TSLA Market Action: 2018 Investor Roundtable

[BenPrice]

Wouldn’t this be the best opportunity for another cash heavy tech company or cash heavy/govt backed automobile company to buy Tesla?

Tesla is going to be substantially devalued and leaderless.

 

[Dwdnjck]

Could the board appoint Kimbal CEO and have Elon work for him?

 

[Big Earl]

I don't know how the short selling circuit breaker works during after-hours trading, but it's interesting to me that we're hovering right at a 10% drop.

 

[Unknown_Wizard]

Not good, but does this really matter in the long run...?
Not at all!

A very nice opportunity. For you and I, but eventually for Apple, Alphabet and other as well.

 

[Fact Checking]

So, what happens next and over what kind of timeframe might this play out?

Depends on the legal strategy:

• Aggressive: Elon told the truth that 'funding is secured', because two weeks later he had funding of 30 billion dollars not just secured, but committed as well - independently of the Saudi offer to take Tesla private. So there were two credible sources of funding. Truthfulness is an absolute defense against allegations of fraud. So if they decide that they want to win against the SEC and set an example, they'd have to go through discovery and a trial.
  
• Cooperative: This depends on whether the SEC wants to settle on reasonable terms. This could be fast - but only if the SEC wants it to.
  
• Passive: If they wanted to, they could probably delay this until the next Democratic president is sworn in on January 2021: the average civil trial takes 2.5 years, but more complex trials take longer.

 

[heltok]

I propose this guy for new CEO:

 

[Ludalicious]

I'm in long anyways..... F this news. Just look at Zip2 Elon started.

When he sold it and was under new management the company flourished.

 

[dondy]

To remove Musk from CEO SEC has to prove fraud, in this case they would have to prove his intent or even better movements to use somehow his "false" statements. "To hurt shorts" is obviously not an argument, as the real actions showed the market didn't really believe him and it's not difficult to find objective reasons why.
for starters such buyout couldn't happen without consultations with all major investors and that takes time sufficient for shorts to bail gracefully...

SEC obviously will fail with finding fraud, but if the chain of the events was as it is presented in the litigation complain Musk will end with a hefty fine for incorrect representation of his actions and false statements.
Musk group has to collect in volume untrue and not precise MM statements to build a decent basis for background story. He actually can get even without big fine if his group will do smart.

As expected Tesla is not involved, as expected it is a civil case.
Now let wait for the last part of this circus and find what is the price of the settlement.

 

[phil0909]

So, what happens next and over what kind of timeframe might this play out?

My guess:

Elon decides to remain in place. The Board issues another statement of support tonight. The stock price takes a hit short term. SEC suit goes to trial. If financial results are good, it all blows over eventually. If results are poor... the SEC suit won't matter anyway.

 

[Fact Checking]

I don't know -- I feel like the SEC's point is that at the time of the tweet, nothing had in fact been secured

That's not the legal standard though: he only had to be very certain that funding is secured and tweet truthfully, without an intent to deceive - and apparently he was truthful, because the Saudis told him that they wanted to take Tesla private and already invested 5% into Tesla.

But there's more: according to news reports there was a second source of funding as well: by August 22 Elon, Silver Lake and Goldman Sachs gave the board a formal proposal with 30 billion dollars of funding, according to the WSJ:

Public Bravado, Private Doubts: Inside the Unraveling of Elon Musk’s Tesla Buyout

"By Wednesday evening, they had a presentation for Mr. Musk, proposing a roster of deep-pocketed investors, including Volkswagen and Silver Lake itself, that had agreed to contribute as much as $30 billion, people familiar with the matter said."​

(Note that another newspaper only reported "German carmaker", so it's not certain whether it's Volkswagen or one of the others.)

So Elon had two independent sources of funding to take Tesla private: the Saudis, who made an offer on July 31th, and the consortium Silver Lake and Goldman Sachs organized by August 22.

So Elon was fully right if he thought that funding was secured. The big deal was shareholder approval: which indeed caused the going-private transaction to be dropped.

The SEC's legal burden is steep: they'd have to prove intent to deceive. Which would be doubly difficult because what Elon tweeted was true: by August 22 he had two, independent sources of funding.

So I don't see how the SEC has a case here.

 

[Tslynk67]

Short sellers and option holders have no legal protection, right? So it’s only common stock holders who are the ones that could Be the injured parties in all if this. Am I correct?

And jets say there’s a fine, or settlement - who gets that money? What purpose does it seve really?

 

[aubreymcfato]

I hate this.
Even Tom Randall, who usually is mild in his words, his writing tweets like this one:
Tom Randall on Twitter
"If found guilty, Musk could face hundreds of millions in fines, be barred from running a public company, even conceivably face prison time, former SEC chairman told Business Insider in August"

Is this accurate?

 

[Boomer19]

No, just that you're focusing on minutiae, relative to the big story here.

In fact, I am a fan of the product.

in that case i apologize. my troll radar is exhausted

 

[HopJokey]

SEC holding a press conference on the matter:

Watch: SEC holds press conference after suing Tesla CEO Elon Musk

 

[abasile]

I'm in long anyways..... F this news. Just look at Zip2 Elon started.

When he sold it and was under new management the company flourished.

PayPal is another great example...

I believe Elon has brought Tesla to the point where it will succeed with or without him.

 

[JRP3]

This whole BS is 100% on Elon and Elon alone – so please, can we stop spinning this case into some sort of tinfoil hat conspiracy?

Wow the conspiracy theorists here are at an all time high. SEC's just doing their job.

Nonsense. SEC is alleging fraud where none occurred. There is no valid case to be brought.

 

[oneday]

Heres another link

SEC Press Conference

 

[Ludalicious]

PayPal is another great example...

I believe Elon has brought Tesla to the point where it will succeed with or without him.

Exactly

My friend Ed is the same way. He's great at finding girls but can never ever seal the deal

 

[ggies07]

I feel like I'm back in this book:

 

[Unknown_Wizard]

Pace of innovation is all that matters in the long run...

Elon Musk, 9-26-18

I have nothing to add.