SEC Lawsuit

[SO16]

I’m a fan of EVs & like to keep up with Tesla via the forums. It’s possible to be interested in Tesla but think Musk is a tool. Not mutually exclusive.

Well without Elon, you wouldn’t have Tesla to talk about. Take the good with the bad.

 

[thegruf]

Your version of Apple history skipped quite a few points. Your statements are true, but incomplete and paints an inaccurate picture. It happened over 30 years ago, so maybe you forgot, or you just didn't know. But Jobs was forced out because of problems at Apple. The Apple Lisa, for example. Yes, the company did even more poorly afterwards, but Apple was experiencing a lot of problems even before that. In addition, Job's next company, NEXT, was not very successful at all (business-wise, not in terms of legacy).

You're trying to link Jobs with 100% success, but the facts do not support that.

Moreover, many people have noted that Jobs changed and matured in many ways in the decade or so that he was outside Apple. This makes sense. You can't assume that a successful Jobs in the 2000s (or even the entrepreneur Jobs of the 70s) would have done well running a large company in the 80s, (And in fact, he didn't do so well in the 80s.)

fair comment

 

[Dan Detweiler]

How do you square the board taking their fiduciary responsibilities seriously when dealing with a CEO that causes massive valuation changes to the company stock every time he sends out a half baked tweet?

Generally curious.

I love Elon Musk, his vision is incredible. He is also a lot like a kid running around with a box of matches and a can of gasoline.

Would kill to be a fly on the wall at next board meeting that will probably revolve around this latest legal issue.

It's a lot easier to take the board seriously if you are willing to look beyond the last two months. How feduciarily responsible is it to support the man that saw to the unprecedented growth the company has seen over the last decade? How rich has he made true investors over that time? The only financial losers over the long term have been the shorts and day traders, and they seem to have all the pull and be the only ones the SEC is concerned about.

I can't help but think of a guy like Bob Lutz. He runs his company into the ground...literally into bankruptcy, yet he is heralded as the quintessential automotive CEO of our time. The expert on how to run a car company. smh

Dan

 

[dqd88]

Lets be honest,

Elon has really dropped the ball on this one. I have been a big time Elon fan and owned Tesla stock since 2012. But his erratic bahaviour has now come back to haunt us all.

Just from memory, of previous mishaps.

1) “Stormy day in shortville”- stay humble, why engage the shorts in a twitter war. Elon Musk’s image was one of genius, visionary, and seriel entrepreneur. From my impression since 2012 Elon always seemed like a down to earth guy trying to change the world. Why get low and dirty and engage the shorts when Tesla’s stock price is sky rocketing. The street loves the underdog.

2) Montana Skeptic’s mom. Didnt have to go there. You are Elon Musk and CEO of Tesla and Space X, I believe his brand alone adds over $20 billion to Tesla’s market cap. He then went further and tweeted Miley Cyrus twerking.... wtf??!!

3)Disses analyst at earnings call and had to apologize for it after because share price tanked the next day

4)Pedo Guy- again, dont even put Pedo and Tesla in the same searchable headline. Everything you do affects Tesla’s branding and image.

5)Not raising capital - Wall st. was literally willing to shove money in his pockets if he were to raise last year in the 300s. Why keep “Tesla running out of money” as a narrative. Could of added a comfortable cushion in case of unexpected events. Sure it dillutes him a little, but who can ever challenge Elon(vintage Elon) as CEO.

6)Twitter “funding secured”

7)Send shorts to Einhorn - again, everyone cheers for the underdog and the war hasnt yet been won. And even if it has, win with grace.

8)Smokes weed on interview. Not a huge deal, but right now the street is trying to get a read on his judgement and decision making ability. Not now Elon!

It feels like the Elon we use to know(prior to 2016) has been switched with someone else completely. Where is the man whos mission was to get us off oil dependency, was genuine, spoke his mind but yet cautious with his message?

As a long time Tesla/Elon supporter its sad to see this happen to him. At first, it didnt seem like a huge deal, but now Im starting to lose faith.

I kinda agree on one hand, but on the other i feel like we're all whiny little b*tches. We're nitpicking. Nothing he's done is that bad. But knowing how people react, I wish he's just stay silent and not give them ammunition.

 

[dqd88]

Elon's gonna fight this and win. Read the complaint. It's lame. Contradicts itself and is childish.

 

[dqd88]

Because he had nothing to do with getting Tesla to this point.

I love Elon. But the public markets don't like off the cuff types like Elon. That's why I wish Tesla were private. Then he could do what he wants. I f-ing hate wall street, ICE, bloomberg, cnbc, the SEC, Oil, and all the low IQ rednecks who are too stupid to get it.

 

[Dan Detweiler]

Interesting to learn that the SEC offered Elon a plea deal. It was only after he declined and decided to fight it that they drafted the law suit. I am sure Elon has some pretty substantial litigators in his corner as well. I can't believe this is any sort of slam dunk for the SEC.

Dan

 

[lklundin]

That tweet caused a short squeeze that cost investors an estimated 1.6B. Regardless of how you feel about short sellers, if you lie to destroy their positions, there are consequences. Not to mention, longs who piled in on the news got burned when it reversed.

Why it's a big deal is only partially to do with Tesla/Elon. It cannot be open season for a public company to make material misstatements, especially on something as serious as taking a company private. The stakes of allowing such a thing from such a publicly visible company implies the markets are completely lawless.

As beloved a company as Tesla is, my guess is the SEC didn't want to go near them knowing they'd get a lot of mud on their shoes in the process (already seeing posts that the SEC is the bad guy), but Elon left them no choice.

As CEO Elon Musk has a fiduciary responsibility to Tesla's investors.

The short sellers have with their trades by definition interests that are exactly opposite of Tesla's investors,
and as such anything that Elon Musk does for the benefit of Tesla's investors will hurt Tesla's short sellers.

Regardless of whether short sellers were actually hurt by Musk's communications, the claim that they were hurt would only imply that the communications were beneficial to Tesla's investors.

 

[dark cloud]

As CEO Elon Musk has a fiduciary responsibility to Tesla's investors.

The short sellers have with their trades by definition interests that are exactly opposite of Tesla's investors,
and as such anything that Elon Musk does for the benefit of Tesla's investors will hurt Tesla's short sellers.

Regardless of whether short sellers were actually hurt by Musk's communications, the claim that they were hurt would only imply that the communications were beneficial to Tesla's investors.

Is their any governing body that investigates friends or family members of the SEC members to see if they shorted TSLA before the SEC announcement?

 

[Barklikeadog]

Interesting to learn that the SEC offered Elon a plea deal. It was only after he declined and decided to fight it that they drafted the law suit. I am sure Elon has some pretty substantial litigators in his corner as well. I can't believe this is any sort of slam dunk for the SEC.

Dan

I saw that..... you take the no guilt settlement and pay a fine! Why pass on that? We are here talking about a settlement being the best result. It's not like he didn't do what he did. FIghting the SEC is never a good idea.

 

[Barklikeadog]

As CEO Elon Musk has a fiduciary responsibility to Tesla's investors.

The short sellers have with their trades by definition interests that are exactly opposite of Tesla's investors,
and as such anything that Elon Musk does for the benefit of Tesla's investors will hurt Tesla's short sellers.

Regardless of whether short sellers were actually hurt by Musk's communications, the claim that they were hurt would only imply that the communications were beneficial to Tesla's investors.

Did people buy the stock long based on the $420 premium?

 

[Dan Detweiler]

I saw that..... you take the no guilt settlement and pay a fine! Why pass on that? We are here talking about a settlement being the best result. It's not like he didn't do what he did. FIghting the SEC is never a good idea.

You may be right on that but what he is doing is consistent with who he is...right or wrong. He believes that he was justified in saying what he said. He believes he did the right thing. When he feels he has been wrongly accused of something, especially something questioning his character, he always chooses to fight. It may cost him his job in the end...I certainly hope not, but that is who he is. I think he probably viewed the settlement offer as extortion. Getting money from him and his company when he believes they did nothing wrong. Remember this is a man that was pretty brutally bullied on a regular basis as a child. He succeeded in his life by always fighting against what he perceives as bullying or unfair practices. It's in his DNA. Many see this as his most endearing quality. It may cost him him greatly in the end but he sees this as a attack of his character and he is going to fight it. I really hope he can pull it off.

Dan

 

[lklundin]

Did people buy the stock long based on the $420 premium?

Yes.

I know because I did.

People buy based on alll kinds of material projections, some of which in turn do not come true.

That's a fact of life.

For all that we know, Elon did the right thing:
1) He became convinced that he should and could take Tesla private.
2) He informed everyone (not just the larger stock holders and "Wall Street").
3) After having two buyers lined up (Saudis + VW), he realized (in part due to an appeal from e.g. Ark Invest),
that he should not take Tesla private.
4) The deal was cancelled.
5) The interim trading was beneficial to some, to others it was not.
6) End of story.

 

[dqd88]

Interesting to learn that the SEC offered Elon a plea deal. It was only after he declined and decided to fight it that they drafted the law suit. I am sure Elon has some pretty substantial litigators in his corner as well. I can't believe this is any sort of slam dunk for the SEC.

Dan

Exactly. Don't give

I saw that..... you take the no guilt settlement and pay a fine! Why pass on that? We are here talking about a settlement being the best result. It's not like he didn't do what he did. FIghting the SEC is never a good idea.

Yes it is. The SEC is not god. Fight back and they will back down. Did you read the complaint? Written by weakass 2nd rate lawyers. They have a couple points they could win but nothing substantial. Def no slam dunk

 

[Krugerrand]

It doesn’t matter what they say or what Elon tweets. SEC won’t go away till they get their pound of flesh. We will see how that manifests and we will see what investor confidence looks like over next week.

Nice deflect.

 

[dqd88]

Yes.

I know because I did.

People buy based on alll kinds of material projections, some of which in turn do not come true.

That's a fact of life.

For all that we know, Elon did the right thing:
1) He became convinced that he should and could take Tesla private.
2) He informed everyone (not just the larger stock holders and "Wall Street").
3) After having two buyers lined up (Saudis + VW), he realized (in part due to an appeal from e.g. Ark Invest),
that he should not take Tesla private.
4) The deal was cancelled.
5) The interim trading was beneficial to some, to others it was not.
6) End of story.

Exactly. Elon was being as transparent as it gets. He operated with 100% integrity. No good deed goes unpunished

 

[bkp_duke]

Elon's believed a lot of things, and been wrong on a decent number of them (automating "everything" for the Model 3 production line being one of them). He's an incredibly thin-skinned person, and regardless of what he wants/desires there are rules/regulations/laws that govern how C-level execs at publicly traded companies can act. He broke the law, plain and simple, and any judge overseeing this is going to quickly agree with that interpretation.

If he was offered a settlement, that didn't involve him leaving the company, then he was a Grade-A moron for not taking it. This fight is yet one more thing he doesn't have time for.

 

[Chickenlittle]

Elon's believed a lot of things, and been wrong on a decent number of them (automating "everything" for the Model 3 production line being one of them). He's an incredibly thin-skinned person, and regardless of what he wants/desires there are rules/regulations/laws that govern how C-level execs at publicly traded companies can act. He broke the law, plain and simple, and any judge overseeing this is going to quickly agree with that interpretation.

If he was offered a settlement, that didn't involve him leaving the company, then he was a Grade-A moron for not taking it. This fight is yet one more thing he doesn't have time for.

He has two years to reply. That would be the time they would sideline him

 

[bkp_duke]

He has two years to reply. That would be the time they would sideline him

Yeah, this is not going to be a quick and done thing. It will hang over him and the company for years during the litigation (and probably suppress the share price as well - investors don't like "uncertainty").

 

[Wooloomooloo]

I’m a fan of EVs & like to keep up with Tesla via the forums. It’s possible to be interested in Tesla but think Musk is a tool. Not mutually exclusive.

It's also perfectly possible to respect someone enormously for their drive, talent, success and ability to push the envelope, and still recognize their flaws as a human being. May the first perfect person here cast the first stone... so to speak.

Steve Jobs? Bit of a dick at times quite frankly... but still immensely admirable, watchable (those key notes) and like it or not, he changed the way we interact with technology forever. I miss him, personally.

Elon Musk? A bit sensitive and stubborn (about the wrong things at times), but he is on track to change the way we think about cars, about space exploration and I'm sure soon about urban planning.

You don't have to be "all in" or completely out with these guys. As a Brit I can tell you one of our greatest heroes of modern times (Churchill) was also a bit of a tool (ask the Aussies about Gallipoli) but that doesn't detract from the great things he did later in life. In fact it's probably true that throughout history, some of the greatest minds belonged to some of the most flawed human beings.