Photo: Raphael Orlove/Jalopnik
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Tesla critics are having a rough time, Harley critics are having a slightly better time, and Trump is making things worse. All of this and more in The Morning Shift for Wednesday, Jan. 15, 2020.

1st Gear: You Don’t Have To Do Any Of This

Tesla’s stock has been soaring in recent weeks, as we reported yesterday, and it’s now worth more than General Motors and Ford combined. That doesn’t mean much in real terms, except to Tesla shareholders, CEO Elon Musk, and the people who have been shorting Tesla stock, or, in other words, betting that Tesla will fail.

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There are a whole separate set of people who are paid to grade stocks and advise investors whether they should buy, sell, or hold the stock. Bloomberg caught up with one of them recently and wrote up the interaction. The guy seems like he could use a vacation:

An analyst who picked an inopportune time to downgrade Tesla Inc. is expressing regret, giving Elon Musk credit, and yet still doubting the electric-car maker deserves such a rich valuation.

“I wish I hadn’t done it,” Joe Osha, an analyst at JMP Securities, said of his decision to cut Tesla to the equivalent of a hold from a buy on Oct. 3.

The move looked shrewd at first — the shares slumped 4.2% that day, after Tesla reported quarterly deliveries that fell short of a number the chief executive officer hyped the week before. But later in October, the billionaire shocked Wall Street with a profit, plus progress toward building a plant in China and bringing out his next electric vehicle, the Model Y. Tesla’s stock has more than doubled, closing Tuesday at a record $537.92.

“As an analyst, whenever you end up in this not-very-good situation where you’ve missed a big move in a stock, there’s always a temptation to just give in,” Osha told Bloomberg Television. But he’s reluctant to recommend the shares now. “I don’t think that I’m doing my job if I tell people to buy a stock at 20 times Ebitda,” he said.

“Ebitda” is an acronym for earnings before interest, tax, depreciation, and amortization, which is a measure of a company’s performance, and Tesla’s hasn’t been great. But short-term stock performance isn’t a good measure of anything, really, so I would recommend that Joe make himself a cup of tea and log off for a bit. It will all even out in the end.

Tesla’s current rally started around October, but as soon as June the stock was worth less than half of the $537/share it is trading at currently. If you buy into it, you’re buying into crazy, for better or worse. You should put your money into index funds instead.

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2nd Gear: Larry Ellison Is Happier With Tesla

The co-founder of Oracle spent $1 billion on three million shares of Tesla stock in December 2018, which was a hmm investment back then but now is worth about $1.6 billion, per Bloomberg.

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Other investors placed other bets:

At least one investor may have less reason to rejoice. Saudi Arabia’s sovereign-wealth fund hedged most of its 5% stake in Tesla through an arrangement with JPMorgan Chase & Co. last January, according to the Financial Times. That helped protect gains when the share price was below about $350, but the kingdom would have missed out on the recent rally, assuming the hedge remained in place.

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If you want to have less drama in your life, consider not investing in Tesla. Index funds are good. They are boring but reliable. And you can spend less time fretting over your investments and more time drinking tea, or going to the park, or checking in with your friends and family, who probably miss you. Life is short.

3rd Gear: Ghosn’s Wife Speaks

Reuters has the hot exclusive. Ghosn, the former CEO of Nissan, escaped Japan quite dramatically in an instrument case, you’ll recall.

Shortly after Ghosn appeared in Beirut, Japanese authorities issued an arrest warrant for Carole on suspicion of alleged perjury related to the misappropriation charge against her husband.

“What they’re accusing me of is a bit of a joke,” said the 54-year-old Lebanese-American national, who spent many years as a fashion designer in New York and whose children live in the U.S. city.

“I testified for hours and they told me you are free to go, and now, nine months later... this comes up. They are vindictive. This has nothing to do with the law.”

Carlos Ghosn was even more adamant. “I spent 18 years in Japan; I never suspected this brutality, this lack of fairness, this lack of empathy.”

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They seem extremely married.

Asked whether she would have dissuaded him to escape, Carole Ghosn blurted: “Yes!”

But then she paused, looked at her husband and added: “No. I mean, actually, let me rephrase. If you told me this at the beginning, I would have said No, of course not. You’re going to fight this and prove your innocence... But then, with time, we saw how the prosecutors were behaving... I said ‘Oh my God my husband is never going to get a fair trial’ and I was desperate.”

“I’m happy he did it,” she said.

4th Gear: Harley Shareholders To Get More Of A Say

Let’s return again to investing, which is apparently the theme of this column. Harley-Davidson, which makes extremely heavy motorcycles for baby boomers, has not been doing great in recent years, because extremely heavy motorcycles are not anything anyone under the age of 50 is interested in buying, because extremely heavy motorcycles are expensive and require a certain learning curve to ride and it’s much cheaper to just buy a used Harley and on top of all that some consider Harleys gauche, though that last opinion has always been a bit rude. You should ride what you want to ride.

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Anyhow, the company knows it’s not doing great. It’s now moving to let longstanding shareholders have more of a say in the company’s business, according to Bloomberg:

Harley-Davidson Inc. plans to grant long-term shareholders the power to directly nominate board members, a move that would allow greater investor influence at the struggling U.S. motorcycle maker.

So-called proxy access would give a shareholder, or a group of as many as 20, owning at least 3% of stock for at least three years the right to name as many as a fifth of nominated directors, the company said in a filing Wednesday. The measure still has to be approved at its annual meeting.

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This move would probably placate some restless shareholders, but the overall trend remains that Harley’s best days are behind it. I’m hoping that it’s upcoming slate of electric bikes will help things a bit, but if I’m honest with myself I just don’t see it rounding the corner.

5th Gear: Trump Still Working To Trash Fuel Efficiency Standards

I’m reading reports that this guy might be bad? Reuters says that the Trump administration will finally formalize fuel efficiency standards for automakers in the next couple months, less stringent ones than the Obama administration had put in place. This has been in the works for over a year.

The Trump administration proposed in August 2018 freezing fuel efficiency standards at 2020 levels through 2026, erasing the increases the Obama administration enacted, but officials will not finalize that proposal.

“We’re not going to be flat, as was proposed,” Acting NHTSA Administrator James Owens told Reuters in a recent interview. “We’re going to set standards that are reasonable and achievable.”

Several automakers told Reuters they anticipate annual fuel efficiency increases of about 1.5 percent, much less stringent than the Obama rules, but administration aides said the proposal, which is around 2,000 pages, underwent significant revisions.

EPA said the final rules “will benefit all Americans by improving the U.S. fleet’s fuel economy, reducing air pollution, and making new vehicles more affordable for all Americans.”

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You might remember that the reason for the Obama rules was to help “save the world from climate change” or some such. It’s a good thing that we figured that out and it’s no longer a problem.

Reverse: Sully

I actually was on the ground in midtown to cover this back then, when I was a reporter at The New York Post, but those articles seem lost to history/the internet. I remember it being bitterly cold!

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Neutral: Where Were You When You First Had An Opinion About Tesla?

I think the year for me was 2009. I was a much younger man then.

News Editor at Jalopnik. 2008 Honda Fit Sport.

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