded SpaceX before he joined Tesla.

Milton’s entrepreneurial background appears to be an alarm sales company that he alleges resulted in an exit payment of $300,000 (his partner says it was much less), an online classified ad business that failed, and an alternative energy vehicle business that was sued for allegedly failing to meets its obligations.

3. Elon has actually been a “visionary” multiple times (connecting business to the internet, online payments, private space flight), and Tesla (although he wasn’t a founder) was founded nearly two decades ago, well before elective vehicles became a viable alternative in any sense.

Milton doesn’t appear to have any new ideas and is trying to copy the success of Tesla and other EV companies/products. Not that a company can’t become successful building off of others; however, he started it right when Tesla was really becoming popular (particularly in the stock market), but as I said earlier, the most blatant ripoff, was the name of the company itself. Maybe I’m overstating the implications of ripping off the name, but it’s a huge red flag to me.

Regardless, some of his history seems to have been fairly unknown until the Hindenburg report, which is another red flag to me. He’s not some young prodigy (Zuckerberg, Gates, etc.) who started building that company realty and who isn’t old enough to have a history to judge; he’s not an Elon who had an impressive educational background already confounded a number of successful companies; or a Bezos who also had an impressive educational background and worked on Wall St. Instead he is nearly 20 years removed from dropping out of a mediocre university, and yet most of those years before Nikola were not very well know at all, at least until this report.

And as for this report. What I find particularly damaging about it is that the allegations themselves aren’t based on very complex financial scheme that is hard to determine whether it’s fraud (like Enron) or just a perfectly legal but complex method of accounting (like the GE “report” of their accounting last year seemed bad but maybe it wasn’t). In fact, the allegations themselves are not that outrageous and may not even be outright illegal (other than maybe misleading investors, although that’s still serious) in and of themselves. Instead they’re just allegations that it’s poorly run (especially the nepotism’s of putting his unqualified brother in charge of an important part of company) and trying to hide it (the truck not actually running, pretending outsourced products were produced in-house). It looks like a company that MAY WANT to do what it’s planned to do, but it is not capable of doing it so it’s trying to fake it.

I guess it may be a lot like Theranos, although maybe not to the levels of outright fraud and misrepresentation yet. But maybe a report like this earlier would have prevented Theranos from reaching those levels.