BBBY crashing again as suppliers halt shipments; Elon Musk is a world-class engineer; Tennis tournament results

1) Bed Bath and Beyond (BBBY) is crashing again today as news continues to mount that, as I predicted in Thursday's e-mail, the company "is in a death spiral because it likely doesn't have enough liquidity to build inventory for the holidays and will therefore have to file for bankruptcy."

This Bloomberg story, Bed Bath & Beyond Taps Kirkland & Ellis for Help Addressing Debt Load, hit the wires on Thursday, contributing to the stock's 40% decline on Friday, and then this story broke after the close: Some Bed Bath & Beyond Suppliers Halt Shipments on Unpaid Bills. Excerpt:

Some Bed Bath & Beyond suppliers are restricting or halting shipments altogether after the home-goods retailer fell behind on payments, according to people familiar with the matter, complicating the company's scramble for liquidity...

A survey of vendors done by Pulse Ratings, an independent credit-rating and consulting firm, found that Bed Bath & Beyond was in arrears with all respondents, with some saying that more than half of their accounts receivable with the company were past due. The payments were late by as much as 90 days, the vendors said in the survey seen by Bloomberg.

When a company is hiring restructuring lawyers and suppliers are cutting it off, the end is near...

Inquiring minds want to know: How much of this information did billionaire activist investor and largest shareholder Ryan Cohen have when he dumped his entire stake last week at 2 to 3 times today's price??? I'm not the only one calling for the SEC to investigate: Calls for SEC probe mount after meme stock king's potential pump-and-dump of Bed Bath & Beyond shares.

I feel so badly for these poor inexperienced speculators who can't see the writing on the wall and are going to get destroyed: Ryan Cohen's Stock Sale Is No Problem for Bed Bath & Beyond's True Believers. Excerpt:

A stupefying rally in Bed Bath & Beyond's stock came skidding to a halt last week when one of the company's biggest shareholders cashed out.

Now, a crowd of individual investors say they are hoping to ride out the worst of the sell-off.

Even as Bed Bath & Beyond slumped Friday in its worst one-day pullback ever, individual investors continued to cheer the stock on social-media platforms like Reddit, Discord, and Twitter. Many posted emojis of diamonds and hands – Internet shorthand for someone who holds steadfast to their investments even when there is rising pressure to sell. Others tagged their posts with "HODL": hold on for dear life.

Their message to the world? We aren't giving up.

Wil Lobach, a 39-year-old investor from New Jersey, said he is hoping to use the sell-off as a way to add to his Bed Bath & Beyond holdings.

2) When I criticize Tesla (TSLA) CEO Elon Musk, as I often do, for being a pathological liar, an extreme narcissist, and, at times, a downright nasty human being, I always get a few angry e-mails from his fanboys (and, yes, they're all men).

And when I praise him, as I often do, for being one of the greatest entrepreneurs of all time who has shaken up multiple global industries and say that humanity owes him a debt of gratitude, I always get an earful from his many haters (also all men... in fact, I've never once received an e-mail from a woman about Musk or Tesla...).

I know I'm succeeding in my attempt to be fair and balanced if I get roughly equal amounts of venom from both sides.

I even have an e-mail list covering Tesla – if you wish to subscribe to it, simply send a blank e-mail to: tsla-subscribe@mailer.kasecapital.com.

One thing that really drives the haters crazy is when I say that Musk is a great engineer. They point out that he has no formal engineering training (true – he has a degree in physics and economics from the University of Pennsylvania) and dismiss him as a blowhard.

They couldn't be more wrong.

I learned this firsthand when I was stupid enough to be short TSLA shares from $7 to $41 in 2013 and 2014.

Seeing my pain and fearing (correctly) that I was making a terrible mistake, my cousin, a Stanford engineer with deep experience in the electric-vehicle sector, put me in touch with two of his friends, both of whom were early engineers at Tesla (when I talked to them in May and June of 2014, one was still there).

They both raved about Tesla in general and Musk in particular. One said:

The big guys are siloed. It's at the management level more than the engineering. Elon is an engineer – he thinks that way, applies physics to problems. The engineers I talk to at other companies get what we're doing – but the corporate will is a bigger barrier. Some execs get it, but not enough.

The other said:

Basically Elon and JD Straubel ran the show. Those two are the real deal. I would never in a million years bet against them. There's nothing they can't do.

Elon would always find a way to make it happen. A real entrepreneur like your cousin, but more stubborn. Straubel is absolutely brilliant and extremely level-headed clear vision, broad and deep.

Look at Better Place or Fisker (FSR) – they outsourced everything – and did it terribly. Had no engineers and technology. Good idea, but nothing else.

Driving the car is incredible – indescribable. Read recent Oatmeal cartoon at http://theoatmeal.com/comics/tesla_model_s. People are crazy for it. I don't think we've seen the network effects.

I'm sure the stock will be weak at some point as the Model X gets pushed back.

But the long-term vision of the company is so amazing...

They have been able to integrate an amazingly complex product amazingly well. I think they can do it for batteries as well...

Look under the hood of the Nissan Leaf – full of electronics yet only puts out 90 horsepower; Tesla's is tiny but has 400 hp; 4x the power at one-fifth the size.

For the other companies to compete, they would need to start with a blank sheet of paper; then would take 5-7 years to catch up with where Tesla is today.

It's not just technical know-how; it's culture. It's like Kodak – they had the technology but didn't fundamentally believe that that was the future. Or consider the iPod (there were MP3 players that had the same technology, but not the culture).

The competitors are so old and so slow – it makes me bullish on Tesla...

The other automakers aren't only behind in the car, but also in the superchargers. Being able to refuel an electric car adds value to the car...

So they're not just years ahead of other automakers, they're on a different field...

The head of Chrysler was encouraging people NOT to buy an electric Fiat because he loses $15,000 for every one sold. said the only reason Tesla is profitable is their high price point – why doesn't he copy it? They don't take Tesla seriously. think it's too small to consider. Big mistake. This little niche will explode. Then they'll be SO late – who will they buy batteries from (gigafactory)? Where will their cars be sold?

When you look at companies like Apple (AAPL) and Netflix (NFLX), nobody paid attention until it was too late.

Needless to say, I was smart enough to immediately cover my short and tell all of my friends that "TSLA is a bad short at any price."

Alas, I wasn't smart enough to go long the stock, which is up 22 times since then!

As further evidence of Musk's engineering prowess, check out this Reddit page: Evidence that Musk is the Chief Engineer of SpaceX. Excerpt:

There is a lot of skepticism of the claim that Musk is an engineer at all let alone the chief engineer of SpaceX. I wanted to collate the evidence backing it up here. I know some SpaceX employees have affirmed the claim.

I'm just looking for statements by credible sources that provide insight to what extent Musk is involved in concrete engineering decisions vs. managerial duties...

Here are three (of many) comments...

Kevin Watson, who developed the avionics for Falcon 9 and Dragon:

Elon is brilliant. He's involved in just about everything. He understands everything. If he asks you a question, you learn very quickly not to go give him a gut reaction.

He wants answers that get down to the fundamental laws of physics. One thing he understands really well is the physics of the rockets. He understands that like nobody else. The stuff I have seen him do in his head is crazy.

He can get in discussions about flying a satellite and whether we can make the right orbit and deliver Dragon at the same time and solve all these equations in real time. It's amazing to watch the amount of knowledge he has accumulated over the years.

Garrett Reisman, an engineer and former NASA astronaut:

He's obviously skilled at all those different functions, but certainly what really drives him and where his passion really is, is his role as CTO... Basically his role as chief designer and chief engineer. That's the part of the job that really plays to his strengths.

What's really remarkable to me is the breadth of his knowledge. I mean I've met a lot of super super smart people but they're usually super super smart on one thing, and he's able to have conversations with our top engineers about the software and the most arcane aspects of that, and then he'll turn to our manufacturing engineers and have discussions about some really esoteric welding process for some crazy alloy, and he'll just go back and forth and his ability to do that across the different technologies that go into rockets cars and everything else he does.

Josh Boehm, the former head of software quality assurance at SpaceX:

Elon is both the Chief Executive Officer and Chief Technology Officer of SpaceX, so of course he does more than just "some very technical work." He is integrally involved in the actual design and engineering of the rocket, and at least touches every other aspect of the business (but I would say the former takes up much more of his mental real estate). Elon is an engineer at heart, and that's where and how he works best.

3) My USTA age 40-plus 4.0 team initially didn't make sectionals (I'm not even sure we had a winning record), but we got invited when another team couldn't get nine players (each match is four doubles and one singles) to show up in Schenectady in the middle of August.

Here's a picture of our team, which represents the wonderful diversity of New York City:

The six-team tournament took place on Friday, Saturday, and yesterday at a nice 17-hard-court facility. I drove three hours from our lake home on Lake Sunapee, New Hampshire, where I'm spending three weeks this month, to Schenectady, New York, on Friday morning and played doubles twice that day with my friend Aaron. Here's a picture of us:

We played well and won a tight match 6-4, 2-6, 1-0 (winning the match tiebreaker 10-4) on Friday morning against the New Jersey team that won the tournament and then cruised 6-0, 6-2 against a weak team in the afternoon.

Our biggest challenge was that both of Aaron's calves were cramping up in the second set, but fortunately I had my HotShots and electrolyte tablets with me after my full-body-cramping debacle earlier this month, which I described in my August 5 e-mail.

Going into my singles match on Saturday morning, I was feeling confident as I had been playing some of my best tennis the previous week, but my game inexplicably fell apart from start to finish, as I couldn't hit a backhand or overhead to save my life and I lost 6-4, 6-3 to a guy I should have beaten. GRRRRRRR! My only consolation is that it didn't matter, as our team was already out of contention.

I missed my team's last two matches because I had to drive back for my mom's 82nd birthday on Saturday. Here are pictures of us over the years...

Happy birthday, Mom!

Best regards,

Whitney

P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.