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ZachF
Active Member
Kimball is a shoe in for Chairman. Make NO mistake .... it's still Elon's board. Period.
Thank goodness he agreed to this ... we don't need this distraction ..... lesson learned ... slap on the wrist ... in a few months no one will even remember it happened.
Cheers to the longs.
Edit: I wish the settlement had something in it barring Kimball from wearing that hat.
I like the hat...
And we still have the uptick rule in force all day Monday!
Well, if you trust Fred's source, the tracker is way off. It would appear that they'd been previously overestimating production due to high VIN registration numbers, and is now underestimating them due to the reduced number of new VINs registered.
sweter
Member
Or was it ultimate bear trap by Musk and he indeed manipulated the SP this way on Friday? How many new shorts on Friday?
How many new shorts on Friday?Wouldn't it be fun if they also reported the Q3 production and deliveries number on Monday too.
Would someone please explain what paragraph 13 means and what would be the consequences w.r.t. the lawsuits those shorts filed against him?
The Blue Owl
Endangerous Herbivore
That's where he keeps Musk's doll for voodoo.
Or was it ultimate bear trap by Musk and he indeed manipulated the SP this way on Friday?
I’d much rather we were well over $349 than this current situation.
Only bear trap is to keep executing.
NikeWings
Active Member
Adding clarity.......
Debt is a form of capital, and EM did not say 'no capital', he said 'no equity'. (See transcript below). Like most multi billion dollar companies, TSLA has several working capital debt facilities to support its opex, trade, equip purchases etc. Most companies renew or amend/extend these facilities perpetually, as has TSLA. In fact, a public ratings agency would likely haircut a rating if a company did not demaonstrate multiple sources and adequate depth of liquidity.......so one should expect TSLA will always carry forms of debt, and they will mature, and will need to be replaced or potentially even increased along the way. This is not a bad thing. Leverage is good. (Apple is ~1.5x)
So @dqd88 has a legitimate point and here is why. TSLA is currently B3/B- both with negative outlooks. These ratings directly impact the cost of all capital. In their most recent updates, both agencies provided very specific pathways to upgrade and downgrade triggers....and no surprise M3 production and adequate liquidity top the lists. With M3 production out of the way, the focus becomes liquidity which until Q3 reports is TBD. However, keep in mind that the thought of an SEC lawsuit against the CEO was far from the minds of Moody's during the 2018 refresh. For those unfamiliar, in a ratings assessment, 'corporate governance' and 'management strength' contributes to the ratings scoring models in a meaningful way - they are considered 'modifiers' meaning they trump the core ratings model favorably or unfavorably, to determine a final ratings profile which maps directly to a ratings grade. Also note that Moody's and S&P have both recently settled with the SEC themselves for poor controls/unclear ratings methodologies and ratings fraud respectively. (OK conspiracists, I just lobbed another SEC tactic right at you.
). So, we should expect both Agencies to be in a state of reevaluation and in deep management discussions or preparing for them immediately. A downgrade from either by even a single notch would be problematic - not only to debt costs but to institutional fund investment policies which often prohibit C rated investments. (Investors generally take the lower of a split) And a downgrade at all, especially since TSLA is so damn close to the upgrade they operationally deserve is unfathomable actually. As much as we love this company and believe in this amazing mission, there is potential for collateral pain. I have no doubt it will eventually be navigated, but the ratings agencies are no happier with the SEC than the rest of us right now. They are in a horrible predicament and hopefully this latest turn of events is strong enough to counter the enevitable pain. We'll see.
Think positive,Excerpt Q2 transcript:
James Joseph Albertine
Consumer Edge Research, LLC
Appreciate all the color you've been providing. Wanted to dig a little bit deeper though in terms of capital spending plans. Considering your growth you've identified in China with the Model Y, we believe also in the EU, it's been discussed about a factory there. How do you plan to fund all of this growth without going back to the capital markets to raise funds? And can you verify for us whether or not there is a notice from a regulator that would prevent you from raising outside capital?
Elon R. Musk
Co-Founder, Chairman, CEO & Product Architect
We do not -- we'll not be raising any equity at any point, at least that's -- I have no expectation of doing so, do not plan to do so. For China, I think, we -- our default plan would be to use essentially a loan from local banks in China and fund the Gigafactory in Shanghai with local debt essentially. And there are so many -- we could raise money, but I think we don't need to, and we -- yes, I think it's better to just not to.
I would take JB as well, if not Kimball.
Also it says no criminal immunity which makes sense but I wonder what risk remains there. Based on what I heard about the civil case being 'thin' I would think there isn't much to go on for a criminal case but I'd like to know if there are any other possible surprises.
I'm seriously confused? Musk rejected a deal that seems to be less bad 1 day ago, and now he suddenly accepted this deal. What has changed to change his mind or am I just bad at seeing the differences?
Additional details from the SEC: SEC.gov | Elon Musk Settles SEC Fraud Charges; Tesla Charged With and Resolves Securities Law Charge
- Musk will step down as Tesla’s Chairman and be replaced by an independent Chairman. Musk will be ineligible to be re-elected Chairman for three years;
- Tesla will appoint a total of two new independent directors to its board;
- Tesla will establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications;
- Musk and Tesla will each pay a separate $20 million penalty. The $40 million in penalties will be distributed to harmed investors under a court-approved process.
I don't think the SEC can prevent actual criminal justice agencies like DOJ from pursuing criminal charges anyways. The SEC is not a criminal justice agency to begin with.
Everyone will interpret this through their own lens, because we don't know the wording of the original deal, so we don't actually know if this is any better or worse in what regards.
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