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It found that 47 percent of small businesses reported that they had one attack in 2017, and 44 percent said they had two to four attacks.
The invasions included ransomware, which makes a computer’s files unusable unless the device’s user or owner pays a ransom, and phishing, in which emails that look legitimate are used to steals information. The invasions also include what are called drive-by attacks, which infect websites and in turn the computers that visit them.
Despite the prevalence of the data invasions, only about half of small businesses said they had a clear cybersecurity strategy, the report found. And nearly two-thirds said they didn’t bolster their security after an attack.
Hiscox estimates that seven out of 10 businesses aren’t prepared to handle cyber attacks, although they can cost a company thousands of dollars or more and ransomware can shut down operations. Cybersecurity tends to get pushed to the back burner while owners are busy developing products and services and working with clients and employees. Or owners may see it as an expense they can’t afford right now.
Some basic cybersecurity advice:
–Back up all of a company’s data securely. This means paying for a service that keeps a duplicate of all files on an ongoing basis. The best backups keep creating versions of a company’s files that can be accessed in the event of ransomware — eliminating the need to pay data thieves. Some backups cost just a few hundred dollars a year.
–Install software that searches for and immobilizes viruses, malware and other harmful programs. Also install firewalls and data encryption programs.
–Make sure you have all the updates and patches for your operating systems for all your devices. They often include security programs.
–If you have a website, learn how to protect it from hackers, using software including firewalls. But you might be better off hiring a service that will monitor your site with sophisticated tools that detect and disable intruders.
–Tell your staffers, and keep reminding them, about the dangers of clicking on links or attachments in emails unless they’re completely sure the emails are from a legitimate source. Educate your employees about phishing attacks and the tricks they use. Phishers are becoming increasingly sophisticated and are creating emails that look like they really could have come from your bank or a company you do business with.
–Hire an information technology consultant who will regularly look at your systems to be sure you have the tools you need to keep your data safe.
–The Associated Press
HONG KONG (Reuters) – Tencent Holdings chairman pledged to advance China’s semiconductor industry, saying the blow to ZTE Corp from Washington’s ban on U.S. firms supplying telecommunications company was a “wake-up” call, local media reported.
China’s No.2 telecom equipment maker ZTE was banned in April from buying U.S. technology components for seven years for breaking an agreement reached after it violated U.S. sanctions against Iran and North Korea. American firms are estimated to provide 25-30 percent of the components used in ZTE’s equipment.
While the U.S. administration said on Friday it had reached a deal to put ZTE back in business after the company pays a $ 1.3 billion fine and makes management changes, the plan has run into resistance in Congress, indicating ZTE was still far from out of the woods. Also, ZTE is yet to confirm the deal.
“The recent ZTE incident made everyone more clearly realize that however advanced one may be in mobile payment, without the mobile, the chips and the operating system, you still cannot compete,” Chinese media reports cited Tecent’s Pony Ma as saying at a forum in Shenzhen on Saturday.
Tencent, which alternates with Alibaba Group to be Asia’s most-valuable listed company, is the largest social media and gaming company in China and operates the popular WeChat app.
Ma said “even though the ZTE situation was in the process of being resolved, we must not lose vigilance at this time and should pay more attention to fundamental scientific research”.
Tencent is looking into ways it could help advance China’s domestic chip industry, which could include leveraging its huge data demand to urge domestic chip suppliers to come up with better solutions, or using its WeChat platform to support application developments based on Chinese chips, Ma said.
“It would probably be better if we could get in to support semiconductor R&D, but that is perhaps admittedly not our strong suit and may need the help of others in the supply chain.”
China has been looking to accelerate plans to develop its semiconductor market to reduce its heavy reliance on imports and has invited overseas investors to invest in the country’s top state-backed chip fund.
Reporting by Sijia Jiang; Editing by Himani Sarkar
MELBOURNE (Reuters) – National Australia Bank on Saturday suffered what it described as a “nationwide outage” to some of its technology systems, leaving customers unable to access banking services or withdraw money.
Customers took to social media to vent their frustrations, with some saying they were left unable to pay for groceries or refuel their cars.
“Loyal member for 15 years and you leave me standing at the supermarket altar with a trolley full of shopping,” said one Twitter user.
The bank tweeted just after midday (0200 GMT) on Saturday that some services were coming back online.
“We’re sorry and it’s not good enough … but we’ll get it fixed as soon as possible,” Chief Customer Officer Business and Private Banking Anthony Healy said in a video posted on Twitter.
NAB is one of Australia’s four largest retail banks with a customer base of 9 million, according to its website.
The outage follows growing customer discontent with the so-called “Big Four” banks, which have suffered numerous embarrassing disclosures at an inquiry into financial sector misconduct.
A spokesman from the bank told Reuters by telephone that it was a national outage, without elaborating on its cause.
The Bank of New Zealand [BNZL.UL], a NAB subsidiary, also experienced outages on Saturday across New Zealand, but the spokesman was unable to confirm a connection between the two incidents.
Reporting by Will Ziebell in MELBOURNE; Editing by Joseph Radford
I’m a baseball fan. When I lived in the Bay Area, I was a season ticket holder to the San Francisco Giants. And every baseball fan knows about Pete Rose, the preternaturally talented player who scandalized his sport when it was revealed he bet on baseball, including games involving his own team. Now, no one is contemplating allowing players or managers to bet on games in their own sport. But the Pete Rose story serves as a grim reminder of what can happen with sports gambling.
The trouble is that sports gambling is fun! The thrill of making some dough on your team just adds to the excitement of the sport. It’s also hugely profitable for business and government. So when the Supreme Court of the United States released their decision on Murphy vs. NCAA last week, the gambling-loving world rejoiced. SCOTUS determined that the 1992 federal law called Professional and Amateur Sports Protection Act (PAPSA) violated the Constitution’s anti-commandeering clause, thus striking down the law.
Mark Conrad is a professor of law and ethics at Fordham University, where he has taught in the School of Law and in the Gabelli School of Business. He’s also the director of Gabelli’s Sports Business Concentration, and is the author of The Business of Sports -; Off the Field, In the Office, On the News. Professor Conrad was kind enough to share with me some of his thoughts on this landmark decision.
1. Nothing’s Actually Changed…Yet.
The Court’s decision caused an avalanche of news and commentary, but, “At the moment, not much has changed,” says Conrad. The decision opened the door to huge change, but nothing is actually different yet. Conrad explains, “The court declared unconstitutional the Federal law that prohibits sports gambling. It did not sanction or permit sports gambling.” So what happens now? Conrad says no one really knows: “It is now up to the states, or the federal government, to decide.” Here’s where it get interesting!
2. The Devil Is in the Details.
“This story is only beginning,” says Conrad, who also has a degree from Columbia’s School of Journalism. “No state has enact a gambling scheme, although New Jersey may soon,” he says. The question is what happens next. For starters, Conrad asks, “Will states legalize it? And if so, which ones, and when?” Next comes the what. Conrad wants to know, “Will it apply to all sports or just pro sports?” And finally, the how. Conrad ponders: “What will be the license fees for companies wishing to do business in the state? Taxes? Anti-corruption measures?” The potential complexities are endless.
3. Congress May Not Be Done.
The Court may have struck down Congress’ PAPSA law, but that doesn’t mean Congress can’t still have the final word. Conrad explains, “The problem with PAPSA was it prevented states from exercising their powers. The law did not mandate a ban on sports gambling – rather, it told the states they were not allowed to enact laws ‘authorizing’ such gambling schemes.” The problem was the way this law was structured, but not the idea behind the law. In fact, Conrad says, “The decision did state that Congress has the power to enact a ban on gambling.” It’s possible Congress could throw some very cold water on all the excitement.
4. Integrity May Be an Issue…Or May Not.
The potential implications for the integrity of sport are fascinating. As with any gambling, there’s risk of corruption. Conrad recalls, “It has occurred in the past, notably in point-shaving in college sports.” But cheating isn’t a given. “In fact, the risk of corruption may decrease with a properly regulated integrity oversight,” Conrad explains. There are examples the US could look to for inspiration. Conrad says, “The UK model has worked well. The betting companies engage in analytics and metric systems to police suspicious gambling patterns and report these anomalies.” The key is not to over-regulate or over-tax it, which may push otherwise legal gambling underground.
5. This Decision Could Have Major Implications for State Versus Federal Authority.
“This is the underlying constitutional issue in this ruling,” Conrad explains. “Ultimately, it is a constitutional law case regarding state powers under the Tenth Amendment.” Here’s his plain-English explanation of the finer constitutional points: “PAPSA was problematic because it ‘commandeered’ states rights. Instead of banning sports gambling, it said could not enact laws authorizing gambling. It’s a subtle difference, but a constitutionally defective one.” This is an important decision in part of a greater shift. According to Conrad, “It continues a trend to give greater deference to state sovereignty.” It will be fascinating to watch as the complexities continue to develop.
BOSTON (Reuters) – Facebook Inc named a new director this month and timed his appointment to avoid a shareholder vote, raising concern among some investors who want to see more accountability from the social media company.
The decision by Facebook’s board comes as the company is under scrutiny from regulators and shareholders about its internal controls and oversight after it failed to protect the data of some 87 million users that was shared with now-defunct political data firm Cambridge Analytica.
Jeffrey Zients’ appointment does not take effect until “immediately following the conclusion” of the company’s May 31 shareholder meeting, according to a securities filing on May 8, meaning he could be able to serve a year without facing shareholder approval.
“The optics of this are questionable,” said John Wilson, head of governance at Cornerstone Capital Group, whose clients have about 30,000 Facebook shares.
For one thing, Wilson said, some shareholders could be looking for the largest social media network to add a board member with more of a background on privacy issues and will not have the chance to register objections to Zients, president of holding company Cranemere Group.
Zients and Mark Zuckerberg, the company’s chairman and chief executive, declined to comment via a Facebook spokeswoman. The spokeswoman, Nora Chan, said the board has authority to appoint directors between annual meetings.
“Since this appointment is effective after this year’s annual meeting, it is not on the ballot this year. It would be on the ballot at future annual meetings,” Chan said via e-mail.
Exactly when Zients should be voted in is something of an academic question since Facebook’s structure gives Zuckerberg a majority of its voting power.
Still Facebook has been at pains to address its issues in order to reassure investors. Its share price fell during the first three months of the year as details of its data-protection problems emerged. The shares have since recovered, but a number of funds that call themselves socially responsible are selling the stock, concerned Facebook has not fully addressed its issues.
Proxy adviser Institutional Shareholder Services on May 16 recommended investors withhold support from five of eight directors on the company’s ballot including Zuckerberg, and vote in favor of shareholder proposals aimed at improving its response to problems like election interference and harassment.
In recommending that investors withhold support from Zuckerberg, ISS cited the lack of a formal board-nominating committee, a concern it has raised in past years.
ISS Special Counsel Patrick McGurn said the lack of a vote on Zients is “suboptimal.”
“Best governance practice generally dictates that a board should provide shareholders with a timely opportunity, typically at the next scheduled meeting, to elect a director who is appointed by the existing board members to fill a vacancy,” he said.
However, McGurn said the timing may not have been entirely in Facebook’s control, given that departing director Jan Koum did not immediately leave the company’s board at the same time he quit as a company executive.
James McRitchie, a private investor who filed one of two pending shareholder resolutions calling on Facebook to revamp its voting rules, said the lack of a vote on Zients will not look good at a time when the company needs to seem responsive and not be seen as “cutting out shareholders.”
Reporting by Ross Kerber; Editing by Frances Kerry
We had previously looked at the positioning of large commercial traders in the oil futures market. While the consensus view had been that this meant that oil prices were due to fall significantly, we basically took the stance that the data implied no such thing.
Since then crude oil prices have risen, with Brent oil futures threatening to break the $ 80 barrier and by our count, at least 4 grades of oil trading above the critical $ 80 mark. With prices firmly entrenched in a long-term upswing, we were surprised to see that the commercial traders had started to actually go long crude oil futures.
This was the second consecutive week where commercials expanded their net long position after shorting this market for what seemed like an eternity.
So what do we make of this change in behavior?
Where is this coming from and what it means
The one group that has been notoriously absent from trading crude oil positions in the last few years has been the airline group. Having been burnt a few times by hedging oil prices too high, they have stayed on the sidelines since 2016.
While carriers saved hundreds of millions of dollars from oil prices halving since June, they forfeited a large chunk of that gain because of the fuel hedges they bought as protection against oil rising.
The bulk of those hedges – which effectively lock in fuel costs in advance – are set at levels that force airlines to pay more for fuel than current market prices, turning them into a hindrance rather than a help.
As a result, three of the four biggest carriers – Delta, Southwest and United – said this week they were rethinking their hedging tactics. Meanwhile, American, which does not hedge fuel costs at all, is reaping the biggest savings.
Southwest Airlines Co. said on Thursday its outstanding hedges represented a loss of $ 1.8 billion through 2018, at Jan. 15 prices. However, it still expects a fuel bill that is more than 30 cents per gallon lower this year compared to 2015, or a roughly half-billion dollar net benefit.
It was this group’s absence that distorted the futures positioning in the crude oil market and gave the appearance that collectively “the hedgers” were bearish on oil. That logic proved very costly as anyone who went by the commitment of traders report, stayed away from long positions and missed the entire rally.
However, with prices breaching past levels that no analyst thought possible last year, the airlines may be getting religion. Fuel represents the single biggest cost factor for airlines and it is hard to pass on unless capacity utilization is extremely high. While for most part airlines have denied that they will hedge, we believe some in the group are now breaking ranks. There are two likely reasons for this. The first being the certainty of cash flow is likely to assuage investor concerns, even if it is at a much higher price than they should have hedged. The second is this.
While the front end of the curve is flirting with much higher prices, airlines still have the opportunity to lock in sub-$ 60/barrel prices further out. So in a sense, oil prices have to fall more than $ 15/barrel from today’s prices for them to actually lose money on further out hedges. We think that they will embrace this opportunity as world oil fundamentals continue to tighten and supply surprises will continue to be on the downside.
As they do so, we think the incredible backwardation currently visible will begin to ease and the curve will become flatter. To some extent, this will be counterbalanced by increased producer hedging as they see an opportunity to lock in good prices, but on the whole, the curve will flatten in our view. The biggest impact of this though will be on oil producers. Oil producers continued to be priced for a $ 50/barrel market, and as the futures curve reflects the correct longer term supply demand situation, oil producers should embark on a spectacular rally.
Oil producers have outperformed the broader indices recently, but we believe this is a long-term trend that can still be bought. Our favorite oil producers are trading at a fraction of their fair value and offer gains not available anywhere else in the market. Oil itself has had a sensational run and is due for a pullback. But the longer-term story is still intact and we continue to ignore silly stories about EVs denting demand.
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Additional disclosure: We are long several energy related plays.
SEOUL (Reuters) – South Korea’s biggest conglomerate, Samsung Group [SAGR.UL], came for fresh criticism about its ownership structure on Thursday, with the country’s antitrust chief saying it was unsustainable.
Korea Fair Trade Commission chief Kim Sang-jo took aim at the group’s circular shareholdings between companies such as Samsung C&T, Samsung Life Insurance, and Samsung Electronics.
The structure has enabled the family of Samsung heir Jay Y. Lee to retain control of the companies in the conglomerate, especially crown jewel Samsung Electronics, with minimum investments, critics have said.
“The clear fact is, the current ownership and control structure of Samsung Group, which goes from Vice Chairman Jay Y. Lee to Samsung C&T to Samsung Life Insurance to Samsung Electronics, is not sustainable,” Kim told reporters on the sidelines of a meeting with business leaders.
Samsung Group’s complex ownership structure has come for criticism earlier too, most notably from U.S. activist hedge fund Elliott Management, which proposed as a solution in 2016 that Samsung Electronics split itself into two.
Samsung Electronics rejected that proposal but accepted part of the fund’s proposals by announcing plans to cancel its existing treasury shares worth over $ 35 billion by 2018.
Fair Trade Commission’s Kim said he urges Jay Y. Lee to make a decision concerning the ownership structure, adding that Samsung Electronics Vice Chairman Yoon Boo-keun, who attended the meeting, had told him it will be considered.
A Samsung Electronics spokesman did not have an immediate comment.
Others have also questioned the group’s ownership structure recently.
The country’s top financial regulator said on Wednesday that Samsung Life Insurance must consider ways to lessen the risk of having too much of its assets concentrated in one place, including selling some or all of Samsung Life’s stake in Samsung Electronics.
“Lessening the risk of concentrated assets is key to securing financial stability, which is what we are interested in,” said Choi Jong-ku, Chairman of the Financial Services Commission.
“If there are any concerns about retaining management control (of Samsung Electronics) we are saying, look for ways to keep it while lessening the risk.”
Samsung Life Insurance is at the heart of a cross-shareholding structure in which it owns about 8 percent of Samsung Electronics, which has a market value of about $ 340 billion, according to Thomson Reuters data.
Reporting by Heekyong Yang and Yuna Park; Additional reporting and writing by Joyce Lee; Editing by Muralikumar Anantharaman
(Reuters) – Uber Technologies Inc [UBER.UL] said Monday it has hired a former National Transportation Safety Board (NTSB) chairman to advise the company on its safety culture after a fatal self-driving crash in Arizona.
Online news outlet The Information reported Monday that Uber has determined the likely cause of the fatal collision was a problem with the software that decides how the car should react to objects it detects. The outlet said the car’s sensors detected the pedestrian but the software decided it did not need to react right away.
“We have initiated a top-to-bottom safety review of our self-driving vehicles program, and we have brought on former NTSB Chair Christopher Hart to advise us on our overall safety culture,” Uber said Monday. “Our review is looking at everything from the safety of our system to our training processes for vehicle operators, and we hope to have more to say soon.”
A 49-year-old woman was killed on March 18 after being hit by an Uber self-driving sports utility vehicle while walking across a street in Phoenix, leading the company to suspend testing of autonomous vehicles. Arizona’s governor also ordered a halt to Uber’s testing.
Uber declined to comment on the Information report. “We can’t comment on the specifics of the incident,” the company said, citing the ongoing NTSB investigation.
The National Highway Traffic Safety Administration is also investigating the incident.
Uber Chief Executive Dara Khosrowshahi said in April the ride-sharing company still believes in the prospects for autonomous transport. “Autonomous (vehicles) at maturity will be safer,” he said at a Washington event.
Reporting by David Shepardson; editing by Jonathan Oatis
LOS ANGELES (Reuters) – Amazon.com’s Whole Foods Market sparked social media outrage after its newest store in its 365 grocery chain partnered with an Asian restaurant with the racially charged name of Yellow Fever.
The independently owned and operated eatery – whose name is taken from the slang term for a white man’s sexual attraction to Asian women – is located in the 365 store that opened in Long Beach, California, on Wednesday.
“An Asian ‘bowl’ resto called YELLOW FEVER in the middle of whitest Whole Foods — is this taking back of a racist image or colonized mind?” Columbia University professor and author Marie Myung-Ok Lee, wrote on Twitter.
Whole Foods, which has eight stores in its 365 chain that was launched with a no-frills concept to win over millennials, declined comment.
“Yellow Fever celebrates all things Asian: the food, the culture and the people and our menu reflects that featuring cuisine from Korea, Japan, China, Vietnam, Thailand and Hawaii,” said Kelly Kim, executive chef and co-founder of Yellow Fever, which also operates two Los Angeles-area restaurants.
“We have been a proud Asian, female-owned business since our founding over four and a half years ago in Torrance, California.”
Kim, who is Korean-American, in previous interviews said she was aware that the name choice would be attention-getting and controversial.
“One night, we just said ‘Yellow Fever!’ and it worked. It’s tongue-in-cheek, kind of shocking, and it’s not exclusive — you can fit all Asian cultures under one roof with a name like this. We just decided to go for it,” Kim told Asian American news site NextShark six months ago.
A year ago she told the Argonaut, a local Los Angeles news outlet, that Yellow Fever means “love of all things Asian” and that public push back over the name had not been as drastic as expected.
Some people on social media defended the news of the partnership with Whole Foods as part of a broader cultural trend.
“This is no more offensive than @abc naming an Asian sitcom Fresh of the Boat or FOB- which is considered racists [sic],” wrote Lorin Hart, who uses the Twitter handle @CubeProMH.
Reporting by Lisa Baertlein in Los Angeles; Editing by Marguerita Choy
Tesla’s (TSLA) Q1 production update had me singing and dancing with joy. I encourage you to read the whole thing. Or if you prefer, watch this video from HyperChange covering the update:
The top three updates are on Model 3 production, Tesla’s cash flow, and Model 3 quality.
Model 3 production is at a burst rate of 2,000/week
After six months of delays, Model 3 production is finally on track:
In the past seven days, Tesla produced 2,020 Model 3 vehicles. In the next seven days, we expect to produce 2,000 Model S and X vehicles and 2,000 Model 3 vehicles.
If this rate can indeed be sustained into April and even increased, then Tesla is just shy of its goal to produce 2,500 Model 3s/week by the end of March. Bloomberg’s independent model has production about a month behind that target. For Tesla, a month late is basically on time! Moreover, in light of this update, Tesla might only be a few weeks behind.
As always, it bears reminding that this is an arbitrary, self-imposed goal largely designed around motivating employees. It’s not required for any financial, competitive, or technological purpose. A line in the sand just has to be drawn somewhere.
Model 3. Photo by Carl Quinn.
Tesla says it doesn’t need to raise cash this year
Recent alarm about Tesla’s solvency seems to be misplaced:
Tesla continues to target a production rate of approximately 5,000 units per week in about three months, laying the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow. As a result, Tesla does not require an equity or debt raise this year, apart from standard credit lines.
Boom! That’s what I love to hear! Barring further delays, Tesla is about six months out from achieving massive positive cash flow from Model 3 sales. If targets are met, Model 3 will generate quarterly revenue on the order of $ 3.25 billion and quarterly gross profit on the order of $ 810 million. (That’s assuming a $ 50,000 ASP and 25% gross margin about a quarter after a 5,000/week production rate is achieved.) Previously, Tesla has guided that it will post sustained operating profits starting by the end of 2018, with a possibility of net profit before 2019 as well.
Based on my own review of the numbers, I think that Tesla’s cash “crunch” is being exaggerated. There are aspects of Tesla’s finances that are opaque to outsiders (such as the composition of accounts payable), however, so it is encouraging to get confirmation from Tesla on this. Here’s the basic math: As of the end of Q4 2017, Tesla had a cash balance of $ 3.37 billion. In Q4, it burned $ 277 million. At that rate of cash burn, it wouldn’t run out of cash until the beginning of 2021.
Several one-time factors contributed to cash burn for Q4 being so low, such as customer deposits for the Tesla Semi and next-gen Roadster. However, there were repeatable factors as well, perhaps most notably slowing discretionary capex. Tesla can slow expansionary spending to be in line with growth in revenue and gross profit. This makes particular sense when it comes to the sales, service, and charging infrastructure for the Model 3 fleet. We’ll have more hard data in about a month when Tesla releases its Q1 earnings.
The key here is the threshold beyond which Model 3 production goes from a net cash incinerator to a net cash generator. If all goes according to plan, by the end of this year, Tesla will likely have the ability to have positive free cash flow. However, that doesn’t seem to be the plan.
From the sounds of it, Tesla wants to finance capex for Model Y, Semi, Roadster, Solar Roof, Powerwall, Powerpack, and future products with debt and perhaps even equity, plus other sources of cash like customer deposits and securitizing leases. Note that Tesla says raising cash this year isn’t “required.” That doesn’t rule out raising discretionary cash to fund faster expansion.
Tesla has a total of $ 330 million in debt coming due in 2018. Given Tesla’s end of Q4 cash balance of $ 3.37 billion and ramping Model 3 production, $ 330 million is a manageable amount to repay. Heck, Tesla could probably wipe that debt away by collecting Model Y deposits. Because Elon Musk is a rock star.
Some convertible bonds to the tune of $ 920 million are set to mature in March 2019. The conversion price is $ 359.87. I can’t predict the ebb and flow of the markets, but it seems well within the realm of possibility that Tesla’s share price will exceed that $ 360 a year from now. If not, with approximately $ 810 million in quarterly gross profit from the Model 3, repayment will be no problem.
Tesla Semi. Photo by Korbitr.
Tesla’s internal data shows high Model 3 owner satisfaction
Finally, Tesla again shared internal survey data of Model 3 owners:
The quality of Model 3 coming out of production is at the highest level we have seen across all our products. This is reflected in the overwhelming delight experienced by our customers with their Model 3s. Our initial customer satisfaction score for Model 3 quality is above 93%, which is the highest score in Tesla’s history.
Although this is somewhat encouraging, Tesla is of course incentivized to present the Model 3 in the best possible light. Before I consider this matter settled, I want to see data from an independent source like Consumer Reports. Consumer Reports has yet to publish survey data on the Model 3. So, for now, we wait.
What is not particularly informative are anecdotes about Model 3 quality. If you, like me, believe in the Enlightenment values of science and logically rigorous thought, then you’ll agree that anecdotes plucked from large samples seldom reveal the truth and often mislead. Statistics reveal the truth. It is surprising and disconcerting to me that so much investment and media analysis — particularly of Tesla — seems to exist in a pre-scientific, pre-Enlightenment mode of thinking in which fact and conjecture are haphazardly mixed, cherry-picked anecdotes are held up as representative, and rumour and hearsay are credulously accepted. So much of what you’ll read and hear about Tesla is either essentially made up or grossly exaggerated because there is little to no application of Enlightenment criteria of truth.
The way I think about companies is to try to approximate as best I can the scientific method. Any way I can remove my own subjective bias is a relief. Hard data is always a breath of fresh air. So is any other empirical test that can serve to falsify an idea. Without scientific discipline, we will inevitably fool ourselves, and wander around in the darkness.
So, I don’t consider a photo of a Model 3 with egregious panel gaps to be informative. A photo of a Model 3 with seamless panels is equally uninformative. Ignore anecdotes. Find statistics. For now, we simply don’t know the level of quality of the Model 3.
Panic and doomsaying about Tesla may never stop entirely. However, it has taken another step toward demonstrating that it has a sustainable business model capable of long-term growth and profits. A year from now, we will probably be having a very different conversation about this company. I look forward to it.
Disclosure: I am/we are long TSLA.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.