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

[Krugerrand]

SEC.gov | Elon Musk Settles SEC Fraud Charges; Tesla Charged With and Resolves Securities Law Charge

www.sec.gov

And yet Musk and Tesla settled with SEC and agreed to pay a $40 million fine. He also stepped down as chairman. In the SEC’s opinion which is all that counts at the end of the day, funding was definitely NOT secured.
FACT: Musk never produced signed, documentary evidence of such funding. Not even a term sheet.

It was secured.

 

[Tony73]

Elon has repeatedly said that various companies of his could go bankrupt. While it hasn’t happened to any of them, there were a bunch of close calls. There is real downside potential to his risk taking, even if it isn’t often realized.

I think Musk can be a bit of a drama queen with the bankruptcy warnings. Maybe it is how he motivates his employees.
Both SpaceX and Tesla faced bankruptcy in the very early days; SpaceX after failing three times to get Falcon 1 orbit and Tesla in 2008 when the great financial crisis dried up financing.
However Musk’s more recent warnings about possible bankruptcy are not real. There was no immediate risk. Tesla could easily have raised money during model 3 production hell if it needed to. Same with SpaceX during the early days of Starship/Starlink. In fact, it’s been over two years since he said SpaceX faced a risk of bankruptcy if it didn’t get starship to orbit and start launching starlink v2 satellites with it. Neither has happened; SpaceX adapted by building the v2 mini satellites and launching them on falcon 9 while raising plenty of money along the way.

 

[Tony73]

If you were on a jury, I expect you would find guilty the person who was arrested for doing something they didn't want to do because someone else was holding a knife to their child's throat and told them to do it, or else.

Should you have actually followed the story you would know that the SEC held a knife to Tesla's metaphorical throat to coerce Elon to sign an agreement he did not actually agree with.

Left with the choice of holding to one's principles and risking a company that employed many people, as well as, breaking the trust of the shareholders who put their support behind him, he chose the lesser of two evils and went against his principles, signing under duress, for the greater goal of achieving the mission.

I thank him for that, and I despise the sort of people who employ such tactics. Those sort of people are second-cousins to those who parrot canned news without offering the back story for context. Like you have done.

All you offer is personal attacks and conspiracy theories. No signed documentary evidence of such funding exists.
Musk is a fighter. If he settled this case, it’s because his lawyers told him he didn’t have a snowball’s chance in hell.
You can believe anything you like. You can despise anyone you like. I am happy for you that funding was secured in your head. Unfortunately, the SEC needed more.
The fact remains: In the opinion of the SEC, funding was not secured.

 

[2daMoon]

I think Musk can be a bit of a drama queen with the bankruptcy warnings. Maybe it is how he motivates his employees.
Both SpaceX and Tesla faced bankruptcy in the very early days; SpaceX after failing three times to get Falcon 1 orbit and Tesla in 2008 when the great financial crisis dried up financing.
However Musk’s more recent warnings about possible bankruptcy are not real. There was no immediate risk. Tesla could easily have raised money during model 3 production hell if it needed to. Same with SpaceX during the early days of Starship/Starlink. In fact, it’s been over two years since he said SpaceX faced a risk of bankruptcy if it didn’t get starship to orbit and start launching starlink v2 satellites with it. Neither has happened; SpaceX adapted by building the v2 mini satellites and launching them on falcon 9 while raising plenty of money along the way.

Still, it is probably a better thing that he is running Tesla rather than you.

 

[Orbit]

SEC.gov | Elon Musk Settles SEC Fraud Charges; Tesla Charged With and Resolves Securities Law Charge

www.sec.gov

And yet Musk and Tesla settled with SEC and agreed to pay a $40 million fine. He also stepped down as chairman. In the SEC’s opinion which is all that counts at the end of the day, funding was definitely NOT secured.
FACT: Musk never produced signed, documentary evidence of such funding. Not even a term sheet

SEC was apparently split on whether to pursue him on it, 3 votes to 2.

Still, I haven’t seen any convincing argument that funding was “secured”, rather than “discussed and likely available”. That wording would have prevented the damaging fall out.


That is part of the risk/reward analysis of investing with Elon.

 

[Tony73]

Still, it is probably a better thing that he is running Tesla rather than you.

Considering the fact that he is infinitely more talented: absolutely.

 

[2daMoon]

SEC was apparently split on whether to pursue him on it, 3 votes to 2.

Still, I haven’t seen any convincing argument that funding was “secured”, rather than “discussed and likely available”. That wording would have prevented the damaging fall out.


That is part of the risk/reward analysis of investing with Elon.

... and of expecting people from another culture to hold true the same concepts for defining the subtleties of ethical behavior.

 

[tmoz]

Well, I'm glad he didn't take it private and buy me out.

 

[Orbit]

I think Musk can be a bit of a drama queen with the bankruptcy warnings. Maybe it is how he motivates his employees.

Twitter was in genuine crisis.

It can be both employee motivation and existential risk to the company. Much easier to convince the employees the company might go bankrupt if it is a real possibility. If you are willing to push to the brink, there is more upside.

I think Elon loves legitimate risk.

 

[Orbit]

... and of expecting people from another culture to hold true the same concepts for defining the subtleties of ethical behavior.

I thought the same about the riskiness of suggesting that I myself would live up to this proposed ethical standard when I said this.

I make mistakes. If someone points them out I try to have the humility to acknowledge them and learn.

But truth is pretty good guidance for investment.
Still a fair amount of signal behind Elon/Tesla, despite the noise.

 

[2daMoon]

All you offer is personal attacks and conspiracy theories. No signed documentary evidence of such funding exists.
Musk is a fighter. If he settled this case, it’s because his lawyers told him he didn’t have a snowball’s chance in hell.
You can believe anything you like. You can despise anyone you like. I am happy for you that funding was secured in your head. Unfortunately, the SEC needed more.
The fact remains: In the opinion of the SEC, funding was not secured.

No, many of the facts remain absent from the story as you quote it. That is the short version the media uses, and far from the whole story.

Time was a factor that Elon's attorney's could not negotiate for with the SEC. His "cooperation" was coerced due to this. In the US, the law regarding contract is founded in common law. Any contract made under duress is null and void. Elon's legal team has worked on this angle regarding the SEC agreement since then. A tough row to hoe, but the honorable way to pursue justice.

As for the funding, under common law a contract does not have to be written. A spoken agreement can be legally contractual, and can be proven if there are witnesses willing to corroborate it.

I believe Elon had the impression an agreement existed, mostly because he is a possibility thinker and always looks for the best in any situation. If he misunderstood, it was only because he tends to see the good side of people and situations. That doesn't make him a liar or a cheat, which is what the SEC and the media have implied.

 

[dhanson865]

AMD releasing the next car rated chip generation, Tesla obviously will be using them in products to come

AMD Announces Automotive-Grade Ryzen Embedded V2000A Series - Phoronix

www.phoronix.com

 

[mickle]

BYD first to install SpaceX package:

OK, but seriously, what is going on here? I thought LFP batteries were supposed to be safe, but in the video you see them exploding like M80s.

 

[Orbit]

It was secured

Elon’s own lawyer conceded it was “technically inaccurate” to say it was secured.
Yet you know better?

How about clearing up all this misinformation and explaining how Elon’s lawyer, and us forum members who agree with him, are all wrong?

If Elon’s lawyer is so bad as to spread misinformation that is damaging to Elon, it’s important investment information.

 

[Krugerrand]

All you offer is personal attacks and conspiracy theories. No signed documentary evidence of such funding exists.
Musk is a fighter. If he settled this case, it’s because his lawyers told him he didn’t have a snowball’s chance in hell.
You can believe anything you like. You can despise anyone you like. I am happy for you that funding was secured in your head. Unfortunately, the SEC needed more.
The fact remains: In the opinion of the SEC, funding was not secured.

Elon literally was asked the question in an interview and explained that funding was secured.

The SEC is a corrupt organization and if you don’t know that, nobody can help you know the truth.

 

[Krugerrand]

Elon’s own lawyer conceded it was “technically inaccurate” to say it was secured.
Yet you know better?

How about clearing up all this misinformation and explaining how Elon’s lawyer, and us forum members who agree with him, are all wrong?

If Elon’s lawyer is so bad as to spread misinformation that is damaging to Elon, it’s important investment information.

The information is available, you just have to look for it. Start with the interview where Elon was asked the question point blank and he answered it. He had the funding.

 

[Orbit]

Elon literally was asked the question in an interview and explained that funding was secured.

The SEC is a corrupt organization and if you don’t know that, nobody can help you know the truth.

So why did Elon’s own lawyer not make the same argument as Elon, instead of conceding it was technically inaccurate?

Or can you at least repeat the argument that Elon used to explain it?

You can’t can you? Yet you jumped on me for “spreading misinformation”.

 

[2daMoon]

So why did Elon’s own lawyer not make the same argument as Elon, instead of conceding it was technically inaccurate?

Or can you at least repeat the argument that Elon used to explain it?

You can’t can you? Yet you jumped on me for “spreading misinformation”.

When the SEC asked Elon, he answered with what he believed to be the truth. Funding was secured.

When the SEC asked the attorney if this could be proven, the attorney conceded it could not be proven.

These are not mutually exclusive responses. Both can be factual.

 

[Bet TSLA]

So why did Elon’s own lawyer not make the same argument as Elon, instead of conceding it was technically inaccurate?

Or can you at least repeat the argument that Elon used to explain it?

You can’t can you? Yet you jumped on me for “spreading misinformation”.

Because "secured" is a term of art in SEC land, implying various conditions have been met (like a signed contract). Elon was likely unaware of those technicalities when he posted, using "secured" as an ordinary English word.

In any case, he could have easily gotten the money from several different sources, so there wasn't any intent to deceive anybody.

 

[Orbit]

When the SEC asked Elon, he answered with what he believed to be the truth. Funding was secured.

When the SEC asked the attorney if this could be proven, the attorney conceded it could not be proven.

These are not mutually exclusive responses. Both can be factual.

I agree that Elon believed funding was not a problem.
My assertion isn’t that “Elon lied”, or that “Elon committed fraud”.
My assertion is that he said something which was technically false, and that ended up objectively having a negative impact on Tesla’s long term reputation and health.


Musk's lawyer Alex Spiro countered that Musk's "funding secured" tweet was "technically inaccurate" but that investors only cared that Musk was considering a buyout.

"The whole case is built on bad word choice," he said. "Who cares about bad word choice?"

"Just because it's a bad tweet doesn't make it fraud," Spiro said during closing arguments.

An economist hired by the shareholders had calculated investor losses as high as $12 billion.

During the three-week trial, Musk spent nearly nine hours on the witness stand, telling jurors he believed the tweets were truthful. He said he had lined up the necessary financing, including a verbal commitment from Saudi Arabia's sovereign wealth fund, the Public Investment Fund. The fund later backpedaled on its commitment, Musk said.



In other words, the fund back peddled, so financing from them wasn’t “secured”, otherwise they couldn’t back peddle.
He probably could have sold SpaceX stock. But that is also not “secured”.

That isn’t what secured means.
Secured means locked in, unconditional.