Ivar Kreuger and Elon Musk, Endgame Thread: As Ivar Kreuger approached the end, he embarked on even bigger deceptions to keep his plates spinning. He forged bonds to pump his stock. Ingratiated himself through loans to govs to get protection and an aura of legitimacy. $TSLAQ 1/11
Kreuger made promises before he knew how to accomplish them. He was extraordinarily lucky. He knew how to play the delay game w/ bureaucrats & regulators. He was a celebrity and had an excellent public image. $TSLAQ 2/11
His officers were hand-picked for their roles; board members' primary qualification was obedience. His accounting was intentionally vague, and he engaged in a wild variety of tricks to make up profits and cash wholesale. He made himself to become "too big to fail". $TSLAQ 3/11
His debts were in reality crushing. Some on Wall Street smelled the rot. But most, including huge numbers of retail hodlers, didn't know/care, because of his image and reputation. Even in the midst of the '29 crash, there was tremendous appetite for his cap raises. $TSLAQ 4/11
In the end, although parts of Kreuger's businesses did make sense, he was crushed by both a severe economic downturn and an inability to keep his plates spinning.

Today, Musk is building/planning to build a huge amount of additional capacity while heading into... $TSLAQ 5/11
...a global economic and geopolitical downturn. Musk's pyramid is straining to raise sufficient capital to sustain itself. Musk's pumps (Full Self Driving, rockets, and soon battery day) are rapidly losing their sheen. Besides competition piling on, the governments... $TSLAQ 6/11
...of his competitors (Germany, Japan, S. Korea especially) will take keen interest in regulating his products. Domestically, he has rubbed many on the left the wrong way, and many on the right lack interest in his offerings. His latest product is selling horribly. $TSLAQ 7/11
Sooner or later, one plate will crash. Then another, and another, in rapid succession. Who knows, will it be foreign regulators clamping down on his products? Will it be SpaceX failing to raise enough funds? Will it be a whistleblower finally tired of his sh*t? $TSLAQ 8/11
Or will it be Ivar Kreuger style, when the political and economic machinery that has enabled his fraud suddenly seizes up, he's run out of real cash, he simply can't lie his way out of economic reality, and the market calls his bluff? Who knows. $TSLAQ 9/11
But read The Match King if you haven't yet. The parallels are astounding (although Kreuger had better taste, was far more intelligent, and was a complete gentleman). Those in the know, know. But there's money to be made, influence to be peddled, so the show goes on. $TSLAQ 10/11
For the vast majority of people, though, Kreuger's lie lasted until the very end. So too will it be with Musk. The media will continue to fawn over his BS. Until it all comes down in one fell swoop, because Musk won't ever quit voluntarily. Trade carefully. $TSLAQ 11/11
You can follow @GretaMusk.
Tip: mention @twtextapp on a Twitter thread with the keyword “unroll” to get a link to it.

Latest Threads Unrolled: