Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Fact Checking]

If there had been no clarifying tweet, the original tweet might have been quickly forgotten, and the SEC response may never have occurred.

As per Tesla's response the Tesla securities lawyer raised the question of clarity - at which point it was probably prudent to clarify.

It's not Elon's and Tesla's fault that the SEC is abusing its regulatory powers to infringe on Elon's First Amendment rights to communicate.

 

[Krugerrand]

Where would he get the money? Hopefully not the Saudis.

He had the money last time. Yes. He did. And it wasn’t Saudi money. Not only that, he doesn’t need nearly so much now as the SP is significantly lower. Money is not an issue and wasn’t an issue last time.

 

[CuriousSunbird]

• Intent absolutely matters: if Elon's intent was to post non-material information then why would the settlement limit it? Elon's mistake created the appearance of material information, which was quickly corrected. The settlement doesn't cover tweets with unintentional meaning..

I think intent is not required here. Elon had an obligation to DILIGENTLY comply with the original order. If he tweeted without intent to violate but also without diligently checking that he wasn’t violating, he would still be in contempt.

 

[Fact Checking]

If I were the judge, in consideration that the SEC accepted this agreement and took $20 million dollars no less.

The SEC took 40 million dollars: 20-20 million from Elon and Tesla, plus they got two new board members and a tweet review process in place.

To suggest that they are not complying is rudiculous.

The SEC immediately asking for holding Elon in contempt is jumping the gun legally as well.

 

[EinSV]

So, would any "accredited investor" be able to invest in tesla after it goes private? I think they have a hard limit on total # of investors allowed.

I am not sure about hard limits on the number of shareholders but one way this is done is a special purpose vehicle is set up that owns a big chunk of stock and individual investors indirectly own stock through ownership in the SPV. It is not perfect but can be done (limited to accredited investors though).

 

[SO16]

The SEC took 40 million dollars: 20-20 million from Elon and Tesla, plus they got two new board members and a tweet review process in place.

To suggest that they are not complying is rudiculous.

The SEC immediately asking for holding Elon in contempt is jumping the gun legally as well.

And the SEC has taken his many billions from us?

 

[Krugerrand]

If I were the judge, in consideration that the SEC accepted this agreement and took $20 million dollars no less. And then the SEC comes seeking relief when what has been said is within what was said on the earnings call, I would be asking the SEC a lot of pointed questions as to what they expected. I might want to review the fine in fact, perhaps it might be excessive. Perhaps I might want the SEC to submit a weekly review of all the Tweets by Elon as to their material impact so as to tune the process and expectations for both parties.

It seems to me the EC has vastly more status as to what is material vs a tweet where there is no expectation as to investment or equity expertise. But just my immaterial opinion.

Ha! The fine WAS excessive to the tune of $19,900,000.

 

[lascavarian]

Any chance this SEC kerfuffle could either:

1. Impact the closing of the Maxwell deal?
2. Impact Maxwell stock price?

 

[brian45011]

Whatever ends up happening here, you can't buy advertising this good. .. I don't think any of this is going to hurt Tesla with younger buyers. On the contrary, it's getting the word out that Tesla is now making a lot of cars.

It is less about younger buyers and more about institutions who owe their clients a fiduciary duty as to how long their investment committees are willing to hang on in the ups,downs and sharp curves of the Wild Mouse ride called TSLA.

 

[Fact Checking]

I think intent is not required here. Elon had an obligation to DILIGENTLY comply with the original order.

Firstly, comply he did: he tweeted already guided numbers outside trading hours and then diligently tweeted a clarification based on legal counsel, to make it super clear that even the slowest thinking shorts understood it.

(But, surprise, it's hard to make shorts understand something when their income depends on not understanding it.)

Secondly, intent still matters: I'm sure even you'd agree that if Elon intended to post material information that would be viewed differently by the judge from the case where he didn't intend to post material, market moving information?

Prediction: but you'll stay "concerned", regardless of what arguments you get as a reply, right?

 

[AlMc]

New job posting on the Tesla site: 'Twittersitter': Great pay and benefits. Job satisfaction; low and job longevity: brief

 

[SebastianR]

Fred: https://electrek.co/2019/02/25/tesla-tsla-stock-sec-elon-musk-violating-deal/

“The stock actually moved more from this news of the SEC seeking to hold Elon in contempt than from the actual tweet that they are apparently worried about moving the stock.

I think the SEC looks ridiculous here.”

Kinda have to agree with him here..,

 

[CuriousSunbird]

Firstly, comply he did: he tweeted already guided numbers outside trading hours and then diligently tweeted a clarification based on legal counsel, to make it super clear that even the slowest thinking shorts understood it.

(But, surprise, it's hard to make shorts understand something when their income depends on not understanding it.)

Secondly, intent still matters: I'm sure even you'd agree that if Elon intended to post material information that would be viewed differently by the judge from the case where he didn't intend to post material, market moving information?

Prediction: but you'll stay "concerned", regardless of what arguments you get as a reply, right?

The SEC's point on that is that issuing a clarification does not erase the original non-compliance.

I agree with you that lack of intent may be a mitigating factor when it comes to the penalty phase.

For the record, I am not currently short (actually or economically), although I may reinitiate a short (or long) position at any time.

 

[riverFox]

Where would he get the money? Hopefully not the Saudis.

I wish he was less confrontational with SEC, get them to be on his side investigating shorts rather than the other way round.

Peace was never an option

 

[anthonyj]

Let's think rationally here, folks. Dave Buttwinker left less than 24 hours after the tweet. Not a coincidence. He obviously thinks this is going to be a huge losing fight with the SEC, that might even hurt his image. If this was an easy fight, he would've stayed.

SEC does have a case. But I think this is all bologna and will pass with time.

Things to worry about:
Institutional investors may finally say screw this and sell
Fuds for days
Elon tweet meltdown
Ellison becomes CEO (lol)

Here is my prediction. More fud will drive TSLA to the unbreakable $250. Something magical will lift it to $380. Elon announces Go Private 2.0 at $420.69, with proof of secured funding. Everyone and their dog will short it for easy monies, causing a monster short squeeze when they realize he is serious. Then we buy the SEC, take it public and short it. Yeah

 

[Fact Checking]

The SEC's point on that is that issuing a clarification does not erase the original non-compliance.

Tesla's point is, which I share, is that there was no "non-compliance". The clarification tweet was simply trying to make sure that the first tweet is understood as the non-material information it was intended to be.

 

[Curt Renz]

No, I think if there’s any penalty at all, Elon takes Tesla private. I think this will be the final straw.

You could be right. He may have resumed serious consideration of privatization after the initial negative reactions to his February 19 tweets. Then his continuing the debate tonight makes one wonder how far such plans might have been advanced. Perhaps Larry Ellison was made a director because he might help with privatization. According to Wikipedia, Larry's personal worth is more than the current market cap of Tesla.

 

[SebastianR]

Let's think rationally here, folks

Ok

Dave Buttwinker left less than 24 hours after the tweet. Not a coincidence. He obviously thinks this is going to be a huge losing fight with the SEC, that might even hurt his image...

I cut the rest since it is not getting better. You are not helping. You don’t think rationally you run off with one possible (not likely) option. Lawyers don’t quit over the prospect of losing a case.

Folks, please be better than the TSLAQ trolls.

 

[azaz]

über bulls like Karen and fact checking were the same people saying Elon didn't violate the law with the 420 tweet either lol

 

[azaz]

.

Ok



You are not helping. You don’t think rationally you run off with one possible (not likely) option. Lawyers don’t quit over the prospect of losing a case.

Folks, please be better than the TSLAQ trolls.

lawyers quit all the time when their clients don't listen to them