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Hubris Alert! Bezos disses eBay, Musk denies Tesla rumors

Written By | Apr 12, 2019
hubris, Bezos, Musk

Jeff Bezos at Amazon Spheres Grand opening, January 2018 at the Amazon HQ campus in the Denny Triangle area of Seattle. (Image via Wikimedia photo, CC 2.0) 

WASHINGTON.  Thursday proved to be yet another mediocre day on Wall Street. Stocks marked time in the negative zone, anticipating an incoming Q2 earnings season litany of disappointing earnings. As a result, Wall Street snark and outright gossip grabbed the financial media’s attention yesterday, particularly Amazon (trading symbol: AMZN) CEO Jeff Bezos’ casual dissing of eBay and other competitors and more tap-dancing from Elon Musk, the controversial head of soon-to-be-bankrupt “automaker” Tesla (TSLA). (Hubris alert to come.)

It’s Friday morning now, and the first trickle of Q2 reports, including a stellar earnings gain for bellwether mega-bank JP Morgan Chase (trading symbol: JPM) have set those predictions on their collective ear. But more on this in a later article. Let’s look back on the Thursday news and gossip fun involving Bezos and Musk.

Both stories put us on hubrisalert. To oversimplify a bit, hubris is the ancient Greek term that we can somewhat simplistically translate as “pride.” More likely, the Greeks were really referring to the kind of overweening pride that goeth before a fall. The kind of super-pride that sets you up for an uproariously funny new “Fail Army” video on YouTube.

Elon Musk, Tesla on the edge. Again

Even as Elon Musk seems to be on a roll when it comes to sending stuff into space and returning re-usable rocket parts successfully, his poor-quality-fraught domestic and foreign electronic auto business, i.e., Tesla, remains a costly basket case kept on life-support. That’s due to generous, and continuing Obama Era taxpayer subsidies. Extracted from American taxpayers who can’t afford these expensive global warming climate change fighting trophies, the subsidies lower prices of Tesla’s cars by a few thousand dollars. This in turn enables even moderately mega-rich virtue-signaling celebrity customers to afford them.




Meanwhile, Musk, the company’s CEO continues to pour out intemperate tweets bashing his real or imagined enemies, including the SEC, while crowing about his own brilliance. Even though that brilliance bequeathed Tesla with enough badly losing quarters to fill the holds of several giant container ships to the brim.

Latest developments in Elon’s fantasyland

In Musk World, everybody is wrong about everything except the Oracle at Elon. Yet word leaked out Thursday that the company’s gigantic, generously taxpayer overfunded Nevada manufacturing facility outside Reno, might be stumbling. CNBC was on it.

Tesla disputed a report that the carmaker and its partner Panasonic have paused expansion of the Gigafactory 1 manufacturing facility.

“The Nikkei Asian Review reported Thursday that Panasonic and Tesla are reconsidering plans to increase the factory’s capacity 50 percent by 2020, as investors increasingly worry about possibly weakening demand for Tesla cars.

“Tesla shares fell 3% in intraday trading Thursday.

“The $4.5 billion Gigafactory near Reno, Nevada, is where Panasonic and Tesla jointly make the battery packs for Tesla’s cars and energy storage products, and where parts of the Model 3 sedan are made. Tesla said in its fourth-quarter letter to shareholders that it will ‘most likely’ build the recently unveiled Model Y crossover at the factory.

“The news comes a week after Tesla released quarterly delivery numbers that missed Wall Street expectations by a wide margin.”

Of course, like everything else Tesla, those quarterly numbers nearly always miss “Wall Street expectations.” And yes, usually “by a wide margin.” Tell us something we don’t know.

Musk bashes any and all critics, despite Tesla’s ongoing failures

It’s the massive, ongoing hubris of Elon Musk that’s once again on display in this latest big time Tesla fail. The thing that amazes us is how long his fake electric-autonomous car game has stumbled along without going under. Obviously, Musk still has at least a few friends, mostly supporters of the global warming climate change hoax. And their bureaucratic friends in Washington, D.C., California. Plus now-hapless Nevada.

Tesla’s fall, when (not if) it happens will be one hell of a big story. But do us a favor and remember. While others will claim credit for seeing it coming, we saw it first, right here on CDN in column after column. Remember: frequent displays of CEO hubris are always an early warning sign that the worst is yet to come.



And now for Jeff Bezos

Which brings us to Amazon’s Jeff Bezos, recently in the news for his juicy sexcapades with a hot Hollywood personality. Jeff’s extra-marital (and now post-marital) carousings might never have seen the light of day. But Bezos’ prospective new brother-in-law decided to make a few bucks on the side by peddling them – via some candid sex-pix – to the inquisitive folks at the Enquirer.

As nearly everyone in the world now knows, Bezos fooled everyone by unveiling those candid pix on his own, thwarting the Enquirer’s alleged blackmail plot against him. We’re actually forced to give him some credit for originality here.

He also sicced a phalanx of expensive lawyers on the publication. Unsurprisingly, the Enquirer’s current owners are now looking to sell the scandal-sheet tabloid to someone else with more lawyers on retainer.

Add this surprising turnabout to Bezos’ takeover of the entire retail world (except for Alibaba [BABA]) – and soon the known universe – and you have essentials for a legendary case of hubris. Which is what we glimpsed in Thursday’s business news gleanings.

Bezos vs eBay

According to another CNBC news flash, our first clue that Bezos was experiencing a serious hubris attack occurred when Amazon competitor eBay’s (EBAY) shares suddenly came under fire from Big Jeff.

“Shares of eBay fell nearly 5% on Thursday, after Amazon CEO Jeff Bezos snubbed the rival e-commerce giant his annual letter to shareholders.

“In the letter, Bezos compared the growth in merchandise sales of third-party sellers between Amazon and eBay from 1999 to 2018. His comparison showed that Amazon has clearly outperformed its rival.

“‘Third-party sales have grown from $0.1 billion to $160 billion — a compound annual growth rate of 52%. To provide an external benchmark, eBay’s gross merchandise sales in that period have grown at a compound rate of 20%, from $2.8 billion to $95 billion,’ said Bezos.”

“EBay’s shares slid to $36.00 on Thursday afternoon. Its market cap was $32.94 billion.

“Bezos cited the Fulfillment by Amazon and Prime memberships as the company’s two “very best selling tools” to secure Amazon’s success with third-party sellers over rivals like eBay.

“‘We invested in both of these programs at significant financial risk and after much internal debate,’ Bezos said in the letter. ‘We could not foresee with certainty what those programs would eventually look like, let alone whether they would succeed, but they were pushed forward with intuition and heart, and nourished with optimism.’

eBay strikes back

“In response, eBay CEO Devin Wenig took to Twitter defend the company.

“‘While I appreciate the ink dedicated to from the ceo of the company not focused on competition, think I’ll dedicate my letter to customers, purpose and strategy. We don’t compete with our sellers. We don’t bundle endless services to create barriers to competition.’”

What the hubris besotted Bezos failed to acknowledge is that in its beginning years and for many years thereafter, eBay was an individual consumer-driven site that became the web-equivalent of a giant national flea market. It was a place where anyone, anywhere, including all those Deplorables in flyover country, could put up items for sale or bid. People loved it.

It was many years before eBay evolved into the primarily storefront model it is today. And that means that Bezos’ one-to-one comparisons are essentially fake news. But who bothered to look? Bezos is essentially bragging about fake numbers.

Bezos vs Walmart

But Jeff’s hubris fest wasn’t quite finished.

“Bezos also challenged rival retailers to match Amazon’s minimum wage of $15 per hour. Bezos did not call out competitors by name, but it prompted a response from Walmart’s executive vice president of corporate affairs, Dan Bartlett, who challenged Amazon to pay more taxes.”

Score a palpable hit for Bartlett. Except that Bezos has a lot of company among the mega-wealthy. Like Warren Buffett and many other multibillionaires, these 100 percent Democrat supporters routinely avoid paying most taxes the rest of us have to pay. That’s due to the carve-outs they can deduct deduct courtesy of the tax codes they get tailored to their advantage through their paid-for US Senators and Representatives.

But it gets worse

Another news source, this time Reuters’ “Breakingviews,” follows up on the Bezos saga. That section notes that this 21stcentury Robber Baron has also set his sights on taking over cloud computing and big data. Editor-columnist Tom Buerkle pays some needed attention to a huge Amazon business that few in the general public actually comprehend.

“The Amazon founder’s bold bets helped the e-commerce giant create a $30 bln cloud unit. His annual letter talks about winning more commercial-database business. It’s a warning for Oracle’s top executives, who will need to better justify their pay if they’re to see Bezos off.”

Yeah. Oracle, Microsoft, Apple, IBM… you name it. Bezos is after you, too.

So where are the 21stcentury trustbusters, you ask? Oh, come on. You know.

Hubris is bad, but investing in greed can be good

BTW, while I refrain from making actual recommendations in this column, I try to be honest about what I actually invest in. And whether this or that investments succeeds or fails.

So yeah, despite today’s greed screed, I carry a few very expensive Amazon shares in my portfolio despite my intense dislike for the company’s anti-competitive owner’s shenanigans.

In this case, it’s all about trying to invest in winners, not losers. This often involves buying shares of a company you essentially detest. Your reasons may range from a company’s amorality (Amazon). But they can also include the nature of its business (Altria, Philip Morris, etc.) Bottom line, however: Companies that grow big time, make money big time and/or pay dividends big time. And it’s these companies that makes your portfolio grow. Investing in loser companies helmed by virtue-signaling CEOs will make you poor.

Bezos’ one shining virtue: he makes money for investors

Bezos torques me off. So does his lousy left-wing propaganda rag, that deteriorating Communist house organ  known as the Washington Post. But Amazon’s shares still make money in my portfolio. Which is why I own them. Along with, seemingly, everyone else who enjoys making the occasional profit in stocks.

As I’ve indicated before, investing in stocks is most effective when it ruthlessly involves dollars and sense, not highfalutin’ morality. True, I’ve occasionally boycotted certain stocks for blatant, left-wing virtue-signaling. But those decisions aren’t really at variance with my stated philosophy of amoral investing.

Companies that kill their shares and shareholders by PC virtue-signaling can drive off a substantial amount of business. That makes them really bad investments. So why not boycott them? And their stocks. They likely won’t make you money. Unlike most of these clownish companies, Bezos isn’t a virtue-signaler. He’s just another wealthy lefty.

Bezos simply brags, as he did Thursday. With, unfortunately, some justification.

Stick with your discipline

As an investor, you have to stick with your investing discipline. Which these days primarily means sticking with the winners, no matter how obnoxious they might sometimes seem. If you make enough money, you can use some gains to support companies and charities that need your support. Without those profits, you can only watch as the world floats by without you.

—Headline image: Jeff Bezos at Amazon Spheres Grand opening, January 2018 at the Amazon HQ campus in Seattle. AKA Bezos’ Balls, the spherical conservatories are mainly for meetings and for the use of Amazon employees. Image via Wikimedia photo, CC 2.0.

 

Terry Ponick

Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Senior Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17