Is the media actually biased against Elon Musk or Tesla?: a deep dive.

This is a case where showing is going to be far more effective than telling.

As it happens, I’ve spent the last three months or so studying Tesla coverage. While I have no special fascination with Musk or his companies, something I’d written back in July about Musk’s involvement with the Thai cave rescue ended up catching his attention and leading to a minor media furor, which in turn led me down a long and dark rabbit-hole of coverage analysis.

The outflow of this was an exhaustive 16,000 word sequel (including appendices), representing my best attempt to put the event and the media’s relationship with Musk into a context that might allow a clearer sense of what exactly Musk did right/wrong and why the media responded as they did.

Of course, the issue with 16,000 word write-ups is that they’re 16,000 words long. That in mind, I’m going to focus on just highlights here. I’ve chosen eight cases of Tesla/Musk coverage that I think are representative of the whole, which I present to the reader for their own consideration and slow judgment.

Let’s start with a recent one:

If you’re thinking that this reads like a BuzzFeed headline, you’re not wrong. But this isn’t your Which Disney Princess Am I? clickbait junkmill of yesteryear. This is BuzzFeed News, the grown-up, black-and-white aesthetic, two-time Pulitzer Prize finalist that takes hard news very seriously.

Well, about that:

  • This headline was from Friday, September 7th. The day prior, Tesla had closed at around $281. The stock then “tanked” all the way down to a close of $263, where it stayed all the way until the very next market day, where it rebounded to $285.
  • It’s true that Musk did take a single toke from a blunt in his interview with Joe Rogan, in the late evening, in a state where doing so was legal. But it wasn’t to get high (he very clearly didn’t inhale). More likely, it was his way of signalling that the current cycle hasn’t changed who he is underneath, and that he doesn’t feel constrained. While we can debate whether this is good or bad, what this isn’t is news.

Joining them in hyperbole (if with less cheeky enthusiasm), we have The Guardian:

But it isn’t just the shoddy, misleading headline. See their new sales pitch (on the left of the image).

It’s bizarre that they’d wear this as a badge of honor, mimicking The New York Times who did the same with Trump. While it isn’t unreasonable to personally disapprove of Musk’s decision to take a symbolic drag, pearl-clutching for clicks is indeed a bit insufferable.

That aside though, one does wonder why Wall Street knocked the price down for a day. It’s hard to believe that many traders were all that surprised or concerned at what has to be the tamest thing a Silicon Valley CEO has done after-hours this decade (bearing in mind especially that half of Musk’s peers were at Burning Man earlier that week).

The Guardian did get into the real story a bit deeper into their article (having left it out of their headline for reasons unknown). That said, Bloomberg News did the admirable thing and took it head-on:

This is closer (if still some ways from anything we called measured). Relegating the pot storyline to its secondary importance, they opted to focus on the news that Wall Street does care about: executive departures.

But even there, the news wasn’t nearly as bad as hackneyed phrases like “erupts in chaos” or “fever pitch” might imply. [Note: Those were probably written by separate people, as headlines are often chosen by an editor.]

Let’s start with Morton. He’d resigned three days prior. It just so happened that said move was announced the morning after the Rogan incident as part of a routine 8-K disclosure with the SEC.

The entirety of that statement:

On September 4, 2018, Tesla’s Chief Accounting Officer, Dave Morton, provided notice that he was resigning from Tesla, effective immediately. Dave stated: “Since I joined Tesla on August 6th, the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations. As a result, this caused me to reconsider my future. I want to be clear that I believe strongly in Tesla, its mission, and its future prospects, and I have no disagreements with Tesla’s leadership or its financial reporting.”

Tesla’s accounting functions and personnel will continue to be overseen by both Tesla’s Chief Financial Officer and its Corporate Controller, as had been the case prior to and during Dave’s transition to Tesla.

Some elements here are boilerplate. But Morton is clearly signalling that he’s not leaving because of some internal scandal. Second-hand reports later suggested that he was mostly miffed about being sidelined during the whole going public misadventure. While not unreasonable, I take Morton’s statement at face value: I think he expected a very different environment than he found himself in. Tesla is a public company that thinks and acts like a Silicon Valley startup (which it still is in its DNA). That’s not for everyone.

The other resignation was HR head Gabrielle Toledano, who had gone on a leave of absence earlier in August. Bloomberg says she confirmed Friday morning that she wouldn’t be returning. Whether this was related to the pot incident is unclear, nor did Bloomberg disclose who initiated the conversation. While it obviously isn’t a net positive in any context, Toledano quoted family reasons, which can sometimes be a coded excuse, and can sometimes be the honest answer. We have no evidence either way. But it is a possible risk signal, so we’d expect the market to weigh it for a day or two and then decide if it meant anything — which they did, to the net change of a tiny increase in Tesla’s value.

Overall, the executive departures are of moderate concern. At the least, they demonstrate that Tesla has growth opportunities in terms of fit-based recruiting. People shouldn’t be surprised at the pace or public attention, or at Musk’s management style. That said, losing Morton or Toledano is hardly evidence of (or the cause of) “chaos” or “turmoil”. If Strobel or von Holzhausen left, perhaps that’s a different story. But HR and Accounting are fairly replaceable functions in Tesla’s structure.

Moral: only one of these three article/headline combos made a serious attempt at educating the reader, and that exception still undermined itself through the use of hyperbole (both in the headline and the lede).

Now a short one from Business Insider:

Here’s the relevant exchange from a Fox Business interview:

Fox: “Would you suggest that Apple get into — or would you support it, if they bought Tesla?”

Buffett: “Well, I would support whatever Tim Cook does! But I think it would be a very poor idea to get into the auto business. It’s not an easy business.”

Even my transcription doesn’t do justice to the tone of how Buffett said it. If you watch the clip (the relevant bit starts at 1:20), you get the sense that Buffett really would defer to Cook happily, and that his concerns about them getting into the auto business have zero to do with Tesla and everything to do with his classic moat thesis (which I think is misapplied in an ironic way, given that Tesla has essentially copied Apple’s business model).

So, a few problems with Business Insider’s take:

  • They copied Fox Business in connecting Buffett’s comment to Tesla specifically within the headline, which gives the sense that Buffett was criticizing Tesla instead of a larger idea connected to an entire industry.
  • There was zero original content in the Business Insider piece. It was just a poor distillation of that one clip. The motive was pure clickshare.
  • BI didn’t even bother to link out to the interview they quoted.

Now let’s take a look at how the work of private financial analysts translates into public coverage.

Quoting CNN Money:

So, this analyst comes up with a take for his private Wall Street clients. That write-up then finds its way to CNN, who decides to report on it.

The real issue here is how financial outlets present these types of analyses. The average reader was likely to assume that Model 3 orders were indeed being cancelled at a faster pace than new orders were coming in, and that Tesla denied this for reasons other than said theory being incorrect.

Looking under this particular hood:

  • Bear in mind: the job of an analyst isn’t to find the truth; it’s to find an edge. They make a few phones calls, do a bit of sampling, and maybe contract a private investigator. They then extrapolate their findings, hit publish, and move on. They don’t expect to get them all right. Their sole goal is to outperform the market.
  • Per Tiprank, this particular analyst has had a 61% success rate re: his recommendations over the past year (meaning that you’d have made money on 61% of his tips if you’d actioned them all at the time he made them). In Wall Street terms, this is pretty good. He’s ranked #103 out of 4,875, having produced an 18.6% theoretical return.
  • Digging deeper though, Gill has issued 655 ratings. Only 11 of them were negative, and 4 of those 11 were for Tesla — a stock for which his recommendations have returned just 5.4%. By comparison, a passive index investment in the Nasdaq itself (the exchange on which Tesla trades) has returned about 16% year-to-date. Put another way, his Tesla tips are outliers in both pessimism and performance.

This is why Musk and others have called for outlets to include every analyst’s track-record with their coverage (and why Musk wants a similar system for journalism itself). This particular analysis turned out to be off-base, which the average reader could have only anticipated with a more sophisticated understanding of the larger context — which CNN neglected to provide.

(On a related note, this is also worth a read: Insane UBS Bias On Tesla — UBS Analyst Recommended Selling $TSLA 18 Times In 2 Years, Recommended Buying $GM 35 Times In 7 Years.)

Then you have your run-of-the-mill clickbait:

Amusing as these headlines are, I wonder which journalistic mission they’re supposed to be consistent with? As I’ve said elsewhere, I’m puzzled why said purveyors are confused at how or why many outsiders no longer consider them as serious communicators of complex truths.

Hence my argument (outlined here) that Google News needs to cut out non-news articles, or else relegate them to a separate tab. There’s nothing newsworthy here, which is true of half or more of daily headlines on Musk’s Google News carousel. Clickbait isn’t news.

Now let’s turn to Joe Nocera, former NYT and current Bloomberg business columnist:

Consider Joe’s response. Instead of addressing a concrete criticism, he deflects.

Tesla is in the news, with hyperbolic and foreboding headlines, for non-issues all the time. Why? There’s an obvious profit motive for outlets to talk about Tesla instead of Ford or GM. Tesla draws in far more readers. But this seems a poor excuse for manufactured controversies, no?

A few examples of this principle in action:

  • Compare the news this summer about Model 3 production issues vs. Porsche having ten of their offices raided in connection to the Volkswagen emissions cheating scandal. Which should have gotten more airtime? Which did?
  • Quoting Trent Eady from a Medium piece “CBC ran a story about Tesla hiring two Canadian interns on to full-time positions. The story was picked up by Fox Business. (Even Elon Musk tweeting about the Fox Business article was then discussed in an article by CNN Money.) It’s hard to imagine a story about interns at another car company getting international news coverage. If coverage of mid-level VPs and directors is extraordinary, coverage of interns is something beyond that. For comparison, Fox Business’ article on the Tesla interns was 359 words long, whereas its article on the recent ouster of Volkswagen CEO Matthias Mueller ran just 236 words.”

Perhaps influential figures like Joe would better serve their readers by attempting to improve press treatment rather than criticizing those quite reasonably offended by its current state.

While I’ve largely left out references to the cave rescue narrative here (as that’s a sprawling story that deserves its own reading), I do want to consider one take to give the sense of two particular species of problem.

From The Guardian:

The latest bad news came after the entrepreneur got into a confrontation with Vernon Unsworth, a British cave diver who helped rescue a team of Thai soccer players from a system of flooded caves. Musk launched a personal attack on the rescue worker after Unsworth questioned the usefulness of a mini-submarine Musk offered help in the rescue. Musk was ultimately forced to apologise.

  1. By his own confession, Unsworth isn’t a cave diver. He’s a caver/spelunker. (This isn’t a huge point, but I’m surprised at how many outlets are still referring to him as one.)
  2. Note how they link to another Guardian article when implying that the apology was “forced”. Now go read the linked article and see what is says about that exact claim. This kind of thing happens a lot, and has a lot to do with how faulty narratives spread.

(To expand on #1, consider how The Guardian framed Unsworth’s US lawsuit this week: British diver sues Elon Musk for $75,000 over ‘pedo’ claim. That headline is objectively incorrect in two separate ways. First, Unsworth not being a diver. Second, the lawsuit isn’t for $75k. It’s for damages “in excess of $75k”, which is the mandatory minimum per 28 U.S. Code § 1332 to be eligible for the court in question. The actual suit is for unspecified damages, both compensatory and punitive. Said amounts would be determined by jury upon conviction, but could easily be 10-100x the quoted amount.)

As the old parable goes, those who can be trusted with little are trusted with much. If you consistently get the little details right, people will trust you with the harder, weightier things. While I went into this experience being a fan of The Guardian’s international coverage, I’m concerned at how often they got the little things wrong.

Speaking of misleading headlines, this one was a doozy:

Then, some hours later:

Notice the switch in tenses. That’s important.

Here are the first three paragraphs from the original:

And then the updated text:

So, basically, the original was a lazy re-write of something Reuters had reported earlier. But instead of just linking to said article, the author went freestyle. And, in doing so, they portrayed it as if BlackRock was doing something in the present timeline — when, in reality, the vote being discussed had taken place some two months earlier.

Beyond the obvious, this is also harmful in a subtler way. Lots of bots trade on headline sentiment. That original headline very likely had an immediate impact on the stock price (small, perhaps, but no less concerning for being so — especially given how bots can have feedback effects on each other).

For our finale, let’s begin with a stray sentence from an otherwise unremarkable Forbes contributor piece:

There are a growing number of liens against [Tesla] for unpaid bills.

If true, that could very well be problematic. But is it true? And where did the author get this idea?

Five days prior, the WSJ published this: Some Tesla Suppliers Fret About Getting Paid (paywall).

A few excerpts:

Separately, several suppliers in interviews said Tesla has tried to stretch out payments or asked for significant cash back. And in some cases, public records show, small suppliers over the past several months have claimed they failed to get paid for services supplied to Tesla.

Tesla has improved its on-time payments to production-related suppliers to about 95% from 90% last year, according to people familiar with the matter. For non-production suppliers, Tesla is paying on time about 80% of the time, the people said.

“We’re not behind because we can’t pay them,” Tesla Chief Executive Elon Musk said in an interview Friday. “It is just because we’re arguing whether the parts are right.

The suppliers collectively represent a sliver of the hundreds of vendors that provide Tesla with components, tooling of manufacturing parts and services such as building construction. But taken together, the survey, interviews and documents show some suppliers are anxious about Tesla’s ability to pay them back.

Skipping a bit…

All of the respondents to the survey said they wanted to sustain or grow their business with the auto maker, and none wanted to exit.

And lastly…

Public records show 16 companies since October have taken the unusual step of filing mechanic’s liens — or legal claims seeking unpaid compensation — against Tesla claiming bills haven’t been paid for supplies and services. Previously, only four liens had been filed against Tesla in all of 2015 and 2016 combined.

The liens were mostly filed this year in Alameda County, Calif., by small subcontractors against Tesla and contractors of the auto maker, primarily for providing work at the company’s Fremont factory. Some of the suppliers have since been paid, and the total outstanding dollar amount of claims is relatively small, totaling nearly $8 million, according to the documents.

Liens filed by suppliers against auto makers are rare, say automotive industry specialists. “When a customer is having financial issues…suppliers start filing liens to protect their secured position to ensure they are paid,” said Dan Sharkey, a lawyer at Brooks, Wilkins, Sharkey & Turco PLLC who specializes in supply-chain issues.

Mr. Ahuja, Tesla’s CFO, said it would be wrong to see the liens by subcontractors as a sign of financial distress. “It is an issue between the subcontractor and contractor,” he said, adding that it is common practice for subcontractors to name the manufacturer in a lien to create pressure on it.

$8 million! With all else that’s going on, who seriously believes that Tesla is going to risk negative headlines over $8 million in small claims? Yet the Forbes guy pulled what he wanted from the WSJ piece (or whatever else he read), obvious logic and distinctions between contractors and subcontractors be damned.

These things may seem small. But they compound, and compound. And few seem all that interested in correcting the record, especially once the record grows very large and very solidified, and especially since so many journalists have shown themselves quick to equivocate fact-checking with fandom (their response to my original write-up was, ahem, less than charitable).

This is a problem, no?

All said, I don’t think many in the media are biased against Tesla directly (though a few do seem to have weird obsessions driven by some underlying desire to see Musk fall). More generally, I’d point to what Jon Stewart once said about “the bias of the mainstream media [being] towards sensationalism, conflict, and laziness”. There’s also a strong tribal bandwagon effect, where most have already chosen their side prior to picking up the pen or making their click. It’s hard to find truly neutral coverage that’s written for an undecided audience.

I don’t think this means we’re in some special age of shoddy journalism. But I would argue that many aspects of the rapid-response, hot-take, clickshare model have left otherwise quality journalists producing something other than their best work.

Trouble is, we need their best work right now — urgently.

Note: For more about the influence of short-sellers on coverage, see points #1 and #2 here. As for the Thai cave rescue, part #1 here and the follow-up here.

I like context, nuance, and whatever the opposite of tribalism is.

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