Tesla shares have soared 300% in six months, hitting an all-time high of over $900 on Tuesday.
Investors, analysts, and politicians are warning investors the rally won’t last.
“I have no doubt it will end in tears for many people,” one investor said.
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Tesla shares have surged about 300% in the past six months, hitting an all-time high of over $900 on Tuesday. Traders, analysts, and politicians are lining up to warn investors that the run up won’t last.
“This is obviously a computer-generated rally, it’s not a reflection on the company, or on valuation. It’s just a trade,” Andrew Left, the activist short seller behind Citron Research, told MarketWatch this week.
“Yes, I’m shorting it … whoever bought it at these prices has to flush it out, and when it flushes, it’s going to flush hard,” he added.
Left’s comments came after Citron blasted the stock rally as unsustainable.
“We believe even Elon would short the stock here if he was a fund manager,” the equity-research publisher tweeted on Tuesday. “This is no longer about the technology, it has become the new Wall St casino.”
Others have warned Tesla’s rally will hurt those left holding the stock when the music stops.
“This is an incredibly dangerous place to be buying the stock and I have no doubt it will end in tears for many people,” trader and analyst Jani Ziedins wrote in a recent post on his Cracked Market blog.
“Owning a stock that’s tripled over the last few months is great, but don’t mistake serendipity for skill,” he continued. “While the fools are spending all of their time daydreaming about what they will buy when the stock breaks $1,200, smart money is selling their stock to those greedy dreamers.”
Matt Maley, chief market strategist at Miller Tabak, echoed those sentiments in a CNBC interview this week.
“This is taking Tesla well above a level that would be supported by its current fundamentals,” he said. “The stock is going to get absolutely clobbered at some point before long.”
Even former presidential candidate Ralph Nader sounded the alarm, warning Tesla could take down the entire stock market.
“When the stock market bubble implodes, it will have been started by the surge in Tesla shares beyond speculative zeal,” he tweeted.
“Watch out Tesla believers,” he added in a follow-up tweet.
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NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the ‘3rd wave’ firms that are leading the next round of tech disruption
The big tech companies have announced aggressive steps to keep trolls, bots and online fakery from marring another presidential election — from Facebook’s removal of billions of fake accounts to Twitter’s spurning of all political ads.
But it’s a never-ending game of whack-a-mole that’s only getting harder as we barrel toward the 2020 election. Disinformation peddlers are deploying new, more subversive techniques and American operatives have adopted some of the deceptive tactics Russians tapped in 2016. Now, tech companies face thorny and sometimes subjective choices about how to combat them — at times drawing flak from both Democrats and Republicans as a result.
This is our roundup of some of the evolving challenges Silicon Valley faces as it tries to counter online lies and bad actors heading into the 2020 election cycle:
1) American trolls may be a greater threat than Russians
Russia-backed trolls notoriously flooded social media with disinformation around the presidential election in 2016, in what Robert Mueller’s investigators described as a multimillion-dollar plot involving years of planning, hundreds of people and a wave of fake accounts posting news and ads on platforms like Facebook, Twitter and Google-owned YouTube.
This time around — as experts have warned — a growing share of the threat is likely to originate in America.
“It’s likely that there will be a high volume of misinformation and disinformation pegged to the 2020 election, with the majority of it being generated right here in the United States, as opposed to coming from overseas,” said Paul Barrett, deputy director of New York University’s Stern Center for Business and Human Rights.
Barrett, the author of a recent report on 2020 disinformation, noted that lies and misleading claims about 2020 candidates originating in the U.S. have already spread across social media. Those include manufactured sex scandals involving South Bend, Ind., Mayor Pete Buttigieg and Sen. Elizabeth Warren (D-Mass.) and a smear campaign calling Sen. Kamala Harris (D-Calif.) “not an American black” because of her multiracial heritage. (The latter claim got a boost on Twitter from Donald Trump Jr.)
Before last year’s midterm elections, Americans similarly amplified fake messages such as a “#nomenmidterms” hashtag that urged liberal men to stay home from the polls to make “a Woman’s Vote Worth more.” Twitter suspended at least one person — actor James Woods — for retweeting that message.
“A lot of the disinformation that we can identify tends to be domestic,” said Nahema Marchal, a researcher at the Oxford Internet Institute’s Computational Propaganda Project. “Just regular private citizens leveraging the Russian playbook, if you will, to create … a divisive narrative, or just mixing factual reality with made-up facts.”
Tech companies say they’ve broadened their fight against disinformation as a result. Facebook, for instance, announced in October that it had expanded its policies against “coordinated inauthentic behavior” to reflect a rise in disinformation campaigns run by non-state actors, domestic groups and companies. But people tracking the spread of fakery say it remains a problem, especially inside closed groups like those popular on Facebook.
2) And policing domestic content is tricky
U.S. law forbids foreigners from taking part in American political campaigns — a fact that made it easy for members of Congress to criticize Facebook for accepting rubles as payment for political ads in 2016.
But Americans are allowed, even encouraged, to partake in their own democracy — which makes things a lot more complicated when they use social media tools to try to skew the electoral process. For one thing, the companies face a technical challenge: Domestic meddling doesn’t leave obvious markers such as ads written in broken English and traced back to Russian internet addresses.
More fundamentally, there’s often no clear line between bad-faith meddling and dirty politics. It’s not illegal to run a mud-slinging campaign or engage in unscrupulous electioneering. And the tech companies are wary of being seen as infringing on American’s right to engage in political speech — all the more so as conservatives such as President Donald Trump accuse them of silencing their voices.
Plus, the line between foreign and domestic can be blurry. Even in 2016, the Kremlin-backed troll farm known as the Internet Research Agency relied on Americans to boost their disinformation. Now, claims with hazy origins are being picked up without need for a coordinated 2016-style foreign campaign. Simon Rosenberg, a longtime Democratic strategist who has spent recent years focused on online disinformation, points to Trump’s promotion of the theory that Ukraine significantly meddled in the 2016 U.S. election, a charge that some experts trace back to Russian security forces.
“It’s hard to know if something is foreign or domestic,” said Rosenberg, once it “gets swept up in this vast ‘Wizard of Oz’-like noise machine.”
3) Bad actors are learning
Experts agree on one thing: The election interference tactics that social media platforms encounter in 2020 will look different from those they’ve trying to fend off since 2016.
“What we’re going to see is the continued evolution and development of new approaches, new experimentation trying to see what will work and what won’t,” said Lee Foster, who leads the information operations intelligence analysis team at the cybersecurity firm FireEye.
Foster said the “underlying motivations” of undermining democratic institutions and casting doubt on election results will remain constant, but the trolls have already evolved their tactics.
For instance, they’ve gotten better at obscuring their online activity to avoid automatic detection, even as social media platforms ramp up their use of artificial intelligence software to dismantle bot networks and eradicate inauthentic accounts.
“One of the challenges for the platforms is that, on the one hand, the public understandably demands more transparency from them about how they take down or identify state-sponsored attacks or how they take down these big networks of authentic accounts, but at the same time they can’t reveal too much at the risk of playing into bad actors’ hands,” said Oxford’s Marchal.
Researchers have already observed extensive efforts to distribute disinformation through user-generated posts — known as “organic” content — rather than the ads or paid messages that were prominent in the 2016 disinformation campaigns.
Foster, for example, cited trolls impersonating journalists or other more reliable figures to give disinformation greater legitimacy. And Marchal noted a rise in the use of memes and doctored videos, whose origins can be difficult to track down. Jesse Littlewood, vice president at advocacy group Common Cause, said social media posts aimed at voter suppression frequently appear no different from ordinary people sharing election updates in good faith — messages such as “you can text your vote” or “the election’s a different day” that can be “quite harmful.”
Tech companies insist they are learning, too. Since the 2016 election, Google, Facebook and Twitter have devoted security experts and engineers to tackling disinformation in national elections across the globe, including the 2018 midterms in the United States. The companies say they have gotten better at detecting and removing fake accounts, particularly those engaged in coordinated campaigns.
But other tactics may have escaped detection so far. NYU’s Barrett noted that disinformation-for-hire operations sometimes employed by corporations may be ripe for use in U.S. politics, if they’re not already.
He pointed to a recent experiment conducted by the cyber threat intelligence firm Recorded Future, which said it paid two shadowy Russian “threat actors” a total of just $6,050 to generate media campaigns promoting and trashing a fictitious company. Barrett said the project was intended “to lure out of the shadows firms that are willing to do this kind of work,” and demonstrated how easy it is to generate and sow disinformation.
Real-life examples include a hyper-partisan skewed news operation started by a former Fox News executive and Facebook’s accusations that an Israeli social media company profited from creating hundreds of fake accounts. That “shows that there are firms out there that are willing and eager to engage in this kind of underhanded activity,” Barrett said.
4) Not all lies are created equal
Facebook, Twitter and YouTube are largely united in trying to take down certain kinds of false information, such as targeted attempts to drive down voter turnout. But their enforcement has been more varied when it comes to material that is arguably misleading.
In some cases, the companies label the material factually dubious or use their algorithms to limit its spread. But in the lead-up to 2020, the companies’ rules are being tested by political candidates and government leaders who sometimes play fast and loose with the truth.
“A lot of the mainstream campaigns and politicians themselves tend to rely on a mix of fact and fiction,” Marchal said. “It’s often a lot of … things that contain a kernel of truth but have been distorted.”
One example is the flap over a Trump campaign ad — which appeared on Facebook, YouTube and some television networks — suggesting that former Vice President Joe Biden had pressured Ukraine into firing a prosecutor to squelch an investigation into an energy company whose board included Biden’s son Hunter. In fact, the Obama administration and multiple U.S. allies had pushed for removing the prosecutor for slow-walking corruption investigations. The ad “relies on speculation and unsupported accusations to mislead viewers,” the nonpartisan site FactCheck.org concluded.
The debate has put tech companies at the center of a tug of war in Washington. Republicans have argued for more permissive rules to safeguard constitutionally protected political speech, while Democrats have called for greater limits on politicians’ lies.
Democrats have especially lambasted Facebook for refusing to fact-check political ads, and have criticized Twitter for letting politicians lie in their tweets and Google for limiting candidates’ ability to finely tune the reach of their advertising — all examples, the Democrats say, of Silicon Valley ducking the fight against deception.
Jesse Blumenthal, who leads the tech policy arm of the Koch-backed Stand Together coalition, said expecting Silicon Valley to play truth cop places an undue burden on tech companies to litigate messy disputes over what’s factual.
“Most of the time the calls are going to be subjective, so what they end up doing is putting the platforms at the center of this rather than politicians being at the center of this,” he said.
Further complicating matters, social media sites have generally granted politicians considerably more leeway to spread lies and half-truths through their individual accounts and in certain instances through political ads. “We don’t do this to help politicians, but because we think people should be able to see for themselves what politicians are saying,” Facebook CEO Mark Zuckerberg said in an October speech at Georgetown University in which he defended his company’s policy.
But Democrats say tech companies shouldn’t profit off false political messaging.
“I am supportive of these social media companies taking a much harder line on what content they allow in terms of political ads and calling out lies that are in political ads, recognizing that that’s not always the easiest thing to draw those distinctions,” Democratic Rep. Pramila Jayapal of Washington state told POLITICO.
Need to Impeach, the nonprofit funded by billionaire Tom Steyer that had been a thorn in Pelosi’s side for the better part of two years, only had good things to say.
“People will look back at this moment as the day Congress stood up for democracy, American values, and our constitution and fought back against the corrupt, criminal president, Donald Trump,” Nathaly Arriola, the group’s executive director, said in a statement.
Need to Impeach has now turned its attention to vulnerable Senate Republicans, whom it announced on Tuesday it will be pressing to back impeachment with over $3 million in television and digital advertisements.
But beneath the praise and comity, there is some disagreement among progressive groups as to how to proceed.
At one end of the debate is a smaller group of progressive activists and experts worried that the impeachment inquiry risks at once dragging on too long and covering too few of the president’s infractions.
And on the other side of the spectrum are groups like Need to Impeach, as well as officials, activists and strategists who see no need, for the time being, to exert additional public pressure on congressional Democrats.
“We’re getting it right here,” said Greg Pinelo, a veteran Democratic media strategist who helped develop advertisements for both Obama campaigns. “You can argue about whether we should have got here sooner. But facts on the ground change ― and the facts on the ground right now suggest a really focused effort.”
Not everyone is content though. Heidi Hess, who runs the progressive phone company Credo’s issue campaigns at Credo Action, expressed disappointment in Speaker Pelosi’s press conference on Tuesday.
Hess is calling for a timeline for completing the investigation and a deadline to vote on articles of impeachment that are reported out. She fears that allowing the process to drag on could give Trump an opportunity to sow more chaos and diminish public support for the process.
“Unless we have deadlines, then for us, that is still them telegraphing that what [Democrats] want is to stall,” she said.
Credo Action, the nonpartisan, pro-democracy nonprofit Free Speech for People and several other groups have called for the House Judiciary Committee to report out articles of impeachment against Trump by Nov. 1 and a vote on those articles by Nov. 15. They are also demanding an immediate end to the current congressional recess in the interest of expediting the process.
Another priority for these liberal critics is impeaching Trump on the broadest possible grounds, which they worry Democratic leadership is not adequately interested in. Credo Action is part of a coalition of liberal groups and legal experts, under the intellectual leadership of Free Speech for People, calling for Trump to be impeached for at least 12 different reasons. The reasons, which the groups outlined in a July 30 letter to the House Judiciary Committee Chairman Jerrold Nadler of New York, fall under the broad categories of abuse of power, corruption of the electoral process, promotion of racial hostility, and corruption and self-enrichment.
“We remain deeply concerned that Congress is not addressing this constitutional crisis with the urgency that’s required at the moment,” said John Bonifaz, an attorney and co-founder of Free Speech for People.
Bonifaz helped develop the coalition’s list of impeachable offenses and advised Democratic Reps. Al Green of Texas and Rashida Tlaib of Michigan on their earlier efforts to initiate impeachment inquiries. He worries that failure to hold Trump accountable for the full scope of his misconduct could again set an “extremely dangerous precedent” for presidential impunity.
Hess cited the possibility of a repeat of the articles of impeachment against then-President Richard Nixon. Congress chose not to issue articles of impeachment related to Nixon’s secret bombing of Cambodia, which Hess and other left-leaning activists regard as a mistake that helped future presidents prosecute foreign interventions illegally.
Pelosi has not set any explicit deadlines for the House Judiciary Committee to report out articles of impeachment. But at a press conference on Wednesday, the speaker warned that refusals by the Trump administration to cooperate with the House’s investigation into Trump’s request that Ukraine investigate former Vice President Joe Biden and his son Hunter would be regarded as obstruction of justice.
“We do not want this to drag on for months and months, which appears to be the [White House’s] strategy,” Pelosi said.
A lot of the work on the other misconduct has already been done. I think [impeachment] will be broad and fast.Rep. Ro Khanna (D-Calif.)
Pelosi has also said that House committees investigating other elements of Trump’s potential misconduct will report their findings to the Judiciary Committee, leaving open the possibility that impeachment will cover a broader range of matters.
Rep. Ro Khanna, a California Democrat and vice chair of the Congressional Progressive Caucus, stood out among his colleagues with a public appeal last week for Congress to postpone its two-week recess in order to work on the impeachment inquiry. He predicted that focusing on a broad range of Trump’s misdeeds is compatible with a rapid process.
“A lot of the work on the other misconduct has already been done,” Khanna told HuffPost. “I think [impeachment] will be broad and fast.”
But assurances like those are not enough for Hess, Bonifaz and some other outspoken progressives who worry that the absence of firmer commitments from Pelosi right now, when the pressure to placate the grassroots is perhaps greatest, raises the risk of a looser approach going forward.
The trouble for these Pelosi critics is that many of their normally allied organizations and activists are thus far unwilling to publicly criticize the speaker’s management of the process.
Spokespeople for the Democracy for America, the Progressive Change Campaign Committee and Indivisible all expressed support for an impeachment process that is both prompt and broad in scope without joining in criticism of Pelosi.
Meagan Hatcher-Mays, who runs Indivisible’s democracy program, shared Hess’ commitment to a rapid process, as well as a wide-ranging inquiry. “Every day that he’s in office is a new threat to our election security,” she said. But Indivisible is not setting out a hard deadline; Hatcher-Mays said the group hopes it nears completion before Thanksgiving.
Similarly, PCCC spokeswoman Maria Langholz called Pelosi’s approach of having committees of jurisdiction submit to the Judiciary Committee the results of their investigations into Trump “smart.”
And Charles Chamberlain, executive director of Democracy for America, which rivals Credo Action and PCCC in online organizing heft, suggested a middle path in terms of the scope of the impeachment articles ― something shy of 12, but more than just one about Trump’s pressure on Ukraine.
Chamberlain said he is “not really concerned” with the speed of the process so far, but he would like to see the House move on it quickly so it can proceed to the Senate. The sooner it gets there, he argued, the sooner it can be used against Republicans senators up for reelection in swing states.