TSLAQ

TSLAQ is a loose, international[1] collective of largely anonymous short-sellers,[2] skeptics, and researchers who openly criticize Tesla, Inc. and its CEO, Elon Musk.[3] The group primarily organizes on Twitter, often using the $TSLAQ cashtag,[4] and Reddit[5] to coordinate efforts and share news, opinions, and analysis about the company and its stock.[6] Edward Niedermeyer, in his book Ludicrous: The Unvarnished Story of Tesla Motors (2019), establishes the catalyst for the formation of TSLAQ in July 2018 to be the doxxing by a Twitter user[7] of Lawrence Fossi, a Seeking Alpha writer and Tesla short seller who uses the pseudonym Montana Skeptic.[8]

TSLAQ
$TSLAQ
NicknameTESLAQ
Named afterTesla Ticker Symbol + "Q" which is the NASDAQ notation for bankruptcy
FormationJul. 24, 2018 (Jul. 24, 2018)
TypeAnti-Tesla, Networked advocacy, Fraud deterrence, Pro-shorting
OriginsTwitter
Region
International
Key people
Lawrence Fossi, Randeep Hothi, Martin Tripp, @Paul91701736, @TESLAcharts
Websitehttps://www.tslaq.org

TSLAQ highlights what they claim to be a variety of dangerous, deceptive, unlawful and fraudulent business practices by Tesla.[9] On occasion, TSLAQ has exchanged online verbal hostilities with Tesla fans.[5] An online group,[10] TSLAQ's activities at times include taking aerial photography[11] and visiting parking lots used by Tesla for storage.[12]

Motivations

According to the Los Angeles Times, TSLAQ members believe Tesla is a fraudulent company and its stock will eventually crash, while also specifically claiming that Tesla is experiencing a "demand cliff" for its products and has had to regularly distort its sales numbers.[4] Their self-reported main goal is to "change the mind of Tesla stock bulls and the media."[4] Tesla was the most shorted stock in the U.S. in December 2020, with over $34.5 billion in shorted share value at its peak.[13] Business Insider described TSLAQ member activity as consisting of "exchang[ing] research, news articles, and sometimes outlandish conspiracy theories about the company" and that members are "betting on the company’s death and have found much success in irritating the billionaire executive."[14]

Tesla's alleged dangerous and deceptive business practices

Tesla under Musk's leadership has been involved in a number of lawsuits and controversies,[15] including investigations by the U.S. Securities and Exchange Commission (SEC) and the Department of Justice.[16] There is ongoing litigation alleging fraud and insider-dealing in connection with Tesla's acquisition of SolarCity in 2016, which is a major organizing point for TSLAQ members.[17] Elon Musk revealed a "solar roof" shingle in October 2016 that later turned out to be fake, as originally speculated by @TESLAcharts.[17][18] The group has also raised questions about accounting irregularities related to warranty reserves, accounts receivables, and regulatory credits.[19] Perhaps most infamously, Musk settled fraud charges with the SEC after falsely tweeting that he had "funding secured" to take Tesla private at $420 a share;[20] the incident raised questions regarding Tesla's accounting practices from TSLAQ and beyond.[21][22]

In terms of environmental safety concerns, Tesla has also been cited for numerous Occupational Safety and Health Agency violations at its factory in Fremont, California – far more than any other major U.S. auto plant,[23] and allegedly fired an employee for raising the issue, an act that Montana Skeptic described as "nauseating."[24] Tesla has been fined for numerous air pollution and hazardous waste violations,[25][26] while also allegedly attempting to salvage damaged battery cells to later be installed in cars, according to Martin Tripp.[27] Tripp's leaks highlighted how Tesla sold Model S cars in 2012 with a known battery design flaw that could cause fires.[28]

In terms of less life-threatening alleged wrongdoing or deception, Tesla has been repeatedly accused by TSLAQ and others of reselling defective "lemon" cars outside the US.[29][30] TSLAQ also highlighted a California judge's ruling in 2019 that Tesla had violated labor laws by unfairly disciplining employees who engaged in pro-union activity.[31][32][33] According to TSLAQ member @Paul91701736, Tesla has frequently failed to achieve overly optimistic production projections.[4] In 2012, Musk said "Tesla does not need to ever raise another funding round."[34] Since then, TSLAQ and others argue Tesla has had a total negative cash flow of over $8 billion and subsequently raised over $18 billion in additional debt and equity via subsidies and other means.[35][36] Musk planned to build a fully automated factory for mass production of the Tesla Model 3.[37] He called the factory an "unstoppable alien dreadnought", the "machine that builds the machine."[38] However, footage produced by a TSLAQ member of activity at the Fremont factory revealed that cars were largely being built by hand.[39]

Hothi allegations, crowdfunding and defamation lawsuit

In April 2019, Tesla filed a lawsuit and a request for a restraining order against TSLAQ member Randeep Hothi, also known as @skabooshka.[40] The allegations spanned two episodes:

  1. In February 2019, Mr. Hothi was found sitting in his car in the Tesla Fremont Factory parking lot. Security ordered him to leave at which point Tesla alleged he exited at high speed and nearly struck an employee.[41]
  2. In a separate instance in April 2019, Mr. Hothi spotted a Tesla on the highway fitted with numerous camera systems and personnel in the car and he proceeded to film the vehicle believing it to be demonstrating and filming Tesla's Autopilot capabilities. Tesla alleged that he drove erratically and dangerously.[41]

In response to the allegations, TSLAQ members led by Fossi ran a GoFundMe campaign that raised more than $100,000 for Hothi's defense fund. Tesla eventually dropped the lawsuit and the request for a temporary restraining order against Hothi after they refused to produce footage from within the test car on the grounds it "risked the safety and privacy of the employees involved in the case." After reviewing the surveillance camera footage of Tesla parking lot from the February date in question, Fremont police declined to press charges.[42]

In August 2020, Hothi sued Elon Musk for defamation over his accusations, in an email exchange with PlainSite's owner Aaron Greenspan, that Hothi had almost killed Tesla employees.[43] The presiding judge rejected Musk's motion to strike the lawsuit in January 2021, therefore allowing for the trial to move forward.[44]

Martin Tripp whistleblower case

In August 2018, Martin Tripp, a former employee at Tesla's Giga Nevada, tweeted photos using the TSLAQ hashtag claiming to show scrapped Tesla car batteries that had broken and defective cells. The photos were part of a larger leak from Tesla's internal manufacturing defects database where all production problems are logged, and were provided to support Tripp's allegations about "the safety and quality of Tesla's parts."[45] Tripp was fired from Tesla after confessing to leaking Tesla internal data to Business Insider, and was reported to the local police by Tesla's security department after they said they received an anonymous tip about Tripp planning a mass shooting at the facility. However, Tripp was unarmed when police confronted him; they determined the threat was bogus and Tripp was not dangerous.[46]

After Tesla filed a lawsuit against Martin Tripp for trade secrets and computer crimes violations, Tripp engaged in a countersuit with Tesla over the whistleblowing incident as a whole, which was funded by short-seller firm Cable Car Capital.[47] In August 2020, Tripp leaked confidential documents from Tesla v. Tripp on Twitter and in response Tesla "urged the Nevada court to sanction him."[48] Later in court, Tripp acknowledged intentionally violating the protective order after his lawyers withdrew counsel and he was ordered to pay Tesla $25,000 in attorney fees.[49] On December 1, 2020, the case was finally settled when Martin Tripp agreed to pay $400,000 in damages to Tesla.[50]

References
  1. Niedermeyer, Edward (August 20, 2019). Ludicrous : the unvarnished story of Tesla Motors. Dallas, TX. p. 108. ISBN 978-1-948836-32-6. OCLC 1089841254.
  2. Kolodny, Lora (February 1, 2019). "Anonymous Tesla short sellers who fly over its parking lots taking pictures of cars have a new web site". CNBC. Retrieved November 7, 2019.
  3. "Identify bots if you want to fix Twitter, advises Elon Musk". The Economic Times. January 18, 2020. Retrieved April 18, 2020.
  4. Mitchell, Russ (April 8, 2019). "Must Reads: The crowd-sourced, social media swarm that is betting Tesla will crash and burn". Los Angeles Times. Retrieved November 7, 2019.
  5. Katwalla, Amit (May 5, 2019). "Inside the obsessive Twitter turf war over Elon Musk's Tesla tweets". Wired. Retrieved December 19, 2019.
  6. "The Tesla sceptics who bet against Elon Musk". Bloomberg. January 22, 2020. Retrieved April 12, 2020.
  7. Lambert, Fred (July 24, 2018). "Tesla troll and short doxxed as heavily invested in oil industry, Musk reportedly calls his boss". Electrek. Retrieved January 6, 2021.
  8. Niedermeyer, Edward (August 20, 2019). Ludicrous : the unvarnished story of Tesla Motors. Dallas, TX. p. 107. ISBN 978-1-948836-32-6. OCLC 1089841254.
  9. "The Tesla Twitter war - charted". ftalphaville.ft.com. Retrieved August 18, 2020.
  10. "Drones and stakeouts: how Tesla 'haters' put pressure on CEO Musk". Reuters. August 29, 2018. Retrieved August 21, 2020.
  11. Mitchell, Russ (April 8, 2019). "Must Reads: The crowd-sourced, social media swarm that is betting Tesla will crash and burn". Los Angeles Times. Retrieved February 4, 2021.
  12. Niedermeyer, Edward (2019). Ludicrous: the unvarnished story of Tesla Motors. p. 107. ISBN 978-1-948836-32-6. OCLC 1089841254.
  13. Duggan, Wayne (December 21, 2020). "Despite $38.2B In Losses, Tesla Short Sellers Ramp Up Bearish Bets". Yahoo Finance.
  14. Ungarino, Rebecca (April 17, 2019). "Inside Tesla Twitter". Market Insider. Retrieved December 9, 2019.
  15. Greenspan, Aaron (January 7, 2020). "Plainsite: Tesla: Reality Check". Plainsite. Retrieved April 21, 2020.
  16. Goldstein, Matthew; Kelly, Kate; Flitter, Emily (September 18, 2018). "Justice Department Is Examining Tesla After Musk Comment". The New York Times. ISSN 0362-4331. Retrieved April 18, 2020.
  17. McLean, Bethany. ""He's Full of Shit": How Elon Musk Gambled Tesla to Save SolarCity". Vanity Fair. Retrieved April 18, 2020.
  18. "Elon Musk knew SolarCity was going broke before merger with Tesla, lawsuit alleges". Los Angeles Times. September 24, 2019. Retrieved April 18, 2020.
  19. "Tesla is nuts, when's the crash?". ftalphaville.ft.com. Retrieved August 18, 2020.
  20. "Judge deems Musk's 'funding secured' tweet false and misleading. A trial awaits". Los Angeles Times. April 15, 2020. Retrieved April 18, 2020.
  21. Mamudi, Sam; Hull, Dana. "David Einhorn Taunts Elon Musk, Revives Jabs at Tesla Billing Practices". Bloomberg. Retrieved May 7, 2020.
  22. "Drones and stakeouts - how Tesla 'haters' put pressure on CEO Musk". finance.yahoo.com. Retrieved September 10, 2020.
  23. Ohnsman, Alan. "Inside Tesla's Model 3 Factory, Where Safety Violations Keep Rising". Forbes. Retrieved April 18, 2020.
  24. Skeptic, Montana (March 30, 2020). "Tesla: Lessons From A Cage Fighter (NASDAQ:TSLA)". Seeking Alpha. Retrieved September 12, 2020.
  25. "Tesla touts its emissions-free cars; its factory got fined for polluting". SFChronicle.com. March 2, 2018. Retrieved April 18, 2020.
  26. US EPA, OA (April 1, 2019). "U.S. EPA settles with Tesla over hazardous waste violations at Fremont, Calif., facility". US EPA. Retrieved April 18, 2020.
  27. "Twitter Promptly Suspends Tesla Whistleblower Following Tweets About His Former Employer". Gizmodo Australia. August 16, 2018. Retrieved August 19, 2020.
  28. Lopez, Linette. "Leaked Tesla emails tell the story of a design flaw discovered in 2012 in the Model S battery that could lead to breakdowns and fires". Business Insider. Retrieved February 4, 2021.
  29. "Lemon Laundering? Tesla Also Resells Defective Buyback Cars Abroad". InsideEVs. Retrieved February 4, 2021.
  30. Greenspan, Aaron (January 7, 2020). "Reality Check: Tesla, Inc" (PDF). PlainSite.
  31. "Who is Elon Musk?". tslaQ.org - Crowdsourced Tesla Research. December 17, 2019. Retrieved September 12, 2020.
  32. Butler, Zach (September 30, 2019). "It's Not Just Quarterly Losses — This Is What Will Kill Tesla". The Fast Lane Car. Retrieved September 17, 2020.
  33. Henney, Megan (September 28, 2019). "Tesla and Elon Musk violated labor laws, judge rules". FOXBusiness. Retrieved September 17, 2020.
  34. "Tesla Motors Won't Need More Money, Says CEO Musk". Green Car Reports. Retrieved June 14, 2020.
  35. Collins, Jim. "A Brief History Of Tesla: $19 Billion Raised And $9 Billion Of Negative Cash Flow". Forbes. Retrieved June 14, 2020.
  36. "The Business of Self-Driving Cars: Interview with Russ Mitchell". Brulte & Company. March 17, 2020. 13min 20s. Retrieved September 13, 2020.
  37. Muoio, Danielle. "Elon Musk: Tesla's factory will be an 'alien dreadnought' by 2018". Business Insider. Retrieved June 14, 2020.
  38. Muoio, Danielle. "Elon Musk: Tesla's factory will be an 'alien dreadnought' by 2018". Business Insider. Retrieved July 12, 2020.
  39. Hull, Dana (January 22, 2020). "The Tesla Skeptics Who Bet Against Elon Musk". Bloomberg. Retrieved April 20, 2020.
  40. "The Tesla Skeptics Who Bet Against Elon Musk". Bloomberg.com. January 22, 2020. Retrieved February 4, 2021.
  41. Lopez, Linette (July 22, 2019). "Tesla Drops Suit Against Shortseller". Business Insider. Retrieved February 2, 2020.
  42. O'Kane, Sean (July 22, 2019). "Tesla drops lawsuit against critic after judge asks for evidence". The Verge. Retrieved November 29, 2019.
  43. Bruno, Bianca (August 7, 2020). "Tesla Twitter Critic Sues Elon Musk for Defamation". Retrieved August 9, 2020.
  44. "Musk Fails to Get Tesla Critic's Defamation Lawsuit Thrown Out". Bloomberg.com. January 28, 2021. Retrieved January 28, 2021.
  45. Lopez, Linette. "Ex-Tesla employee Martin Tripp posted dozens of photos that he alleges came from inside Tesla". Business Insider. Retrieved May 7, 2020.
  46. Hull, Dana (March 13, 2019). "When Elon Musk Tried to Destroy a Tesla Whistleblower". www.bloomberg.com. Retrieved May 7, 2020.
  47. Hawkins, Andrew J. (December 1, 2020). "Tesla whistleblower Martin Tripp ordered to pay $400,000 to settle hacking case". The Verge. Retrieved December 8, 2020.
  48. "Tesla Wants Ex-Worker Sanctioned For Tweeting Inside Info - Law360". www.law360.com. Retrieved August 12, 2020.
  49. News, Bloomberg (August 14, 2020). "Ex-Tesla worker agrees to sanctions over document dump - BNN Bloomberg". BNN. Retrieved August 16, 2020.
  50. Hawkins, Andrew J. (December 1, 2020). "Tesla whistleblower Martin Tripp ordered to pay $400,000 to settle hacking case". The Verge. Retrieved December 8, 2020.

Further reading
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