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Is there any truth behind this story?

Is there any truth behind this story?

Wonder why the stock is down today? Looks like following news is the contributor.

http://www.powerlineblog.com/archives/2013/01/lawsuit-alleges-cronyism-i...

anyone knows if it has any legs?

mthanos | 11 janvier 2013

This is the second time since before the election where Fisker and Tesla are referenced in the same sentence and claimed they are both failures. Clearly Fisker has not been successful, but clearly Tesla has.

And I believe it is the role of government to help a new industry (not just a company as is alleged) out when that industry's goals are aligned with the public's best interest. It sounds like the Plaintiff in that case is mad they did not receive funding. But when their are limited resources you cannot back everyone. We hear the government should not favor one company over another, but when doing the due diligence of deciding if the loan or grant is well placed, there obviously will be winners and losers.

And the money Tesla received is a loan not a grant. The taxpayers will not be out a single dime, quite the contrary.

ghillair | 11 janvier 2013

I don't think the article has much effect on TSLA, they are named as a defendant. The loan has been made and Tesla is on schedule for paying it back. As long as Tesla does not miss a payment there should be little effect on the stock.

The latest report on short interest show that there were 2.2 million few shares short at the end of the year compared to mid December. I suspect that there were some fund managers that did not want to show a short position on their annual reports that cleared their positions and are now selling (short) again today. Today's activity was a large drop on heavy volume in the first half hour followed by more normal volume and a partial recovery in price.

http://www.nasdaq.com/symbol/tsla/short-interest

fluxemag | 11 janvier 2013

I can't believe I just clicked a Powerline link. Idiots.

Epley | 11 janvier 2013

It's a sad commentary on our system if drivel like that can affect the share price of a company.

shop | 11 janvier 2013

I don't think it affected the stock price. And powerline has it wrong, they shouldn't be lumping tesla and fisker together, or for that matter alledging cronyism with no proof. And I hate lawsuits like that. You go asking for money and then sue when the investor declines to give you money?? That company has just sealed their death warrant. No one will ever invest in them again. If they really had great technology, they could have found investors other than the govt. Btw their awesome technology was to build a plastic composite SUV that weighs 1400 lbs(!) and would recharge via drop in battery replacements. Ummm, yeah right.

sergiyz | 11 janvier 2013

They are already out of business, just trying to collect some money out of thin air.

GoTeslaChicago | 11 janvier 2013

Considering that the loan program was started by the Bush administration, saying that it's purpose was to fund Obama cronies sounds like another of those tinfoil hat conspiracy theories.

And I suppose that Ford, and Nissan who together received billions under the same loan program are controlled by Obama cronies too?

djp | 11 janvier 2013

As I recall Ford took no stimulus money

David70 | 11 janvier 2013

Shop,

That's probably why they claimed a $20k price tag. No batteries included, and even with the low weight, what was the range expected to be? I gave up reading about 3/4 the way through. They might have a better case if they didn't include political accusations.

It makes me suspect their claims are more politically motivated than actually expecting to get any compensation.

TikiMan | 11 janvier 2013

Odd considering the DOE loan program was created under G. W. Bush.

BYT | 11 janvier 2013

Like that article, we should also be careful of who we accuse of what, it's true, Ford didn't accept money and has been responsible, maybe not at producing green cars until it was too late in the game, but financially speaking.

GoTeslaChicago | 11 janvier 2013

djp,

It wasn't bailout money, it wasn't stimulus money, it was the Advanced Technology Vehicles Manufacturing Loan Program. Ford got $5.9 Billion.

http://reviews.cnet.com/8301-13746_7-10271057-48.html

DouglasR | 11 janvier 2013

Powerline is a right wing rag.

Brian H | 12 janvier 2013

GTC;
Right, I was about to specify that. A contracted loan with specific milestone targets. Fisker failed to meet theirs and was cut off.

Brian H | 12 janvier 2013

ghillair;
Liquidating short interest consists of buying, not selling. I think it was profit-taking.

trydesky | 12 janvier 2013

+1 DouglasR - Powerline is a right wing rag.

"There is no reason why the government should be in the business of favoring some private companies over others"

Ummm, yes there is. if a legitimate company is helping the USA become oil independent, than that is in the best interest of everyone.

Tâm | 12 janvier 2013

If the government wants to win the hearts and minds of the people, it needs to involve in "green energy."

Who created the EPA Environmental Protection Agency? Republican party president Nixon!

Who created the Advanced Technology Vehicles Manufacturing Loan Program? Republican party president G. W. Bush.

Keep embracing the oil, as the Republicans distance themselves from environmentally friendly cause, the party will have a difficult time to be taken seriously.

jchangyy | 12 janvier 2013

Many sensible republicans do support the environmentally friendly cause--Huntsman, etc.

It's the right wing nuts who stir up all the crazy theories.

Just watch Piece Morgan interview with Andrew Jones.

It only takes one drop of ink to muddy the waters.

jchangyy | 12 janvier 2013

Oops...Piers Morgan vs. Alex Jones

GeirT | 13 janvier 2013

Staying out of US politics, as it is close to incomprehensible for a foreigner like me, and having read the entire lawsuit in detail - it reads like thriller - I would say if only 10% this is right DOE and Mr. Chu is in for some hard times. Tesla having benefited from its political connections (if any?) is not really an ssue. Merely an example. It is the alleged favoritism by DOE that is in the firing line.
I have no ethical problems from this not to enjoy immensely the day that my P85 shall arrive - whenever that may be, in 2013 I hope!

Flaninacupboard | 13 janvier 2013

It sounds like "They're doing what? A no-name company making a plastic SUV from off the shelf parts that weighs half what a Prius does? And they don't have a working prototype? Next!"

I think that's probably the right decision, that vehicle would just not be desirable.

shop | 13 janvier 2013

Yeah, that lawsuit is going nowhere. Both Tesla & Fisker were actual car companies that had built cars when they applied for their loans, while the plaintiff had a piece of paper describing what they wanted to build.

Neech | 13 janvier 2013

Tesla did a lot more with a measly $465 million than Ford did with a whopping $5.9 billion. My one and only Ford was an '85ish Aerostar and it was the car from hell. Would never buy another Ford again.

Timo | 13 janvier 2013

Ford has Focus EV which isn't a bad car. I actually wonder why people keep talking about Leaf, when that is better car IMO.

jat | 13 janvier 2013

@Timo - aside from the fact that you can't get an eFocus unless you are in CA, it wasn't designed as an EV and it shows -- particularly in the way the battery intrudes into the cabin.

Timo | 14 janvier 2013

I haven't seen that in person, but from the pictures it doesn't look any worse than gasoline Focus. It is a compact car, about the size I would like to have.

Availability seems to be the problem, it isn't a bad car, but now that I have searched the net a bit more information it looks like a greenwash-car for Ford motor company.

Flaninacupboard | 14 janvier 2013

Regular focus boot:

Focus electric boot:

And you lose the ability to do this (the best thing about hatchbacks):

jat | 14 janvier 2013

@Flaninacupboard - exactly. This was the real killer for me -- even if I could have bought one, I wouldn't have taken it over the LEAF because of this.

djp | 14 janvier 2013

And the LEAF is a mis size

djp | 14 janvier 2013

Ooops - that was mid size

andrigtmiller | 14 janvier 2013

One correction needs to be pointed out based on this thread. The loan program is still backed by the tax payer. If the company defaults on the loan, then the money is gone.

Just because its called a loan doesn't mean there are no tax payer dollars at risk.

First, the loan itself is funded by tax payers, and second, the tax payer absorbs the loses in case of default.

I personally would have rather seen Tesla use private sources for the loan, but based on their performance, and the great product they have created, this will at least be one case where tax payers (like myself), will actually benefit.

Just keep executing, Tesla!

bushman | 14 janvier 2013

I would love it if these forums could be a political free zone. Enough with the right/left bashing BS. This is about an awesome car. Let's keep our focus here folks.

shop | 14 janvier 2013

andrightmiller - I agree with you 100%, however I suspect at the time that Tesla got the loan, it was in the middle of the 2008 sub-prime market blowback and there may not have been many other private sources of money. Frankly, govt loans to satisfy some industrial policy goal isn't, by far, the worst use of govt money. Before you chopped the DOE loan program, there are quite a few other federal government programs and departments that I would put on the chopping block, IMHO.

Timo | 14 janvier 2013

That loan program is a smart one: if even one company succeeds (Tesla) then it pays itself back to taxpayers many times over. It doesn't matter that some of them fail, the money gone is teeny weeny portion of the taxes people pay.