> but it seems basically obvious to all observers.
It doesn't seem obvious to me. It seems like one of a few interpretations, not limited to:
- Elon was overly stressed (as has been documented recently) and didn't think before posting such an impactful statement
- He considers twitter to be an official outlet for Tesla and just continued with his tendency to publicise his decisions and thought process constantly.
- His idea of "secured" is simply different from the SEC definition and if the funding had been SEC-secured, the tweet would be a compliant form of public disclosure.
[edit]
To be clear, I'm not arguing that the tweet shouldn't be investigated. I'm saying that "he intentionally lied to screw over short sellers" is presumptive and that may not have been his intent.
> So, anyone can get away with a crime if they're overstressed?
Are you putting words in my mouth on purpose? I'm not arguing that he shouldn't be investigated. I'm arguing that "trying to screw over short sellers" is not the only and "obvious" reason why he could have made the tweet.
I've read every tweet he posted in the last year or so. He hates the short sellers passionately. He tried to cause a short squeeze two times before the funding secured tweet. The likelihood that causing harm to short sellers was not part of his motivation is approximately zero.
It's not a fact that he lied. He believed he had funding and explained the rational behind that. He wasn't making it up. Intent matters.
Certainly, it was a reckless thing to say and a bad idea given that it wasn't 100% closed. "Secured" was the wrong word to use, no doubt.
Elon: "I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to “funding secured” in the August 7th announcement."
Intent does not matter. If Musk got up on Twitter and announced "I have secured orders for fifty million cars at $50000 each" because he was drunk at 8am, that would not be excusable either.
Intent matters when determining if someone is lying or not. It doesn't matter when determining if someone committed an act. So in this case he seemingly committed the act of making an untrue statement. But whether he was lying while doing so is not so clear because we don't know if he was being intentionally misleading.
Intent matters enormously but I think this is a different situation than some layman commenting on financial matters. Musk is the CEO of a ~50B public company with deep experience in fundraising and other matters of finance.
Even if we can't say definitively what was going on inside his head when he posted that tweet we can say that any reasonable person in that role with that level of experience can be expected to understand what "funding secured" means.
It's kind of like if I walk into a store and take something off a shelf without paying for it. I can't claim "it's not stealing because I didn't know this stuff wasn't just free for the taking" because any reasonable person in my situation should understand what a store is and how it works.
> I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to “funding secured” in the August 7th announcement.
Elon is a smart man. He knows this does not mean that funding has been secured. "Could be" is not a "secure" state.
I don't mind the investigation but this whole thing, especially all the hate, like he ruined short sellers lives ( the stock is way down since the tweet ), is insane to me.
I actually do think your linked tweet is problematic (though on a much smaller scale than the "secured funding" one). While obviously a joke, it was at the very least an irresponsible one from a public company CEO and definitely could be viewed as an attempt to manipulate algorithmic traders via the dissemination of misinformation.
CEOs have a legal duty to their shareholders and the public to communicate about their companies in a clear an honest manner.
Are you saying he bought Twitter at $420 and the funding was secured for it? Because that sounded like an outright lie. He also doubled down by making that blog post thereby voicing this in his capacity as Tesla CEO.
It wouldn't be illegal if there was a tender offer for the shares at $420.
As sad as this makes me (because I want Tesla to be wildly successful), I have to agree. This is textbook and brazen stock manipulation, a flat out crime.
Isn't "Opening a civil and criminal investigation" without due process, also direct manipulation as well? Surely, prior to a fault/guilty verdict, running someone through the mud is furtherance of that, no?
This reminds me of "perp watches" posed by police departments on Facebook and twitter. No charges, but arrested - and you get to live in the newspaper and social media regardless if you are exonerated. Cause, public shaming?
I must've missed something, what I understood from reading the article was simply that there are insider reports of a criminal probe, not that the U.S. government made an announcement of such.
Sure, publicity around early investigations in general has inevitable externalities on people who might still be innocent, but how do you think you reach a verdict without going through an investigation?
"We conduct investigations on a regular basis on a multitude of people over possible perceived wrongdoings."
-vs-
"We are conducting a thorough investigation on Musk, Tesla, SpaceX because we believe he did something wrong."
The first is a non-answer, and puts no blame anywhere. Its their reason to be, so its unsurprising. The second statement itself changes the market the very same way he was claimed to do, and paints him and the companies in a bad light, prior to any finding of fact.
I'm arguing for the defense and protection of the accused. By the very definition, they are not guilty/liable UNTIL the court says they are. But this style of bandying around "We're INVESTIGATING ____" Only puts strong implicit blame and guilt on the accused.
I guess I'm a bit off-topic but sometimes I really fail to understand the USA culture. You can make the most outrageous and racist comments because of "freedom of expression" but making speculators lose their shit with a couple of tweets is a "textbook crime" for which you should "go to jail".
In this case it’s highly specific to the person doing the statement & the subject of the statement. And it’s not nearly as textbook as the comment implies. But the US has fairly consistent and specific case law on when speech is a crime precisely because freedom of expression was so central to the founding of the country.
It's because of the belief that specific acts shouldn't be illegal, just the negative effects caused by those acts. People can say racist things all they want, but if there isn't anyone actually being harmed by it, should they be punished by the government? It's like with Musk, he's not being investigated for a stupid tweet, he's being investigated for a stupid tweet that appears to have been made with the purpose of directly influencing the stock market. Specific acts should only be made illegal if it can be proven that the specific act essentially guarantees that someone will be harmed as a result.
To add to this good explanation, that's also why slander and libel are not protected forms of speech (but they do have high standards of evidence).
You can call a person a million names to their face, but if you publish an article or book saying you think that person's a thief, and that person's life was ruined because nobody would hire them anymore, then yes you're potentially opening yourself up to legal action.
Although that is definitely an oversimplification (there are plenty of limitations to freedom of expression), why is your description particularly odd or difficult to understand? If an executive at a public company makes misleading public statements with the intention to cause certain transactions (which may or may not be the case here), that's a pretty clear financial crime with clear victims. I don't see why jail time would be out of the question.
If you just make "outrageous" comments on twitter, why is it weird that "USA culture" wouldn't generally prescribe jail time? I'm from the USA, granted, but that sure seems like a reasonable protection of freedom of expression.
Racist comments are of course a trickier example, but I think it's perfectly reasonable for there to be a legal distinction between (protected) tasteless/offensive/insensitive statements about race/ethnicity and (not protected) statements that defame or incite violence.
Well, of course I realize that I'm oversimplifying and exaggerating but my point was that I have the impression that messing with money is a much more serious problem than messing with people in the USA.
Insulting people is a very different thing from defrauding them.
Hate crimes are treated far more seriously than monetary crimes, if that's what you're trying to get out. It's simply that merely making racist statements is not a crime in the US.
saying mean things doesn't hurt people - even if they're really horrible, they're just words. Providing guidance that is false or intended to hurt people, like Elon's tweet, is fundamentally different.
Why is it a lie? Saudi did not invest Lucid when he posted the twit. You don't know that funding was not secured. As a matter of fact, if the board supported the decision, it would have been Tesla being invested. The statement itself is not necessarily a lie (could be) but it seems to me likely not.
He you mean Elon Musk? He admitted the funding was not secured at the time and was never intended to buy back stock at $420? Why not post a link and let us see.
Follow the original twitter feed yourself. Its not like its been deleted. Musk is very clear that "funding is secured", and in follow up tweets.
> Am considering taking Tesla private at $420. Funding secured.
> Shareholders could either to sell at 420 or hold shares & go private
> My hope is all current investors remain with Tesla even if we’re private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment.
----------
Days later, Musk posts a blogpost that directly contradicts his original tweets. IE: He was lying originally. We now know that there's no buyer who was willing to spend $70 Billion to buyout Tesla and take it private.
The question then, is was this lie "negligence" (SEC fine), or was it intended to manipulate the price? (FBI jailtime).
The DoJ case implies the FBI is looking into the jailtime question. While the SEC is looking into the negligence question. Both cases will move forward as appropriate.
My bet is that SEC gets him on negligence, but I don't really know enough about history / other cases to know what kind of punishment Musk will get. I'm guessing a fine of some kind, but the SEC does have the power to remove Musk from his CEO position entirely.
Except he didn't lie. Funding was secured. So much so that when shareholders objected and Musk retracted, the Saudi wealth fund went out and invested substantially in a Telsa competitor.
This is a massive oversimplification. Musk may be in peril but this is not as cut-and-dried a case of fraud like you make it seem. Consider this recent comment from the SEC:
“When you talk about fraud,” [Jina Choi of the SEC] answered, “you’re talking about a state of mind, you’re talking about mens rea. We call it scienter. You have to do something with intentionality. The idea of just making a misstatement doesn’t necessarily rise to the level of fraud."
Misstatements can “be the first step to fraud,” Choi had added. “But generally, when we talk about fraud the F word, I think we are talking about a state of mind that’s a little bit higher than that.”[1]
That telegraphs a pretty lenient stance on misstatements that aren't completely fabricated. And there were actual serious negotiations happening here. That's not in dispute.
Without question, Musk made a misstatement. But what was his state of mind? Was there intent to deceive, or was he merely overzealous in his interpretation of the negotiations? If he can argue the latter then it may not rise to the level of criminal fraud.
> That telegraphs a pretty lenient stance on misstatements that aren't completely fabricated
American commercial law goes out of its way to avoid criminalizing stupidity. At a certain level, the difference between a genius and a madman is the genius was correct. They are indifferentiable without the benefit of hindsight.
The nail in Elon's coffin (or lack thereof) will probably revolve around the degree to which he documented his animus towards short sellers in the days leading up to the misstatement.
Nah, it's clear Musk hates short sellers. That's not the issue. Nor is his desire to hurt them. The question is whether he had scienter when misstating the finality of the deal he was negotiating.
> That's not the issue. Nor is his desire to hurt them.
That's a huge issue. If he made his misstatements with the intent of hurting short sellers, that's criminal fraud. If he just made a material misstatement, with no intent to harm anyone, it's a civil case.
You inserted "intent". That is the key question, not whether he dislikes short sellers.
Every CEO dislikes short sellers, and nearly every CEO makes "material misstatements" now and then. What separates that from fraud is what the SEC focused on in their comment: scienter.
You keep throwing around the word "scienter" without understanding what it is.
Scienter just means intent. It's literally just the fancy legal term for intent.
Thus, it matters very much that Musk has a history of trashing short sellers and wishing harm to them, because they can use that history to establish that his tweet was made with the intent to defraud market participants and materially affect the price of Tesla's stock.
Especially the "funding secured" bit. You don't say "secured" if it's not really secured. There is no legal interpretation where "secured" is a harmless mistake.
I have been using scienter and intentionality interchangeably. I think it is you who is throwing around fancy-sounding terms like "legal interpretation" without really knowing what they mean.
Again, every CEO dislikes short sellers and literally everything they do to talk up the company hurts shorts, by definition. You don't need any tweets to establish that. It's a given. And every CEO misstates things and makes errors and in big companies every statement moves the stock price. The issue is intent.
What you are doing is focusing on the misstatement, adding in fancy sounding terms like "legal interpretation", and whipping that up into intent to defraud. But as the SEC explicitly addressed in the cited comment, they set the "state of mind" bar higher than mere misstatements. You are going to need more than that to establish scienter.
Your fancy term aside, there actually are other interpretations of his comment. He may have been overzealous. He may have overestimated his investors intent.
Let's look at it another way. Musk is a reasonably smart guy. How far was he going to get with this alleged scheme to intentionally defraud the market? How long until everyone realized the funds were not actually secured and the fraud was revealed? Like, 2 hours? That would be the stupidest fraud in the history of frauds. The conclusion is that, perhaps he actually believed the deal would come together. Erroneously, but erroneous statements are not enough for fraud; the key factor is state of mind.
> The nail in Elon's coffin (or lack thereof) will probably revolve around the degree to which he documented his animus towards short sellers in the days leading up to the misstatement.
That and if he's able to show he really thought funding could have been secured but fell through. IIRC we still don't know the full story on that.
> if he's able to show he really thought funding could have been secured but fell through
"Funding secured" and "funding to be secured" are materially different terms. The point of "secured" is it's been bindingly, definitively agreed upon in a way that makes falling through very, very difficult.
His best defense is, absurdly, arguing a seasoned CEO doesn't understand what "funding secured" means. He might be about to inject enough doubt into a jury to avoid criminal charges, but I don't think that will outweigh the preponderance of evidence which is required for a civil judgement.
Fortunately for him, he's an engineer with thumbs and a screen, not a lawyer. I don't think it's particularly likely that this goes nuclear on Musk or Tesla but it's definitely absurd, as you said.
He's a CEO and is fully responsible for all matters of Tesla finances. If Mr. Musk is too ignorant of the law to properly run a company, then he will be removed.
But that's the SEC's investigation. The deal with the article today, is that the DoJ... aka the FBI is beginning to get involved. This suggests that the FBI is concerned with CRIMINAL issues with regards to that tweet. Criminal penalties looks unlikely IMO, but who knows what the FBI manages to dig up?
In either case, the FBI looking into it doesn't look good at all. If anything, it helps solidifies the SEC (non-criminal) case of negligence.
Yes, it can be an oversimplification, but in this case it isn't. He clearly wanted to pump up the stock price and screw short sellers (he threw lots of indicators in the public space), and his statement was clearly and knowingly false. There was no secured funding.
Optimism might justify a statement like "final stages of signing funding" or "almost closed the deal" or even "funding as good as secured" -- there might be ambiguity there. Not for "funding secured".
> He clearly wanted to pump up the stock price and screw short sellers (he threw lots of indicators in the public space), and his statement was clearly and knowingly false. There was no secured funding.
No this is not textbook at all. See previous citation from the SEC re: intentionality as a key element in criminal fraud.
"Clearly and knowingly false" is just a serious-sounding way to say a misstatement. Did Musk not actually believe in his heart that the deal was basically done? It wasn't, of course, but it takes more than being incorrect to constitute fraud. It takes intent to do something you know is wrong. Wishful thinking may be fraud but it is not necessarily textbook fraud.
not to mention that what his tweet said was "Secured funding." (many news organizations misquote it as "Funding secured.")
In English, the sentence "Secured funding" is ambiguous in meaning: as a shorthand sentence, it could mean "we would only use secured funding for a transaction like this".
"Secured debt" is a thing, and therefore secured funding is a thing. Unless he clarified it someplace else in a way that was not in his favor, there is plenty of wiggle room in that sentence.
So you're saying that, the way securities law works, personal optimism is all it takes to justify any representation of any upcoming financing terms? There's no requirement beyond what's in his heart?
Disliking short sellers is not the same as intent to defraud the public. Every CEO dislikes short sellers. Intent to commit fraud is absolutely the hardest part of this to prove.
Cool, now we can retread the part where I expressed skepticism that personal optimism is carte blanche to represent any "secured" investment terms to the public.
He doesn't even need to do that! The feds need to prove he never intended to take Tesla private, or that "funding secured" was somehow isolated from those intentions and tweeted disingenuously to move the stock price. Good luck with that -- all evidence is to the contrary (talks had taken place and the Saudis have entered the market in earnest, and relevant emails had been sent out across the entire company). It was a dumb tweet for a lot of reasons, and it's reasonable to subpoena emails and investigate (and obviously civil claims and losses are another story), but dwelling on "fraud" of all wrongs here is downright silly.
I'm sick of people giving high-profile people in the tech sector a pass on their shitty behaviour because of the pervasive hero-worship culture. Jobs, Zuck, Torvalds, etc.
Irrespective of Musk "caring too much" or whatever other justification his fans have concocted, this is exactly the sort of behaviour (lying to manipulate the market) we have laws to prohibit.
We see articles every so often about how Tech as an industry needs to play catch up on the Ethics side of things. Now's the chance.
The sad piece of karma in all of this is that Musk tweeted in an effort to destroy the shorts.
His tweet turned out to:
- give the shorts a big dip in his stock,
- an investigation by the SEC
- an investigation by the DOJ
- the backing off of a deep pocketed investor in the Saudis
- Him potentially being personally liable, which would mean having to step away from SpaceX and Tesla if he was found guilty of fraud.
This could be the biggest thing to come out of all of this. Imagine Elon getting a 2 year ban on begin an executive in a company. Or SpaceX not being able to bid on government contracts because their CEO is a felon.
There is going to be a lot of backroom dealing to do everything they can to prevent Elon from being charged.
- A lawsuit that is seeking class action status for anyone who was short at the time of his tweet.
- this is speculation, but it must have really strained his relationship with the board. I mean you can only fight so many battles at once, you'd think you'd want to have the board on your side
All to screw with the shorts, who really have no power what-so ever to hinder Telsa. If he had just not used twitter he and Tesla would be better off and the shorts would be worse off.
> All to screw with the shorts, who really have no power whatso ever to hinder Telsa.
If Tesla wasn't burning through cash and didn't need an ever-inflating stock price in order to keep the house in order, the shorts would be powerless and in all honestly would back off. The only reason the shorts have power is that Tesla's future is currently heavily dependent on its stock price.
Can you explain how that works? I thought that once a company's stock was listed, third parties just trade it amongst themselves. How does that activity affect Tesla in terms of how they're able to execute?
Tesla has various options for raising cash including selling stock or bonds. In the case of stock, a secondary offering would come at a price relative to the current stock price. In the case of bonds, bonds are in almost all cases higher in the capital structure than equity. Having a large "equity cushion" makes bonds more attractive because there is someone else that will take losses before the bondholders.
There's a clause in Tesla's debt that if the share price is >$360, they can pay their bond notes with stock shares. If it is <$360, they have to pay their debt payments in cash. This obviously has a massive impact on Tesla's already precarious cash position.
Stocks prices are based off of two things really - current earning and perception of potential earnings in the future.
Tech stocks are infamously based largely on the second more than the first. Many do go reinvestment heavy like Amazon did for years before they started to post more profits.
Given the feedback loop impact things get weirdly circular in potential for success based upon others. Not in a something from nothing sense but in a giving what it takes to succeed sense.
I'm not super knowledgeable in the stock market, what would he have gained from destroying the shorts? I understand that shorts are effectively a bet that the stock will go down but do they actually damage the company in any way? At a glance it sounds like trying to break the thermometer because you think it's too cold out there, the stock wasn't at risk because of the shorts, instead there were shorts because some investors though that the stock was at risk. What am I missing?
Also even if destroying the shorts was a positive outcome for Must and Tesla how does that excuse his behaviour? Isn't that textbook market manipulation?
Shorts drive the price down, making it more expensive for the company to borrow from the market by selling stock. They have to sell more shares to receive a similar amount.
I obviously lack a piece of the puzzle here, let me see if I get this right: a short means borrowing stock, selling it then rebuying it later (betting that the price would have fallen in order to turn a profit) before giving it back to its original owner.
I suppose if everybody shorts at the same time the huge amount of stock being sold could drive the price momentarily down, but then again the opposite happens when the stock is re-bought. So in the end it should be effectively zero-sum? Or is it just that a huge amount of people started shorting the stock at the same time which made it a sort of self-fulfilling prophecy?
Hopefully, the sale to start the position and the purchase to close it do not move the market themselves. People do long positions without moving the market (affecting the price). Sorry if I explained anything to anyone who already knew it.
They wouldn't have to buy it back immediately. Short sellers would borrow the stock from a long and pay a predetermined interest rate for however long they're borrowing it. They technically don't have to rebuy the stock unless they get margin called (if the collateral posted is no longer deemed sufficient for the counterparty to allow the borrowing position) or need to close out positions because of some risk tolerance threshold being met. Usually when this happens to a bunch of shorts at the same time they must all rebuy, driving prices higher, which is called a short squeeze, but it is usually determined by someone cutting losses on a short position or positive news coming out driving prices up.
That's equivalent to saying that buying a stock doesn't move the price up because you'll have to sell it eventually. A lot of people in long positions means a lot of buys that haven't been re-sold. A lot of people in short positions means a lot of sells that haven't been re-bought.
Actually, short selling has another nasty sting in the tail.
If there are few willing sellers out there when everybody goes to cover their short, you get a short squeeze - a feedback loop where the price increases, so people need to buy to cover shorts to avoid losses, which pushes the price up, which means more people need to buy to avoid further losses as the price rises and so on.
The original owner who lent the stock can also ask for it back on relatively short notice (say, because they are long and want to sell). Usually this isn't a problem because the short finds someone else to borrow from and uses that to cover - but if enough people do that then it can trigger a short squeeze even without significant price movement at the beginning, as happened rather dramatically in Porsche shares in 2008.
Shorting a stock is like renting a car for a year, and selling it - because you think you can buy another car in a year, and still make money after paying the rental company. This is possible in this example because all cars are identical.
Also the shorts try to push the stock down via endless false rumors (there are real challenges to tesla of course) about bad cars, crashes, fires, etc, and those false rumors must prevent some people who just don't have time for so much drama from looking into them.
They aren't all trying to do that of course, a lot of people are just trying to make money and look at a stock and think it will go one way or another. But I don't like the people that push false narratives and convince people of things that aren't related to reality.
Nah, what really happens is that there are so many short positions that the stock is notable for just how many people are shorting it, and that itself becomes the negative news. You don't have to write a single 'fake news' story to get that effect.
Haters gonna hate. A lot of that news is just to sell clicks and has nothing to do with short selling. Other people hate Musk for reasons not having anything to do with self-interest in the stock price and want to bad mouth him. And the only way to do with those rumors is to be successful. Going to war with people bad mouthing you never works.
Not individually, but if enough people short it, then that becomes a signal to other investors that maybe there's something they don't know about, which will push the price down.
And other investors see that short interest piling into an otherwise healthy (hypothetical) stock and they buy in anticipation of a short squeeze. And when the stock pops due to good news, those shorts become rocket fuel for the stock going up.
No single action in the stock market happens in a vacuum, and longs will absolutely react to what the shorts are doing. And a high short interest is often viewed as a contrarian indicator that dumb short money has piled into the stock and that its actually due for a pop. You often see that at bottoms in the stock.
I'm not so sure. What direction will it "sure move" if you short 20% of FB float? You have to borrow a stock to short it from someone, so the stock that you short is not actually sold just lent.
The price would definitely move down if you sold 20% of facebook's float. The market doesn't care that you borrowed and are the one selling (as opposed to the party you borrowed it from selling them), all that matters is that 20% of the shares are being sold.
Hedge funds, which can turn huge sums into market swings often use this technique to drop the price, creating additional drops from panic sell offs, allowing them to make a margin on it from the bottom.
It doesn't make it "more expensive" for the Company (as opposed to its existing shareholders) raising equity capital unless the stock pays a dividend and the only way they can sell more stock is to promise buyers they won't reduce the dividend per share to compensate for the increased number of shares in issue. Tesla doesn't pay a dividend, so that isn't the case here.
In extremis, a falling/low price could limit the size of a potential new equity fundraising because the resulting dilution is too much for existing shareholders to take, but Tesla's price/valuation would appear to put it quite far from this being an issue.
Key point: I was trying to explain this to someone who had no idea of what a short is. I didn't want to muddy the issue with complex descriptions of equity, dividends etc.
But if you think of equity as having a value other than derived from the market, then 'expensive' might still have applicability here.
It's been a long time since I've used this though.
In addition to what other replies have said, Elon also has pledged some of his stock in order to secure personal loans. He will have to fund margin calls or sell his stock if the stock falls below a certain price.
THIS. Elon is the largest Tesla stockholder, but he has taken out huge loans against that stock. If the stock price of TSLA falls below about $230/share (there is some confusion about the exact price, but it's widely believed to be somewhere around there) his stock could all be sold to cover the loan, which would suddenly dump the stock price even further, or he could be forced to post more of his stock as collateral for the loan. Either way, it's not good for him OR for the company.
Elon has used those loans to finance a rather extravagant lifestyle. He own FIVE mansions in Bel Air, all right next to or near each other. He owns a $70,000,000 private jet, a top-of-the-line Gulstream G650 ER, and flies everywhere with it, burning immense amounts of fuel sometimes just commuting within Los Angeles (between Hawthorne and Van Nuys airports, for example). Because his unusual compensation arrangement at Tesla is contingent on the company's increasing market value or maybe someday turning a profit (which has never ever happened), these loans against his Tesla stock are his main bread-and-butter.
In other words, Tesla's fate as a company and its stock price are intimately tied to Elon's personal financial solvency. That's gotta create some conflicts of interest between his various jobs as CEO, head of the Board of Directors, and a person who doesn't want to be personally financially wiped out.
Wow! I Googled and there it is: *"At the end of 2016, Musk had 11,420,723 shares pledged as collateral. At the end of 2015, it was "4,000,000 shares of which are pledged as collateral to secure certain personal indebtedness owed to Morgan Stanley.""
https://www.inc.com/erik-sherman/1-reason-why-elon-musk-migh...
His lifestyle isn't the big problem, IMO. He's not Johnny Depp, he's way richer. That money most be going somewhere else...
Does that mean his debt increased by 7M shares? At ~250 a piece? Almost 2B$? Is that what he actually owes or is it more like a line-of-credit up to 2B$ He's burning money faster than Tesla!
There's a current tax dodge where high net worth people get pledged asset loans and spend that, because loan proceeds aren't taxable, but selling stock is. Selling stock in a company you're the CEO of also can be bad PR, but pledging it might be less bad.
OTOH, selling stock to redeem a pledge could be scrutinized for insider trading, and such a large amount could move the stock, so if I were loaning the money, I would require some large multiple of the loan in pledges -- enough so that I would expect not to have to call the pledge, because I know it will be a disaster if I do.
It's close to 13.775M, and growing. The worrying sign is that the company is losing tons of money at the same time. As the author of that article writes:
> So, Musk has steadily increased his personal leverage to a company that has been steadily increasing its financial leverage. That's a double whammy. It's too much financial engineering. In following other companies I have experienced situations in which a CEO faced margin calls as his company's share price dropped. It is not pretty, and obviously adds incremental selling pressure to an existing decline.
It just seems inevitable that the colliding forces of an overleveraged CEO running into an overleveraged company will create some kind of financial implosion.
If you short a stock, you profit when that company does poorly; since Tesla is one of the most shorted stocks out there, we have many people trying to spread FUD via blog posts/tweets/etc in hopes that they can drive the stock price down. (Or in some cases even going to extremes like fraudulently submitting reports to the NHTSA claiming design flaws and problems with Tesla cars.) This has the side effect of damaging public perception of Tesla.
I don't know why I'm getting downvoted. The parent post asked why short sellers harm companies, and I gave a legitimate answer, and that answer is also exactly one of the reasons Musk cited for wanting to take Tesla private.
It's because you're answering the wrong question. It isn't how short sellers overtly try to lower the stock price, it's how they inherently lower it just by shorting the stock.
The answer is that a short sale is borrowing a share and then selling it, which increases the number of shares available for sale and by supply and demand reduces the price (until the short seller eventually buys back the stock to return it to the person they borrowed it from). In the meantime, which can be as long as the short seller is willing to pay interest, the stock trades lower because the extra share is on the market. It's essentially the same principle as the way banks lending money to people causes inflation because it increases the money supply and so lowers the value of the dollar.
Seeing a lot of existing shorts also tends to spook buyers, which also lowers the price, though it also attracts buyers hoping for a "short squeeze" that raises the price when the short sellers eventually have to buy back the stock.
Your answer is correct too, but the question originally asked was "what would he have gained from destroying the shorts? I understand that shorts are effectively a bet that the stock will go down but do they actually damage the company in any way?" The answer is yes, short sellers do damage the company for a variety of reasons, some reasons relating directly to stuff like stock price, and other reasons being more indirect like the one I cited.
I saw that other answers had already explained how shorts lower the stock price, but nobody had pointed out the other ways in which they "damage the company", as the original post put it.
Tesla's stock price is very high right now, largely on the basis that many investors expect it to do well in the future. This high valuation makes it easier for Tesla to raise more money to fund its future ambitions. The short sellers are promoting a story that Tesla will not do well in the future, and is overvalued today. If they manage to convince other investors of this story, the stock price may decline and hinder both Musk's personal wealth and prestige, and Tesla's ability to fund its future operations.
So it's somewhat understandable that Musk doesn't look kindly on the short sellers - he would prefer that skeptics stay quiet and stop trying to ruin his company's valuation. You are correct, however, that acting in a deceiving manner to make the shorts lose money is not an acceptable retaliation.
> "he would prefer that skeptics stay quiet and stop trying to ruin his company's valuation."
Yes, as would any company. He went public. He should have known better. If he looking for unconditional love then the stock market is not the place.
I don't think Musk is a bad guy. Torn, tired and confused ATM but not a bad guy. Unconventional thinkers + doers always come with some baggage. It's part of the profile. However, in this case, he should have kept his mouth shut and channeled that energy into proving the nay-sayers wrong.
Yes. I saw a tweet the other day that essentially said that the very worst thing you could do to Elon Musk would be to lock him in a comfortable conference room with plenty of food and water and excellent WiFi signal...and his phone.
I can think of a political figure for whom this would be true, too.
He also goes on personal crusades against members of the press, or just some random people that have said something mean, but true about him. (Vern Unsworth)
He is very open to fans who give him good press, but closes up, and dismisses boring questions from haters and non-believers and shorts.
Now, there is certainly a bit of a track record with a recent American presidents for this sort of thing. I'm not sure you want to double-down on that.
What is the middle ground here? Are all public figures supposed to completely hold back all views and follow some unspoken social rules?
It's one thing not to make dumb mistakes that hurt your company but the end result of this outrage/apology tour culture we're developing and forever expanding the scope of is going to create a completely risk averse, milquetoast, and boring culture where honesty from public figures is rare and withheld as it was in the Victorian era.
I'm happy there are people like Musk who push back on this idea. He's still human, this is how he actually feels, and he has nothing left to prove to the world as a billionaire with multiple successful companies.
Plus measuring a private citizens communication to the same degree as a presidents is a bad idea. And it's like a good reason why Elon wants to take his company private as well.
I'm okay with having red lines but everyone seems so eager to make those red lines one step above corporate-speak filtered through a PR firm and a focus-group. At some point we need to push back on this and tell everyone to calm down, the world isn't ending because someone tweeted something you find (the key word here) mildly offensive.
> What is the middle ground here? Are all public figures supposed to completely hold back all views and follow some unspoken social rules?
The middle ground is that you shouldn't be so full of yourself, that when you make a technically stupid suggestion, and get called on it by an expert, your immediate reaction is making personal attacks against that person.
And then, instead of apologizing, doubling and tripling down on it.
The middle ground is that when the owners of your company ask you questions about your financials, you don't dismiss them as boring questions, and then take five fluff ones from some dude that makes gushing YouTube videos about you.
The middle ground is that you should generally behave honestly in public.
The middle ground is that you shouldn't fire people from your company for testing positive for THC, and then going on the air, and smoking pot.
These aren't some arcane, unwritten rules, that only slimy politicians and social contract lawyers understand. This is basic human decency.
> Plus measuring a private citizens communication to the same degree as a presidents is a bad idea. And it's like a good reason why Elon wants to take his company private as well.
If you're exhibiting a lot of selfish and narcissistic traits as a private person and CEO, you'll probably keep exhibiting them as a president. I don't think the amount of scrutiny you undergo in the latter job goes down.
> What is the middle ground here? Are all public figures supposed to completely hold back all views and follow some unspoken social rules?
If you're a major public figure, try to hold back on accusing someone who has just shown themselves to be pretty heroic by rescuing stuck children, a pedo.
Everyone makes mistakes. That's part of being human. The answer doesn't have to be total control and aversion to personality and honesty in media. Which is what people seem to be pushing as the end goal, where no one ever says anything dumb or bad ever.
Short sellers. People who sell something they don't own, speculating that they will be able to buy it later at a lower price.
If so, they make money. If not and the price goes up a bit, some shorts are forced to buy at the higher price to limit their losses. That pushes the price up further, forcing more shorts to buy, etc., causing a "short squeeze" where the price rapidly shoots up very high, "destroying" a lot of shorts.
Pedantically shorting doesn’t have to be borrowing the underlying instrument. Put options are another way to trade on the idea that a stock will go down. I’d actually bet it’s the more common way. It would still be colloquially referred to as being short.
That's actually the opposite of "pedantically" given that you're playing loose with the definition. Pedantically, shorting is selling a financial instrument you don't own, with the idea (though it is not a requirement to fit the definition) that you'll give it back later by buying at a price lower than it is now.
What you described is options trading, one method of which hedges against declines in stock price. Yeah, one could take a "short" position by buying puts, but it can be argued that a short position is not what puts were originally designed for. In contrast to short sellers who obviously intend for the price to go down, or they won't make any money.
I do question whether puts are the "more common way" given that they have an expiration. You can hold on to a short sell as long as you can pay the interest and the loaning party doesn't want their shares back.
Pedantically, I would agree with your definition if it was phrased as "short selling" and would ask for more clarification ("via what?") if someone said they had a short position.
"Short selling" refers to selling borrowed shares. "Being short" is the opposite of "being long" and refers to exposure, irrespective of the instruments or methods used to attain it. TL; DR one can be short through options or short selling.
A short, or short position, is selling first and then buying later. The trader's expectation is that the price will drop; the price they sell at is higher than the price they buy it at later. The difference between the sale price and the buy price produces a profit or loss. [1]
It’s important to note that Elon screwed over the “longs” (people holding TSLA stock) too, not just the shorts. Many people and funds bought more TSLA stock in the $350’s range on the assumption that of course the company could/would go private at $420/share. After all, hadn’t the CEO just said so?
I was reading r/TeslaMotors that day and a long made the astute observation that shorting the stock after Musk's announcement when it hit around $380 was the most logical thing to do, because at most you'd be out 10% if Musk were telling the truth. If I had a trading account I think I might have gone for that.
Max loss being 10% is absolutely not accurate at all in that scenario. Taking the company private would still be up to a shareholder vote and shareholders could determine that the price offered was not sufficient. In that case, there are a lot of ways the stock could trade above the takeout price.
I'm an experienced trader in the sense that I've had only bad experiences trading. Thinking a stop loss order would help I (and the order) failed to account for one of those flash crashes that happen for no obvious reason other than to trigger execution of stopped orders.
With leveraged products (like rolling turbos [1]), that risk is usually on the offering institution? I dabbled in those a few times when pretty sure (or full) of myself. There are no margin calls in turbos, you add leverage to your liking (x 2, x 5, x 10, ..) and you pay a hefty interest on your leverage (say 7%). Your exposure is exactly the price you bought for.
Unfortunately I was long Kraft (the food co), completely unleveraged, and got taken out at a 15% loss thanks to a flash crash-induced stop loss. It taught me a lesson that only losing real money teaches.
Sell short and buy a corresponding (shares short / 100) number of call options at $420 strike (which, in theory, if Musk were telling the truth, should essentially be worthless but in practice will come with some amount of premium). That way you have a guaranteed exit at $420/share + option premium paid. You could reduce your option premium cost while slightly increasing your max loss if you went with $430 calls or whatever.
That could work too; without seeing the numbers it's hard to say. For example you might have a higher chance of losing your money due to theta decay depending on how far out you're buying. And the premium on the puts is going to be substantially higher than on the defensive calls unless you go significantly OTM.
Well, as others have pointed out, I might have been in for a bigger loss based on my assumptions about shorting :). I mean, had Musk been telling the truth.
Funding an account usually takes a few business days unless you use a wire transfer, which has a cost. By the time you open and fund the account, it may be too late to execute the trade.
Long is short-hand for anyone benefiting from the price of the stock rising. This includes people who own the stock outright, have bought on credit, own call options, have sold put options, etc.
It’s irrelevant where it is said so long as it is said publicly.
Edit: This is the same reason Elon is now being sued for "Twibel". You cannot say state lies publicly without legal repercussions. "Funding secured" is classified as material non-public information.
I used to work in finance and regulatory compliance.
There’s no requirement that he lie that way in a regulatory filing, previous posters are trying to explain to you that it’s enough to make the claim publically. Lying in a filing would be a different crime.
Either the Twitter account is a financial venue covered by the regulations at issue, or making the announcement there was illegal independent of its truth.
Nothing is guaranteed, but can you explain why they won't be? Selling lots more cars, they cost less than they sell them for, that should at the very least greatly reduce their loss,they think it will be enough to make them profitable.
I don't think they will be profitable enough to pay back the staggering loans coming due.
Even if they manage, I fail to see why they should be priced much differently than GM, Ford, BMW, Mercedes, Toyota as far as long-term stock valuation goes. The "synergy" promised from SolarCity and Powerwall and so on doesn't seem to be a thing any longer.
I don't think a giant touchscreen for an interface has broad appeal but we'll see how they sell. iirc there aren't even buttons to lock the doors? talk about cheap.
I opened my first actual short position that day (instead of just buying puts). He literally set an upper limit on how much money you could lose and I just felt really confident he was full of crap.
Got out of the position at a bit under $310 so left a lot on the table but was happy. He literally handed people considering opening a short position on the stock a gift.
The small upside of this is that maybe Musk will be convinced to settle the libel suit that was announced yesterday [0]. For the suit filed in the UK, the max loss would be ~$400K (unless it goes to trial and he ends up paying Vern Unsworth's legal costs), and it would spare us the sad spectacle of Musk trying to prove that Unsworth is a pedo.
I give Musk a little bit more credit than brutely calling someone a pedo without any proof. If you are as rich as Musk, there must be someone you can pay to dig up dirt on your opponents. Now there may be more trouble in showing that proof than settling. 400k is nothing for Musk, but principles and hurt ego are priceless.
Seems like a better response would be to prove your submarine is awesome than claim the detractor is a pedo. But I'm not the smartest man in the world.
It'll be interesting to see if Elon Musk, darling of startup entreprewannabes, gets a pass here.
I hope his followers understand the precedent this sets. Are they truly about engineering solutions to tough problems (as they claim they are), or are they just a cult of personality cultivated to protect a thin-skinned master?
I give Musk a little bit more credit than brutely calling someone a pedo without any proof.
Have you missed the multiple other shit storms here lately where he smoked a blunt on camera, said crap on Twitter he shouldn't be saying, cried in an interview while looking completely exhausted, etc?
He isn't exactly putting on a convincing performance as a trustworthy, stalwart, social conservative ("respectable business man") with all his ducks in a row.
Musk had repeatedly challenged reporters to “investigate” Vernon Unsworth, and they did. They found no criminal records in the UK or Thailand, no marriage records, and AFAIK, no record of Unsworth visiting or moving to Thailand in the timespan Musk describes. They did however find Unsworth’s girlfriend, who is in her 40s and had been posting about her relationship on social media for years, which would support Unsworth’s assertions that he had first visited Thailand in 2011.
If Musk is as good as a human as his devout fans think he is, he’ll put truth and his grand hopes for humanity over his ego, and give Unsworth — who let’s not forget, was essential to saving those boys’ lives — a proper apology and compensation.
Many argue that you can't have Tesla without Musk, but I don't believe that's true. There is a paradox that can be observed over and over throughout history: great conquerors rarely make great managers. What Tesla needs now is a manager.
Maybe Tesla needs to fail in the market. After seeing how he behaves on twitter, I just cant imagine the chain of command in Tesla works effectively internally. With the leader so fragile in terms of ego, so easy to go ballistic and with seemingly no ethical limits on how he treats those who don't instantly bend to him.
He seems to care more about building personality cult around himself then about running business.
There are plenty of companies with toxic cultures, it is not like that would be unusual. But here, I just cant imagine people under Musk ever telling him he is wrong or telling him about problems. I would guess that his grasp of reality will be increasingly wrong. To a degree it is normal, of course, but
here it seems to go really to extremes.
This lawsuit is peanuts to Musk, money wise. Say he settles it for $20 million, that's nothing. And maybe Musk hires dozens of detectives that find out later that Unsworth went with underage girls (a lot of Europeans with some money do over there.) Still it's very petty of Musk to pick a public fight with a "commoner"
He wouldn’t settle it for $20M because libel damages aren’t capped at ~$400K in the UK. It doesn’t take “dozens of detectives” to undermine Unsworth’s story, but Musk has not yet managed to show anything, not even a FB or forum post, that would contradict Unsworth’s assertion of when he first visited Thailand.
The stereotype of white men going to Thailand for sex tourism isn’t proof. And to think it is evidence is incredibly ironic, because Unsworth, besides being the resident expert of the cave’s geography, reportedly had to push hard for Thai authorities to take his advice to bring in his British expert diver friends who ended up conducting the rescue.
My point was that even if true (what Musk said) he showed his pettiness in getting involved with someone that criticized him. As for the libel amount in USA, there's a limit too. Even if the jury goes haywire judges and appeal courts intervene.
As for the truth...we don't really know until there's discovery
There's no statutory limit on damages for defamation per se under California law. It's literally whatever the jury decides is appropriate, modified by what the judge thinks is reasonable.
EDIT: added the "per se" since regular defamation requires proof of damages but the per se form does not.
But in reality there is a limit. The jury can say $2 Trillion. What is the largest award ever that made it past appeals? Being called a pedophile publicly by Elon Musk is as bad as it gets, but it's still a personal thing, not a loss of $Xx billion in sales or brand name.
Personally I think Musk needs an intervention, something not right with him and he needs to chill out, detox or whatever for a few months.
If Musk offers a huge reward, you'll see Pattya Beach hotel and bar owners checking decades old security cassettes.
Not to mention the lawsuit for calling that diver in Thailand a pedo.
Right or wrong (the dude certainly seems not to be a pedo), Musk is the ceo of a currently near-failing company unable to produce and deliver cars as promised. And a defamation suit is what he's spending his time on? I'd be livid were I an employee.
He's seeking just a mere $75k in damages.. there's no reason for Elon to not just pay that and move on, given lawyers would cost more. This frankly looks like Unsworth looking for a modest handout, betting that Musk wouldn't spend more money trying to prove he is in fact a pedo. On a totally unrelated note, how many child prostitutes could you buy with $75k? Just randomly curious.
That's not true, $75,000 is the minimum amount to make this a federal case so the lawsuit is just saying it was at least that. He'll almost certainly have to pay a lot more.
I seriously hope that through this Elon Musk learns that he's not an expert at everything and sometimes he needs to shut up and listen, but I doubt it.
If he can't weasel his way out of this, I imagine he'll continue to spiral and lash-out... all this because he just can't shut up.
A long list of investors publicly denied any talks with Tesla. All potential banks expressed puzzlement with the tweet as well. One of them would absolutely have to be involved for a deal of this size and none were.
He's said a lot of anti-short-seller things on twitter. Even if he genuinely wanted to take the company private, it's hard to see the "funding secured" statement as anything other than a lie.
Such a great land we live in where a CEO is investigated within weeks by criminal justice agencies for making a few tweets, but during the 2008 crisis other kinds of fraud (approving loans without verifying income, robo signing of "contracts") that cost people jobs, homes, and even lives, got CEOs unprecedented bonuses and billions in interest free loans to keep their ships afloat. God bless the USA.
The CEO in question may have violated multiple state and federal laws.
The problem during the crisis was that many of the things you listed weren't illegal because the laws and regulations that would have made them illegal had been rescinded in the years or decades prior. Thus, the CEOs got to keep their jobs and their bonuses and their freedom because even though what they were doing was highly immoral, it wasn't illegal.
Laws that exclusively protect shareholders. That's the problem. And most of the population doesn't have the resources to lobby Congress to roll back those laws the way financial laws were rolled back. The fault for that inequality lays squarely on our nation.
One of the episodes on the Netflix documentary Dirty Money is about short sellers with regards to certain pharma stocks (the one click baiting with Skreli in the thumbnail but not in the story, otherwise it is a great watch). And one thing that struck about me about the short seller they interviewed was her analytical and systematic approach to it. What she was looking for was yet to be recognized flaws in a certain company that can only result in falling stocks in the long run. And than acting on them in concert with others.
A mean thing to do? Maybe. Or you could call it natural selection in some cases.
Going back to Tesla and Musk, I think his behaviour in the last couple of weeks, and all the information that surfaced since, probably just convinced every short seller out there that they are onto something.
Short sellers are not mean, it's a good thing they exist. They're calling out companies they believe have serious problems, to the benefit of shareholders who are being misled.
Except when they're actively expounding upon and peddling bad news to ensure the stock price drops at the right time. That is what Musk is most frustrated by.
In my mind, all negative news about Tesla is now called into doubt as being news peddled by shorts. This is the challenge of declining journalism standards: all news now has someone with a vested interest behind it.
I havr to disagree here. Considering all the real trouble Tesla is currently in, not to mention Musk himself, and with otger car makers catching up electrical vehicles there is undeniably some doubt about Tesla as a company. On top that you have shaky financials and the departure of important executives, also in financial department. So yes, just looking at that without any hard number crunching and financial analysis the picture is not rousy.
All of which is sad, Tesla really had and still has some appeal to it. I don't think that appeal in itself is enough for a public company.
And by the way, not all negative reporting is automatically bad journalism or even fake news.
It would be a (possibly huge) blow to our future as a planet if he were banned from being an executive of a company for even just 2 years. I hope for humanity's sake that it doesn't come to that.
What makes you believe that? All the major car companies are making EVs and there are several SpaceX competitors (Blue Origin in particular). The SolarCity side of Tesla's business is declining, but there are still many companies offering solar installations.
Besides that I feel Elon's companies are the more important industry leaders in those areas, is anyone else working on high speed underground transportation around the US or space tourism?
All great points. This is a lot worse than it probably seems to most people on HN. Imagine a prosecutor telling a jury that Elon funds a lavish lifestyle (with lots of details of the excess) with loans against his Tesla stock. That shorts of the stock threatened him personally, because of those loans, and alleging that he threw the $420 figure out there to counter-act the shorts. That’s a terrible narrative to have to deal with. The responses are not exactly things that would play well to a jury (“no, it was a marijuana joke!”).
Indeed, and to that end, the punishment could be that he is barred from serving as an executive or board member. I think that would be a far deeper punishment to him than if you took every penny of his.
> Imagine a prosecutor telling a jury that Elon funds a lavish lifestyle
Recent Paul Manafort case shows it doesn't do what its intent to do. Jury was not interested in Manafort luxury lifestyle and judge himself outright ban prosecutors from bringing it up again and again. Unless you believe they can prove Musk bought $2B worth of business suits.
>The sad piece of karma in all of this is that Musk tweeted in an effort to destroy the shorts.
Its not about trying to destroy or support the shorts its about having an effect on the stock price at all. Its some insider type stuff. He cant do that. The reason we like Musk so much is the same reason hes "failing". Hes not the typical CEO and he really doesnt want to be. I dont think he like being the boss, I think he rather build the cool stuff.
I think the money went to his head he is realizing that there is another tier to being rich and powerful that he still needs to climb in order to support the projects that drive his ambition.
>>Imagine Elon getting a 2 year ban on begin an executive in a company.
In the US.
I'm sure there are a lot of countries that would be more than happy to invite such a hardworking, ambitious and industrious man to set up company like SpaceX in their countries.
If you make these sort of things impossible in your country, they will just happen else where.
Out of curiosity, what was the DeLorean moment? I know DeLorean didn't succeed in the long term. But what was this "moment" you're talking about? Google gave me nothing.
Probably DeLorean's attempt to traffic cocaine in order to keep the company afloat:
> On October 19, 1982, DeLorean was charged by the U.S. government with trafficking cocaine following a videotaped sting operation in which he was recorded by undercover federal agents agreeing to bankroll a cocaine smuggling operation. The FBI set him up with more than 59 pounds (27 kg) of cocaine (worth about US$6.5 million) in a hotel near Los Angeles International Airport after arriving from New York, and the Federal Bureau of Investigation stated DeLorean was the "financier" to help the financially declining company in a scheme to sell 220 lb (100 kg), with an estimated value of US$24 million.
"The risk factors have been updated to include that our CEO is going to be arrested, the remaining executive is running for the hills with substantial severance packages and we will expend many resources to maintain confidence and acquire a new executive team"
I think the excitement in the negativity is because Musk behaves like a petulant manchild. I like Tesla and want them to succeed. I don't like Musk and don't want blowhards like him to succeed.
Sometimes its possible to care so much that you lose sight of what is important. This happened to Elon. I think this will be a case study someday about CEO ethics. I found it very interesting that when he was on the Joe Rogan podcast he had so much to say about social media, and none of it was complementary. How he did not see the dichotomy of his twitter use and this situation strikes me as humorous. I feel like Elon needs to find some new handlers and get some team members that can keep him from shooting himself in the foot.
I only recently got back on twitter. I do not use my likeness or use it for any other reason except to find out about things I consume(stand up comedy, concerts, etc). Twitter is a great platform for that. Its an awful platform for speaking your mind when you run a company(or the country)
I could take your comment as either a dig at me or at Elon. I can see how either is applicable(and valid). I think I can just add that if I screw up on Twitter, there would not be the same consequences to a business or shareholders that Elon may face, but obviously it is not my place to tell him or anyone else they are doing it wrong.
"I'm using social media the right way, the others are doing it wrong and I wish they'd go away"
"We're using our sovereign power and military force the right way. The others are doing it wrong, and we wish they'd go away."
Same old story. In one of Raymond Smullyan's books, there was a story of a word the US codebreakers in WWII couldn't quite translate. In the end, they settled on "pro-Japanese" as a shaky translation. Years later, a retired codebreaker is talking to a retired Japanese soldier, and is told that the code term meant, "sincere."
Ethics? While true I think it will be more of a case study on sleep deprivation and the increased risk of making huge mistaken even for a "genius." I'm willing to bed 2hrs of extra sleep a day and delegating a bit more to have these 2hrs would have not only minimized these stupid mistakes, but obviously greatly increased his well-being and life-expectancy. In short, no matter how smart you are, if you have so much hubris that you think you can bend the laws of nature and do without sleep and ignore what your body is telling you, you will end up making a horrible mistake soone r or later.
Not sure what you think is wrong with this statement. Seems to me that he let his hubris, lack of sleep and desire to stop the short sellers get in the way of using a bit of discernment. For him that tweet was a weapon against the shorts. I have no reason to doubt that he is fully committed to Tesla being successful, so I stand by the statement.
Considering he’s also facing a defamation suit for calling a man a pedophile on Twitter, and then doubling down on the claim later, I think we can afford to be less charitable about Musk at this point. He has an inexplicably fragile ego, whether it’s in relation to his PR move around those trapped kids and the people who actually saved them, and his conspiratorial ideation concerning “the shorts,” or his willingness to tank his own stock to lash out.
He doesn’t come across as caring too much about anything except his ego.
It turned out Tesla wasn't killed by not being able to make the model 3 at all, it wasn't on being able to make the model s in larger volumes, it wasn't because there was no demand, that there would be no demand after various incentives around the world went down (still some left in the us, also available to all other car companies by the way), it wasn't because they couldn't make the model 3 in volume, it wasn't because they'd all catch on fire and burn up in accidents, it wasn't because the over-promised-over-named autopilot was dangerous and would kill people, it wasn't because the leaf, the volt, the bolt, the i3, the i8, and continually forthcoming cars from audi, porsche, ford, mercedes, bmw killed them. It wasn't because there was a secret sec investigation was preventing them from refinancing, it wasn't because they have just lied all this time about selling the cars for less than manufacturing cost (separate from their enormous money spent on infrastructure), it wasn't because the batteries would run down and not survive heat, cold, regular driving, daily driving, supercharging.
It was damn stupid for him to make that twitter comment.
You may be getting down voted, but you're right that the last several years of fear, uncertainty, and doubt has been shown to have been bullshit in having not panned out.
Meanwhile, the last several years of warnings about climate change have been shown to be a true warning. My mother had to evacuate from a fire. A friend has had their city flooded. A different friends home was damaged by a hurricane. I've been begged on the street for a drink during a heat wave.
people should take their tinfoil hats off. People don't short tesla because they are evil but because they think there a profit to be made.
You don't see eco-activist shorting ExxonMobil. Reasons simple: there is no reason to believe that ExxonMobil will go belly-up. Meanwhile, there are a lot of indicators that tesla could fall apart.
Just ask yourself: Is the tesla stock massively inflated or are there some anti-tesla illuminites who banded together to sabotage tesla with millions of risk capital just for the lulz?
Can anyone knowledgable of this kind of stuff comment on the likely outcome of the situation and scenarios (without sensationalizing)? If found guilty, not guilty, penalty (jail, fine, other), investigation time, length, impact on other companies like SpaceX, gravity/frequency of the event vs other companies / offenses, etc.?
The DOJ couldn’t even prosecute any major banks for the fraud that led to the financial collapse in 2008. That is how hard it is to prove criminal intent for white collar crimes.
At best, they settle with Musk for some financial penalty.
Imagine a private company with ballistic missiles and submarines...
I was musing the other day that Elon Musk may be planning to run for president. Why? Well, if there's one thing that 2016 showed us, it's that the road to the White House runs through snubbing Wall Street, calling the press a bunch of boring liars, accusing your opponents of pedophilia, making bizarre incoherent tweet storms in the middle of the night, and bragging about the size of your rocket.
He was born a US citizen though. The requirement isn't that you are born on US soil, but that you are born a US citizen. John McCain was born in Panama.
technically it says you must be a 'natural born' us citizen. who the hell knows what that means. If we assume the framers were well-read and fans of shakespeare, this means that anyone born by caesarean section is disqualified from holding the highest office. They were wise enough to know that the dermal microbiome of c-section children is destabilizing creates individuals of temperament ill-suited for the role.
McCain is distinguishable from Cruz' case though. He was born on a Naval Air Base in a US territory (the Canal Zone) which is legally a lot closer to US soil than Canada is--and some of the old common law precedents specifically address cases like this.
The requirement is that you be a "natural born" citizen.
That said, although legal scholars can have how many angels can dance on the head of a pin debates about this, the most reasonable interpretation is probably that they're US citizens/eligible for US citizenship from birth. If push ever came to shove on this question, one would hope the courts would side with the most liberal interpretation.
Which isn't 100% defined and legal scholars can and do argue the edge cases based on lots of things including very old British common law antecedents. The consensus seems to equal citizen from birth although some disagree.
"No Person except a natural born Citizen ... shall be eligible to the Office of President"
Natural born means "citizen at birth", not "born in the US"> One can also be a citizen at birth (under certain circumstances) by having parent(s) who are U.S. citizens. Ted Cruz unequivocably meets this standard.
The Constitution doesn't define "natural born citizen" but the majority of scholars take it to mean "citizen by virtue of birth" rather than "citizen by virtue of naturalization."
I have no idea why you're talking about IVF children, they aren't legally different from naturally conceived children.
He is a citizen by birth, not through naturalization.
IVF is irrelevant if the biological parents are known and in a relationship, or if the birth is inside the U.S. In particular you cannot gain citizenship through donated sperm, though.
This is "natural" in a legal context not a biological context. What this generally amounts to meaning is that you met the requirements of being a citizen when you were born. This doesn't specify a method of birth (cesarean or otherwise), but instead that you're either born to existing citizen parents, on us soil, or on otherwise recognized us territory (Puerto Rico, military bases, embassy grounds in a foreign country I think also can count) and I believe I've heard that an exception to this is that you're not being born to diplomats on official foreign government business, because not all countries recognize dual citizenship and forcefully giving the newborn US citizenship could cause diplomatic issues with the other country.
Natural born citizen is not unambiguously defined. However, the common interpretation is citizen from birth, which Cruz was by virtue of having a mother who was a US citizen.
The clause in the US Constitution is brief and potentially ambiguous, but there has been no shortage of lawsuits about presidential eligibility and the legal definition in practice seems to be quite unambiguous.
For example, regarding Ted Cruz:
> Two November 2015 ballot challenges in New Hampshire alleging that Cruz was not a natural-born citizen were unsuccessful. In December, a similar lawsuit was filed in Vermont, and an unsuccessful lawsuit was filed in Florida. In January 2016, similar lawsuits were unsuccessfully filed in Texas and Utah, and two similar unsuccessful ballot challenges were filed in Illinois. In February, two similar unsuccessful lawsuits were filed in Pennsylvania and one was filed in Arkansas; a similar lawsuit was filed in Alabama; similar unsuccessful ballot challenges were filed in Indiana; and similar ballot challenges and an unsuccessful similar lawsuit were also filed in New York. In March, a similar lawsuit was filed in New York. In April, a similar ballot challenge was unsuccessfully filed in New Jersey.
> No lawsuit or challenge has been successful, and in February 2016, the Illinois Board of Elections ruled in Cruz's favor, stating, "The candidate is a natural born citizen by virtue of being born in Canada to his mother who was a U.S. citizen at the time of his birth."
Which is, frankly, the sensible definition. People would and should rightly look askance at a court decision that found some obscure legal precedent to come to a different decision rather than just letting the voters decide. The question may make for interesting law review articles but there's pretty much zero practical justification for a more stringent definition. (Especially given that even the citizen from birth requirement is arguably something of an anachronism.)
Trump is far from being a poet but he is a good orator and in the very least an effective communicator.
It should be noted that a common aspect to practically all US presidential candidates is that they all dumb down their communication style when running election campaigns, as that's a key aspect of all winning candidacies.
Musk didn't have a major network invest in his name as part of their reality-TV branding. It's true that investing and tech circles are aware of him, but he's not a very well known brand to middle America, which would be key.
From many of the interviews I have seen/read, he really only seems to care about human beings becoming a multi-planetary species. Everything else is a side show - means to an end. I know you were lampooning both him and the current administration simultaneously, but I still have faith in ole musky and his space ambitions. Right now it would only take one big uninvited space rock for the party to be over, but if we were on a couple other planets the party might go on!
I'm curious - supposing HN had the power to decide, would you replace Elon Musk as CEO of Tesla? What kind of future does the company have without its founder?
Personally, I think I would be much more confident in Tesla, and much more likely to buy a Tesla product, if he were not in charge.
I would imagine the share price would drop dramatically if he was replaced, which would hurt Tesla's badly needed ability to raise capital over the next few quarters. They desperately need a new CEO but Musk has dug them into such a big hole that it may be too late to find one.
It's certainly illegal, and it might be difficult to maintain, but I'd argue that it happens quite often across many industries, and very well could happen here.
Toyota already has plug-in cars that use lithium batteries. They'd probably merge Tesla into Lexus and open the Supercharger network to anyone who could pay.
Have to wonder if Toyota still have the keys to the NUMMI plant.
> Isn't there a good chance they'd just mothball the whole company and keep on making regular gasoline-engine cars?
All of those companies - and the entire industry - are investing heavily in their own electric cars; some already have announced dates when they will stop production of gas engines IIRC. Depending on the price, of course, I imagine they'd love to add Tesla's prestige, patents, and maybe their talent.
My uneducated guess is that's how Tesla will end, a division of a major car-maker. When did GM last add a new brand? Imagine the bidding.
Understanding car production is less important then for EV then massive battery investment and knowlage, building a integrated brand, global charging infrastructure and so on.
Toyota might be better at building profitable cars, but Tesla is better at building profitable EVs.
I think Tesla's failure at scaling their manufacturing is pretty good evidence against your claim. There are other brands making EVs without the same issues as Tesla.
They have scaled their manufacturing quite well be now. They are not top of the line but the have a real mass production car.
Have you actually looked at the production numbers of those other EVs? Because there is nobody outside of Tesla that has mass produced EV and even more imprtantly, to do it with profit mergin per car.
Teslas are the Top 3 most sold EVs in the US market. The model 3 is by now equaling the sum of all other EVs and is almost 100% of the growth in EVs.
Futhermore, the iPace, i3, Tycan and many others saw production delays as well. So the idea that you can let some established company do it and they will do way better then Tesla has jet to be shown.to be true.
The original Tesla Killer, the Bolt, is outsold by Tesla 15 to 1.
Competitors have announced many EVs but most will hit the market around 2020 and most of them will not produce near as many as the Model 3.
It's impossible to separate the higher demand for Tesla from their higher sales. It's possible that their sales are higher because they can make more, but it seems more likely that their sales are higher because demand for Tesla is so much higher.
What's clear is that we know Tesla has had (and may continue to have) issues with production. Meanwhile I can't find anything suggesting there were any production issues with the Chevy Bolt or Volt or Nissan Leaf, the other models I'm familiar with. I'm not familiar with any of "iPace, i3, Tycan" so I don't know what to look up there to see if there were comparable issues with them.
The Bolt and the Leaf has less production issue because they are far smaller production numbers. Also, we don't have close to as much news about problems in their plants.
Guess why you don't know about them, because they don't sell well or are delayed.
Tesla will always have production issue because they are always trying to grow. Every large company has production issues. The question is how much product can you produce at what price.
Not me. Tesla is already in a precarious position and I expect it to fold pretty soon if Musk departs. Either that or they massively scale back their operations - in which case I will have no further interest in the company.
If Elon is doing things that are illegal or otherwise just boneheaded now, how much leeway does he get? What would it take to make you decide he shouldn't be CEO?
But Tesla is not profitable, SpaceX claims to be but the veracity of the claim is untested. They're constantly at risk of collapse (due to bad management), and they don't seem to be self-sustaining - Tesla in particular needs infusions of cash constantly to function, and is essentially on life support. They do make good (or at least novel and fascinating) products, but the cost of doing so is extremely high.
Why does "big" == successful? I'm not saying money is the only thing we should ever optimize for, but I'm skeptical that growth is a viable alternative.
Edit: I've edited the first paragraph substantially because I did not accurately understand SpaceX's profitability vs Tesla's.
In fairness, it's probably more accurate to say their profitability is not clear.
Their president says they are profitable, and they've claimed that several times over the last few years.[1] However, an expose from the WSJ from 2015 indicated they were quite the opposite then.[2] The Motley Fool suggested in 2017 that SpaceX might be on its way to profitability, but it was still unclear whether they really were or not.[3]
So what I should say is that Tesla is not profitable, and that SpaceX claims profitability, but that the claim is questionable. I'll update my post.
Profit doesn't matter growth matters. How can you live in the 21 century and still hold to the idea that profit is what matters? I mean we have seen so many company not make profit for a long time, were they all not successful?
I mean, Tesla could be profitable if they didn't fund massive amounts of expansion.
> Why does "big" == successful? I'm not saying money is the only thing we should ever optimize for, but I'm skeptical that growth is a viable alternative.
They are optimizing for money. They want more revenue, not more profit.
The question is not if the company is profitable, but rather if each product individually can be profitable.
I would be far more optimistic if he was replaced with someone that has a good, established track record. Like, Alan Mulally. I'd go reserve a Model 3 today... :)
No. Use the Apple model. Steve Jobs was needed until the IPhone was really established (not to mention the IPod.) Only then should you bring in a guy like Cook.
> Use the Apple model. Steve Jobs was needed until the IPhone was really established ...
The Apple model was to fire their impetuous founder, decline slowly into mediocrity, bring back the founder, and then achieve historic levels of success. Perhaps Musk needs a Jobs-like break?
> until the IPhone was really established (not to mention the IPod.) Only then should you bring in a guy like Cook
If Jobs was healthy, he'd still be running Apple. And maybe they would have done something visionary since the iPad.
Completely different scenarios, completely different companies. Steve Jobs was never the technical guy, he was more the visionary. He could get away with that, because he had really smart engineers and producing phones and computers is a lot simpler than producing cars. Elon Musk is a genius, but what does he really know about production or getting the cost down for an electric car more than any other CEO of a major auto company? Elon Musk is a visionary, but a visionary for an auto company is not as vital as a visionary for a tech or computer company. They need a guy in tesla who can increase production and lower cost, or sell at a different price point and change target market for their cars. They don't need someone who is going to tweet out a lot of reckless things while hemorrhaging money for the company.
Emphatically yes; Musk being the current head of Tesla and SpaceX has been the defining characteristic in preventing me from seeking work at either company. I'd be sending out applications to both if he announced his departure (or even a long sabbatical).
I believe very much in the missions that Tesla and SpaceX romanticize, but I cannot reconcile those with Musk's public behavior. Calling people pedophiles on the internet, trying to suppress unionization efforts, and seemingly lying about going private entirely on a whim does not pass ethical muster for me.
I'm not sure what he could be criminally charged with - neither he nor anyone else at the company sold stock and profited from his idiotic tweets. I believe you actually need to profit from manipulation in order for it to enter the realm of criminal.
They caused damage to short sellers when the stock price rose because of Musk's lie and they had to cover their losses, how is that not criminal? You don't have to personally profit to commit a crime.
I'm starting to get conspiratorially minded about all of this. It began when I couldn't understand the seeming coordination of the attacks against the Uber CEO. I mean, he seemed like the same kind of garden variety psychopath I expect in the role of CEO - why were there so many hit pieces about him specifically? Now Musk is a new target and somehow everyone is cheering for him to fail.
Seems like if you get into competition with the auto industry or threaten the oil industry by attempting to change consumer behavior then you become a massive target. I actually feel like forces other than public opinion are at work here.
Or, you know, it could be something simple and not a conspiracy at all. If Musk didn't attack every last person who says anything critical about him, even calling one of them a pedo in a public forum, there wouldn't be nearly as much animosity towards him. He has 100% brought this down on himself, he can not blame anyone else.
The regular auto industry is likely to crush Tesla within a few years, regardless of how successful they are with the Model 3. They don't need to take shots at the CEO to achieve that, they're going to do it through bringing their own competing products to market and leveraging their own hard-won experience building shitloads of cars.
Reminds me of the book "private empire" about ExxonMobil.
"Private Empire pulls back the curtain, tracking the corporation’s recent history and its central role on the world stage. The action spans the globe, moving from Moscow, to impoverished African capitals, Indonesia, and elsewhere in heart-stopping scenes that feature kidnapping cases, civil wars, and high-stakes struggles at the Kremlin."
Big cooperations could easily find a way to run a "blackops" negative PR campaign, on top of pulling strings in the SEC
The frequency of these bizarre actions by Musk are going up. Is he seriously just cracking under the pressure of having way too much on his plate? The dude is obviously a genius, but he's turning into a mad genius.
Why do people keep calling him a genius? His main distinction is his money and DESIRE to build interesting things. Nowhere is his staggering, extraordinary intelligence evident. I’d love to be demonstrated wrong, but this genius fetishism seems to be harmful with no benefit: the man is running a company. Judge him on how well he does, not how he’s so intelligent it's so sad he can't take care of his employees responsibly.
The thing is, now that the DOJ has their foot in the door, they may not stop at the infamous tweet. They're going to look at the books. They're going to be talking to allllll the recent senior executive departures, some of whom ran for the hills within days of taking their jobs.
Who knows what kinds of bugs they'll find when they turn over some rocks?
A public lesson for future CEOs to just stay the fuck off social media - Elon swam far up shit creek purely because of his engagement with Twitter. It's not worth the trouble.
I wouldn't be surprised if the Board had (at the least) considered restricting his social media so that his messages require approval from someone else.
Has anyone ever made a psychoanalysis of the average musk/jobs/zuckerberg "fanatic".
I feel like people have some sort of messiah complex. Where companies become religions each with their own set of rituals, like waiting for 10 weeks in the street and inquisitions denouncing critics as hereticals ("shorts", "android-shills", etc.)
Finding out whether people try to replace their philosophical hole left by a lack of believe or being dissatisfied with materialistic world-views is the cause of this "technoreligions" in the 21st century could make for a nice dissertation.
398 comments
[ 2.0 ms ] story [ 307 ms ] threadBut he lied on twitter in a direct effort to cause financial harm to people shorting Tesla stock. You can't do that. He should go to jail.
Do you have evidence of this, or is it speculation?
The "cause financial harm to people shorting Tesla stock" is a bit of speculation but it seems basically obvious to all observers.
It doesn't seem obvious to me. It seems like one of a few interpretations, not limited to:
- Elon was overly stressed (as has been documented recently) and didn't think before posting such an impactful statement
- He considers twitter to be an official outlet for Tesla and just continued with his tendency to publicise his decisions and thought process constantly.
- His idea of "secured" is simply different from the SEC definition and if the funding had been SEC-secured, the tweet would be a compliant form of public disclosure.
[edit]
To be clear, I'm not arguing that the tweet shouldn't be investigated. I'm saying that "he intentionally lied to screw over short sellers" is presumptive and that may not have been his intent.
> His idea of "secured" is simply different from the SEC definition ...
He is the CEO. He's not allowed to have a different definition. Words mean things. That's how we communicate.
Are you putting words in my mouth on purpose? I'm not arguing that he shouldn't be investigated. I'm arguing that "trying to screw over short sellers" is not the only and "obvious" reason why he could have made the tweet.
Also I don't believe his intent matter for criminal liability in market manipulation.
Source? I legitimately haven't seen this.
> Also I don't believe his intent matter for criminal liability in market manipulation.
I'm not saying it does. Where did I say it does? I don't understand why I keep getting this response.
https://markets.businessinsider.com/news/stocks/elon-musk-ma...
Yes, but words are often nuanced and ambiguous. It's why we have an entire legal system to interpret exactly what "words" mean.
Certainly, it was a reckless thing to say and a bad idea given that it wasn't 100% closed. "Secured" was the wrong word to use, no doubt.
Elon: "I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to “funding secured” in the August 7th announcement."
https://www.tesla.com/blog/update-taking-tesla-private
Even if we can't say definitively what was going on inside his head when he posted that tweet we can say that any reasonable person in that role with that level of experience can be expected to understand what "funding secured" means.
It's kind of like if I walk into a store and take something off a shelf without paying for it. I can't claim "it's not stealing because I didn't know this stuff wasn't just free for the taking" because any reasonable person in my situation should understand what a store is and how it works.
Elon is a smart man. He knows this does not mean that funding has been secured. "Could be" is not a "secure" state.
He also tweeted this:
https://twitter.com/elonmusk/status/980566101124722688?lang=...
Was this some elaborate stock exploitation?
I don't mind the investigation but this whole thing, especially all the hate, like he ruined short sellers lives ( the stock is way down since the tweet ), is insane to me.
CEOs have a legal duty to their shareholders and the public to communicate about their companies in a clear an honest manner.
At what point did obvious jokes become illegal?
420...was is really $420? And then smoking weed on Joe Rogan? LOL, now that's funny ;-)
It wouldn't be illegal if there was a tender offer for the shares at $420.
This reminds me of "perp watches" posed by police departments on Facebook and twitter. No charges, but arrested - and you get to live in the newspaper and social media regardless if you are exonerated. Cause, public shaming?
edit: s/peep/perp/
There is simply no other way, the only reason this is a big announcement is because Elon is very active on social media.
"We conduct investigations on a regular basis on a multitude of people over possible perceived wrongdoings."
-vs-
"We are conducting a thorough investigation on Musk, Tesla, SpaceX because we believe he did something wrong."
The first is a non-answer, and puts no blame anywhere. Its their reason to be, so its unsurprising. The second statement itself changes the market the very same way he was claimed to do, and paints him and the companies in a bad light, prior to any finding of fact.
I'm arguing for the defense and protection of the accused. By the very definition, they are not guilty/liable UNTIL the court says they are. But this style of bandying around "We're INVESTIGATING ____" Only puts strong implicit blame and guilt on the accused.
You can call a person a million names to their face, but if you publish an article or book saying you think that person's a thief, and that person's life was ruined because nobody would hire them anymore, then yes you're potentially opening yourself up to legal action.
Ah ok it actually makes a lot of sense presented that way. So it really is about "culture" then.
If you just make "outrageous" comments on twitter, why is it weird that "USA culture" wouldn't generally prescribe jail time? I'm from the USA, granted, but that sure seems like a reasonable protection of freedom of expression.
Racist comments are of course a trickier example, but I think it's perfectly reasonable for there to be a legal distinction between (protected) tasteless/offensive/insensitive statements about race/ethnicity and (not protected) statements that defame or incite violence.
Hate crimes are treated far more seriously than monetary crimes, if that's what you're trying to get out. It's simply that merely making racist statements is not a crime in the US.
it's as simple as that
so i agree that US law makes a bigger deal out of messing with money than messing with feelings
https://www.tesla.com/blog/update-taking-tesla-private
In the post, he also admits that the Saudi Arabian investment would only provide a small fraction of the necessary amount needed to go private.
https://twitter.com/elonmusk/status/1026872652290379776?lang...
Follow the original twitter feed yourself. Its not like its been deleted. Musk is very clear that "funding is secured", and in follow up tweets.
> Am considering taking Tesla private at $420. Funding secured.
> Shareholders could either to sell at 420 or hold shares & go private
> My hope is all current investors remain with Tesla even if we’re private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment.
----------
Days later, Musk posts a blogpost that directly contradicts his original tweets. IE: He was lying originally. We now know that there's no buyer who was willing to spend $70 Billion to buyout Tesla and take it private.
The question then, is was this lie "negligence" (SEC fine), or was it intended to manipulate the price? (FBI jailtime).
The DoJ case implies the FBI is looking into the jailtime question. While the SEC is looking into the negligence question. Both cases will move forward as appropriate.
My bet is that SEC gets him on negligence, but I don't really know enough about history / other cases to know what kind of punishment Musk will get. I'm guessing a fine of some kind, but the SEC does have the power to remove Musk from his CEO position entirely.
This is all drama for drama's sake.
“When you talk about fraud,” [Jina Choi of the SEC] answered, “you’re talking about a state of mind, you’re talking about mens rea. We call it scienter. You have to do something with intentionality. The idea of just making a misstatement doesn’t necessarily rise to the level of fraud."
Misstatements can “be the first step to fraud,” Choi had added. “But generally, when we talk about fraud the F word, I think we are talking about a state of mind that’s a little bit higher than that.”[1]
That telegraphs a pretty lenient stance on misstatements that aren't completely fabricated. And there were actual serious negotiations happening here. That's not in dispute.
Without question, Musk made a misstatement. But what was his state of mind? Was there intent to deceive, or was he merely overzealous in his interpretation of the negotiations? If he can argue the latter then it may not rise to the level of criminal fraud.
[1] https://techcrunch.com/2018/09/13/a-tesla-investor-says-he-w...
American commercial law goes out of its way to avoid criminalizing stupidity. At a certain level, the difference between a genius and a madman is the genius was correct. They are indifferentiable without the benefit of hindsight.
The nail in Elon's coffin (or lack thereof) will probably revolve around the degree to which he documented his animus towards short sellers in the days leading up to the misstatement.
That's a huge issue. If he made his misstatements with the intent of hurting short sellers, that's criminal fraud. If he just made a material misstatement, with no intent to harm anyone, it's a civil case.
Every CEO dislikes short sellers, and nearly every CEO makes "material misstatements" now and then. What separates that from fraud is what the SEC focused on in their comment: scienter.
Scienter just means intent. It's literally just the fancy legal term for intent.
Thus, it matters very much that Musk has a history of trashing short sellers and wishing harm to them, because they can use that history to establish that his tweet was made with the intent to defraud market participants and materially affect the price of Tesla's stock.
Especially the "funding secured" bit. You don't say "secured" if it's not really secured. There is no legal interpretation where "secured" is a harmless mistake.
Again, every CEO dislikes short sellers and literally everything they do to talk up the company hurts shorts, by definition. You don't need any tweets to establish that. It's a given. And every CEO misstates things and makes errors and in big companies every statement moves the stock price. The issue is intent.
What you are doing is focusing on the misstatement, adding in fancy sounding terms like "legal interpretation", and whipping that up into intent to defraud. But as the SEC explicitly addressed in the cited comment, they set the "state of mind" bar higher than mere misstatements. You are going to need more than that to establish scienter.
Your fancy term aside, there actually are other interpretations of his comment. He may have been overzealous. He may have overestimated his investors intent.
Let's look at it another way. Musk is a reasonably smart guy. How far was he going to get with this alleged scheme to intentionally defraud the market? How long until everyone realized the funds were not actually secured and the fraud was revealed? Like, 2 hours? That would be the stupidest fraud in the history of frauds. The conclusion is that, perhaps he actually believed the deal would come together. Erroneously, but erroneous statements are not enough for fraud; the key factor is state of mind.
That and if he's able to show he really thought funding could have been secured but fell through. IIRC we still don't know the full story on that.
"Funding secured" and "funding to be secured" are materially different terms. The point of "secured" is it's been bindingly, definitively agreed upon in a way that makes falling through very, very difficult.
His best defense is, absurdly, arguing a seasoned CEO doesn't understand what "funding secured" means. He might be about to inject enough doubt into a jury to avoid criminal charges, but I don't think that will outweigh the preponderance of evidence which is required for a civil judgement.
But that's the SEC's investigation. The deal with the article today, is that the DoJ... aka the FBI is beginning to get involved. This suggests that the FBI is concerned with CRIMINAL issues with regards to that tweet. Criminal penalties looks unlikely IMO, but who knows what the FBI manages to dig up?
In either case, the FBI looking into it doesn't look good at all. If anything, it helps solidifies the SEC (non-criminal) case of negligence.
Optimism might justify a statement like "final stages of signing funding" or "almost closed the deal" or even "funding as good as secured" -- there might be ambiguity there. Not for "funding secured".
This is as close to textbook as you can get.
No this is not textbook at all. See previous citation from the SEC re: intentionality as a key element in criminal fraud.
"Clearly and knowingly false" is just a serious-sounding way to say a misstatement. Did Musk not actually believe in his heart that the deal was basically done? It wasn't, of course, but it takes more than being incorrect to constitute fraud. It takes intent to do something you know is wrong. Wishful thinking may be fraud but it is not necessarily textbook fraud.
In English, the sentence "Secured funding" is ambiguous in meaning: as a shorthand sentence, it could mean "we would only use secured funding for a transaction like this".
"Secured debt" is a thing, and therefore secured funding is a thing. Unless he clarified it someplace else in a way that was not in his favor, there is plenty of wiggle room in that sentence.
[0] https://twitter.com/elonmusk/status/1026872652290379776?ref_...
This is not true.
https://twitter.com/elonmusk/status/1026872652290379776
So you're saying that, the way securities law works, personal optimism is all it takes to justify any representation of any upcoming financing terms? There's no requirement beyond what's in his heart?
Oops, I mean I didn't say that. The head of the San Francisco SEC office did.
I'm sick of people giving high-profile people in the tech sector a pass on their shitty behaviour because of the pervasive hero-worship culture. Jobs, Zuck, Torvalds, etc.
Irrespective of Musk "caring too much" or whatever other justification his fans have concocted, this is exactly the sort of behaviour (lying to manipulate the market) we have laws to prohibit.
We see articles every so often about how Tech as an industry needs to play catch up on the Ethics side of things. Now's the chance.
His tweet turned out to:
- give the shorts a big dip in his stock,
- an investigation by the SEC
- an investigation by the DOJ
- the backing off of a deep pocketed investor in the Saudis
- Him potentially being personally liable, which would mean having to step away from SpaceX and Tesla if he was found guilty of fraud.
This could be the biggest thing to come out of all of this. Imagine Elon getting a 2 year ban on begin an executive in a company. Or SpaceX not being able to bid on government contracts because their CEO is a felon.
There is going to be a lot of backroom dealing to do everything they can to prevent Elon from being charged.
- A lawsuit that is seeking class action status for anyone who was short at the time of his tweet.
- this is speculation, but it must have really strained his relationship with the board. I mean you can only fight so many battles at once, you'd think you'd want to have the board on your side
All to screw with the shorts, who really have no power what-so ever to hinder Telsa. If he had just not used twitter he and Tesla would be better off and the shorts would be worse off.
If Tesla wasn't burning through cash and didn't need an ever-inflating stock price in order to keep the house in order, the shorts would be powerless and in all honestly would back off. The only reason the shorts have power is that Tesla's future is currently heavily dependent on its stock price.
Tech stocks are infamously based largely on the second more than the first. Many do go reinvestment heavy like Amazon did for years before they started to post more profits.
Given the feedback loop impact things get weirdly circular in potential for success based upon others. Not in a something from nothing sense but in a giving what it takes to succeed sense.
Also even if destroying the shorts was a positive outcome for Must and Tesla how does that excuse his behaviour? Isn't that textbook market manipulation?
I suppose if everybody shorts at the same time the huge amount of stock being sold could drive the price momentarily down, but then again the opposite happens when the stock is re-bought. So in the end it should be effectively zero-sum? Or is it just that a huge amount of people started shorting the stock at the same time which made it a sort of self-fulfilling prophecy?
If there are few willing sellers out there when everybody goes to cover their short, you get a short squeeze - a feedback loop where the price increases, so people need to buy to cover shorts to avoid losses, which pushes the price up, which means more people need to buy to avoid further losses as the price rises and so on.
The original owner who lent the stock can also ask for it back on relatively short notice (say, because they are long and want to sell). Usually this isn't a problem because the short finds someone else to borrow from and uses that to cover - but if enough people do that then it can trigger a short squeeze even without significant price movement at the beginning, as happened rather dramatically in Porsche shares in 2008.
The vast majority of them aren't trying to do that, similar to how the vast majority of longs aren't trying to P&D.
> But I don't like the people that push false narratives and convince people of things that aren't related to reality.
I hope you see the irony in saying that: This is almost word-for-word what Tesla shorts accuse Tesla of.
Not on their own they don't. You can go and short Facebook right now and it won't move the price at all.
No single action in the stock market happens in a vacuum, and longs will absolutely react to what the shorts are doing. And a high short interest is often viewed as a contrarian indicator that dumb short money has piled into the stock and that its actually due for a pop. You often see that at bottoms in the stock.
In extremis, a falling/low price could limit the size of a potential new equity fundraising because the resulting dilution is too much for existing shareholders to take, but Tesla's price/valuation would appear to put it quite far from this being an issue.
But if you think of equity as having a value other than derived from the market, then 'expensive' might still have applicability here.
It's been a long time since I've used this though.
Elon has used those loans to finance a rather extravagant lifestyle. He own FIVE mansions in Bel Air, all right next to or near each other. He owns a $70,000,000 private jet, a top-of-the-line Gulstream G650 ER, and flies everywhere with it, burning immense amounts of fuel sometimes just commuting within Los Angeles (between Hawthorne and Van Nuys airports, for example). Because his unusual compensation arrangement at Tesla is contingent on the company's increasing market value or maybe someday turning a profit (which has never ever happened), these loans against his Tesla stock are his main bread-and-butter.
In other words, Tesla's fate as a company and its stock price are intimately tied to Elon's personal financial solvency. That's gotta create some conflicts of interest between his various jobs as CEO, head of the Board of Directors, and a person who doesn't want to be personally financially wiped out.
His lifestyle isn't the big problem, IMO. He's not Johnny Depp, he's way richer. That money most be going somewhere else...
OTOH, selling stock to redeem a pledge could be scrutinized for insider trading, and such a large amount could move the stock, so if I were loaning the money, I would require some large multiple of the loan in pledges -- enough so that I would expect not to have to call the pledge, because I know it will be a disaster if I do.
It's close to 13.775M, and growing. The worrying sign is that the company is losing tons of money at the same time. As the author of that article writes:
> So, Musk has steadily increased his personal leverage to a company that has been steadily increasing its financial leverage. That's a double whammy. It's too much financial engineering. In following other companies I have experienced situations in which a CEO faced margin calls as his company's share price dropped. It is not pretty, and obviously adds incremental selling pressure to an existing decline.
It just seems inevitable that the colliding forces of an overleveraged CEO running into an overleveraged company will create some kind of financial implosion.
How does this actually work? His stock is just his collateral for those loans, which can be transferred if he defaults on payments?
"Never ever" as in two profitable quarters? https://www.cnbc.com/2018/06/29/tesla-still-isnt-profitable-...
Maybe folks are skeptical about the fraudulent NHTSA complaints? If so, here's a source: https://electrek.co/2016/06/13/tesla-fale-complaints-suspens...
The answer is that a short sale is borrowing a share and then selling it, which increases the number of shares available for sale and by supply and demand reduces the price (until the short seller eventually buys back the stock to return it to the person they borrowed it from). In the meantime, which can be as long as the short seller is willing to pay interest, the stock trades lower because the extra share is on the market. It's essentially the same principle as the way banks lending money to people causes inflation because it increases the money supply and so lowers the value of the dollar.
Seeing a lot of existing shorts also tends to spook buyers, which also lowers the price, though it also attracts buyers hoping for a "short squeeze" that raises the price when the short sellers eventually have to buy back the stock.
I saw that other answers had already explained how shorts lower the stock price, but nobody had pointed out the other ways in which they "damage the company", as the original post put it.
So it's somewhat understandable that Musk doesn't look kindly on the short sellers - he would prefer that skeptics stay quiet and stop trying to ruin his company's valuation. You are correct, however, that acting in a deceiving manner to make the shorts lose money is not an acceptable retaliation.
Yes, as would any company. He went public. He should have known better. If he looking for unconditional love then the stock market is not the place.
I don't think Musk is a bad guy. Torn, tired and confused ATM but not a bad guy. Unconventional thinkers + doers always come with some baggage. It's part of the profile. However, in this case, he should have kept his mouth shut and channeled that energy into proving the nay-sayers wrong.
I can think of a political figure for whom this would be true, too.
Getting great updates about technologies in SpaceX, Tesla or Boring. He also answers questions of podcasters and journalists.
He is very open to fans who give him good press, but closes up, and dismisses boring questions from haters and non-believers and shorts.
Now, there is certainly a bit of a track record with a recent American presidents for this sort of thing. I'm not sure you want to double-down on that.
It's one thing not to make dumb mistakes that hurt your company but the end result of this outrage/apology tour culture we're developing and forever expanding the scope of is going to create a completely risk averse, milquetoast, and boring culture where honesty from public figures is rare and withheld as it was in the Victorian era.
I'm happy there are people like Musk who push back on this idea. He's still human, this is how he actually feels, and he has nothing left to prove to the world as a billionaire with multiple successful companies.
Plus measuring a private citizens communication to the same degree as a presidents is a bad idea. And it's like a good reason why Elon wants to take his company private as well.
I'm okay with having red lines but everyone seems so eager to make those red lines one step above corporate-speak filtered through a PR firm and a focus-group. At some point we need to push back on this and tell everyone to calm down, the world isn't ending because someone tweeted something you find (the key word here) mildly offensive.
The middle ground is that you shouldn't be so full of yourself, that when you make a technically stupid suggestion, and get called on it by an expert, your immediate reaction is making personal attacks against that person.
And then, instead of apologizing, doubling and tripling down on it.
The middle ground is that when the owners of your company ask you questions about your financials, you don't dismiss them as boring questions, and then take five fluff ones from some dude that makes gushing YouTube videos about you.
The middle ground is that you should generally behave honestly in public.
The middle ground is that you shouldn't fire people from your company for testing positive for THC, and then going on the air, and smoking pot.
These aren't some arcane, unwritten rules, that only slimy politicians and social contract lawyers understand. This is basic human decency.
> Plus measuring a private citizens communication to the same degree as a presidents is a bad idea. And it's like a good reason why Elon wants to take his company private as well.
If you're exhibiting a lot of selfish and narcissistic traits as a private person and CEO, you'll probably keep exhibiting them as a president. I don't think the amount of scrutiny you undergo in the latter job goes down.
If you're a major public figure, try to hold back on accusing someone who has just shown themselves to be pretty heroic by rescuing stuck children, a pedo.
Has anybody told musk this? He doesn't seem to act like it.
If so, they make money. If not and the price goes up a bit, some shorts are forced to buy at the higher price to limit their losses. That pushes the price up further, forcing more shorts to buy, etc., causing a "short squeeze" where the price rapidly shoots up very high, "destroying" a lot of shorts.
What you described is options trading, one method of which hedges against declines in stock price. Yeah, one could take a "short" position by buying puts, but it can be argued that a short position is not what puts were originally designed for. In contrast to short sellers who obviously intend for the price to go down, or they won't make any money.
I do question whether puts are the "more common way" given that they have an expiration. You can hold on to a short sell as long as you can pay the interest and the loaning party doesn't want their shares back.
[1] https://www.investopedia.com/terms/s/short.asp
The problem with stops is that you run the risk of the price gapping up or down and your stop getting filled at a much different price than expected.
[1] https://en.wikipedia.org/wiki/Turbo_(finance)
It does not take that long to open a trading account or you could have taken one of your friends help to execute this trade
Edit: This is the same reason Elon is now being sued for "Twibel". You cannot say state lies publicly without legal repercussions. "Funding secured" is classified as material non-public information.
I used to work in finance and regulatory compliance.
So, either way...
(Also I don't think they'll be profitable)
So what's your take?
Even if they manage, I fail to see why they should be priced much differently than GM, Ford, BMW, Mercedes, Toyota as far as long-term stock valuation goes. The "synergy" promised from SolarCity and Powerwall and so on doesn't seem to be a thing any longer.
Got out of the position at a bit under $310 so left a lot on the table but was happy. He literally handed people considering opening a short position on the stock a gift.
(Congrats on your successful trade!)
[0] https://www.buzzfeednews.com/article/ryanmac/cave-rescuer-su...
How does a man risking his life to save children halfway across the planet qualify as an opponent?
I hope his followers understand the precedent this sets. Are they truly about engineering solutions to tough problems (as they claim they are), or are they just a cult of personality cultivated to protect a thin-skinned master?
Elon Musk is business man. His actual occupation is organization, management, negotiation, finance and public relations.
Have you missed the multiple other shit storms here lately where he smoked a blunt on camera, said crap on Twitter he shouldn't be saying, cried in an interview while looking completely exhausted, etc?
He isn't exactly putting on a convincing performance as a trustworthy, stalwart, social conservative ("respectable business man") with all his ducks in a row.
If Musk is as good as a human as his devout fans think he is, he’ll put truth and his grand hopes for humanity over his ego, and give Unsworth — who let’s not forget, was essential to saving those boys’ lives — a proper apology and compensation.
He seems to care more about building personality cult around himself then about running business.
There are plenty of companies with toxic cultures, it is not like that would be unusual. But here, I just cant imagine people under Musk ever telling him he is wrong or telling him about problems. I would guess that his grasp of reality will be increasingly wrong. To a degree it is normal, of course, but here it seems to go really to extremes.
Electric cars will come with or without them.
The stereotype of white men going to Thailand for sex tourism isn’t proof. And to think it is evidence is incredibly ironic, because Unsworth, besides being the resident expert of the cave’s geography, reportedly had to push hard for Thai authorities to take his advice to bring in his British expert diver friends who ended up conducting the rescue.
As for the truth...we don't really know until there's discovery
EDIT: added the "per se" since regular defamation requires proof of damages but the per se form does not.
Personally I think Musk needs an intervention, something not right with him and he needs to chill out, detox or whatever for a few months.
If Musk offers a huge reward, you'll see Pattya Beach hotel and bar owners checking decades old security cassettes.
Right or wrong (the dude certainly seems not to be a pedo), Musk is the ceo of a currently near-failing company unable to produce and deliver cars as promised. And a defamation suit is what he's spending his time on? I'd be livid were I an employee.
The actual lawsuit is damning: https://www.documentcloud.org/documents/4895828-2018-09-17-C...
If he can't weasel his way out of this, I imagine he'll continue to spiral and lash-out... all this because he just can't shut up.
Is there any evidence that this was his intent? How do you know that he didn't actually intend to take the company private?
Reporters asked everyone and found 0 evidence.
PIF, the sovereign fund, stated that they had no intention to go beyond their initial 5% investment.
Last week they invested $1b in a Tesla rival, Lucid.
Musk is responsible for this because he actually rejected this deal, not because the Saudis were involved, but because it involved partnering with VW.
The problem during the crisis was that many of the things you listed weren't illegal because the laws and regulations that would have made them illegal had been rescinded in the years or decades prior. Thus, the CEOs got to keep their jobs and their bonuses and their freedom because even though what they were doing was highly immoral, it wasn't illegal.
A mean thing to do? Maybe. Or you could call it natural selection in some cases.
Going back to Tesla and Musk, I think his behaviour in the last couple of weeks, and all the information that surfaced since, probably just convinced every short seller out there that they are onto something.
EDIT: fixed some typos.
In my mind, all negative news about Tesla is now called into doubt as being news peddled by shorts. This is the challenge of declining journalism standards: all news now has someone with a vested interest behind it.
All of which is sad, Tesla really had and still has some appeal to it. I don't think that appeal in itself is enough for a public company.
And by the way, not all negative reporting is automatically bad journalism or even fake news.
Not going anywhere. Even if Tesla goes to zero, Musk still is a billionaire, 10 times over with SpaceX. https://en.wikipedia.org/wiki/SpaceX#Ownership,_funding_and_...
It's not greed, he just hates that some don't bow to him.
Recent Paul Manafort case shows it doesn't do what its intent to do. Jury was not interested in Manafort luxury lifestyle and judge himself outright ban prosecutors from bringing it up again and again. Unless you believe they can prove Musk bought $2B worth of business suits.
Its not that big of a deal - other execs at SpaceX recently came and say company run great and they are mostly in charge anyways.
> There is going to be a lot of backroom dealing to do everything they can to prevent Elon from being charged.
Are you saying there are bribes or something? Can you please clarify?
Its not about trying to destroy or support the shorts its about having an effect on the stock price at all. Its some insider type stuff. He cant do that. The reason we like Musk so much is the same reason hes "failing". Hes not the typical CEO and he really doesnt want to be. I dont think he like being the boss, I think he rather build the cool stuff.
I think the money went to his head he is realizing that there is another tier to being rich and powerful that he still needs to climb in order to support the projects that drive his ambition.
In the US.
I'm sure there are a lot of countries that would be more than happy to invite such a hardworking, ambitious and industrious man to set up company like SpaceX in their countries.
If you make these sort of things impossible in your country, they will just happen else where.
There is no call for a criminal probe her.
In all seriousness, no idea what Elon was thinking with that Tweet.
Gut says, long term Tesla will be fine and little will to come of this investigation.
Or this could be their DeLorean moment. People's guts are notoriously bad at predicting the future.
> On October 19, 1982, DeLorean was charged by the U.S. government with trafficking cocaine following a videotaped sting operation in which he was recorded by undercover federal agents agreeing to bankroll a cocaine smuggling operation. The FBI set him up with more than 59 pounds (27 kg) of cocaine (worth about US$6.5 million) in a hotel near Los Angeles International Airport after arriving from New York, and the Federal Bureau of Investigation stated DeLorean was the "financier" to help the financially declining company in a scheme to sell 220 lb (100 kg), with an estimated value of US$24 million.
https://en.wikipedia.org/wiki/DeLorean_Motor_Company#Downtur...
If Tesla goes down because of this there will be a striking similarity.
the forward guidance is gonna suuuuuck
"The risk factors have been updated to include that our CEO is going to be arrested, the remaining executive is running for the hills with substantial severance packages and we will expend many resources to maintain confidence and acquire a new executive team"
I only recently got back on twitter. I do not use my likeness or use it for any other reason except to find out about things I consume(stand up comedy, concerts, etc). Twitter is a great platform for that. Its an awful platform for speaking your mind when you run a company(or the country)
I cannot explain myself in only a few hundred characters, especially when people dont click links, or only see a small portion of the situation.
I did learn my lesson in my 20s.
"We're using our sovereign power and military force the right way. The others are doing it wrong, and we wish they'd go away."
Same old story. In one of Raymond Smullyan's books, there was a story of a word the US codebreakers in WWII couldn't quite translate. In the end, they settled on "pro-Japanese" as a shaky translation. Years later, a retired codebreaker is talking to a retired Japanese soldier, and is told that the code term meant, "sincere."
Oh come on.
He doesn’t come across as caring too much about anything except his ego.
It turned out Tesla wasn't killed by not being able to make the model 3 at all, it wasn't on being able to make the model s in larger volumes, it wasn't because there was no demand, that there would be no demand after various incentives around the world went down (still some left in the us, also available to all other car companies by the way), it wasn't because they couldn't make the model 3 in volume, it wasn't because they'd all catch on fire and burn up in accidents, it wasn't because the over-promised-over-named autopilot was dangerous and would kill people, it wasn't because the leaf, the volt, the bolt, the i3, the i8, and continually forthcoming cars from audi, porsche, ford, mercedes, bmw killed them. It wasn't because there was a secret sec investigation was preventing them from refinancing, it wasn't because they have just lied all this time about selling the cars for less than manufacturing cost (separate from their enormous money spent on infrastructure), it wasn't because the batteries would run down and not survive heat, cold, regular driving, daily driving, supercharging.
It was damn stupid for him to make that twitter comment.
Meanwhile, the last several years of warnings about climate change have been shown to be a true warning. My mother had to evacuate from a fire. A friend has had their city flooded. A different friends home was damaged by a hurricane. I've been begged on the street for a drink during a heat wave.
You don't see eco-activist shorting ExxonMobil. Reasons simple: there is no reason to believe that ExxonMobil will go belly-up. Meanwhile, there are a lot of indicators that tesla could fall apart.
Just ask yourself: Is the tesla stock massively inflated or are there some anti-tesla illuminites who banded together to sabotage tesla with millions of risk capital just for the lulz?
At best, they settle with Musk for some financial penalty.
I was musing the other day that Elon Musk may be planning to run for president. Why? Well, if there's one thing that 2016 showed us, it's that the road to the White House runs through snubbing Wall Street, calling the press a bunch of boring liars, accusing your opponents of pedophilia, making bizarre incoherent tweet storms in the middle of the night, and bragging about the size of your rocket.
That said, although legal scholars can have how many angels can dance on the head of a pin debates about this, the most reasonable interpretation is probably that they're US citizens/eligible for US citizenship from birth. If push ever came to shove on this question, one would hope the courts would side with the most liberal interpretation.
"The candidate is a natural born citizen by virtue of being born in Canada to his mother who was a U.S. citizen at the time of his birth."
Place of birth does not matter for the House or Senate. Only need to be a US citizen.
For the President it's a "higher standard" you must be a native born Citizen.
Which isn't 100% defined and legal scholars can and do argue the edge cases based on lots of things including very old British common law antecedents. The consensus seems to equal citizen from birth although some disagree.
"No Person except a natural born Citizen ... shall be eligible to the Office of President"
Natural born means "citizen at birth", not "born in the US"> One can also be a citizen at birth (under certain circumstances) by having parent(s) who are U.S. citizens. Ted Cruz unequivocably meets this standard.
[0] https://en.wikipedia.org/wiki/Article_Two_of_the_United_Stat...
I have no idea why you're talking about IVF children, they aren't legally different from naturally conceived children.
IVF is irrelevant if the biological parents are known and in a relationship, or if the birth is inside the U.S. In particular you cannot gain citizenship through donated sperm, though.
For example, regarding Ted Cruz:
> Two November 2015 ballot challenges in New Hampshire alleging that Cruz was not a natural-born citizen were unsuccessful. In December, a similar lawsuit was filed in Vermont, and an unsuccessful lawsuit was filed in Florida. In January 2016, similar lawsuits were unsuccessfully filed in Texas and Utah, and two similar unsuccessful ballot challenges were filed in Illinois. In February, two similar unsuccessful lawsuits were filed in Pennsylvania and one was filed in Arkansas; a similar lawsuit was filed in Alabama; similar unsuccessful ballot challenges were filed in Indiana; and similar ballot challenges and an unsuccessful similar lawsuit were also filed in New York. In March, a similar lawsuit was filed in New York. In April, a similar ballot challenge was unsuccessfully filed in New Jersey.
> No lawsuit or challenge has been successful, and in February 2016, the Illinois Board of Elections ruled in Cruz's favor, stating, "The candidate is a natural born citizen by virtue of being born in Canada to his mother who was a U.S. citizen at the time of his birth."
https://en.wikipedia.org/wiki/Natural-born-citizen_clause#Te...
It should be noted that a common aspect to practically all US presidential candidates is that they all dumb down their communication style when running election campaigns, as that's a key aspect of all winning candidacies.
uninvited space rocks == bad
Personally, I think I would be much more confident in Tesla, and much more likely to buy a Tesla product, if he were not in charge.
Have to wonder if Toyota still have the keys to the NUMMI plant.
All of those companies - and the entire industry - are investing heavily in their own electric cars; some already have announced dates when they will stop production of gas engines IIRC. Depending on the price, of course, I imagine they'd love to add Tesla's prestige, patents, and maybe their talent.
My uneducated guess is that's how Tesla will end, a division of a major car-maker. When did GM last add a new brand? Imagine the bidding.
Toyota might be better at building profitable cars, but Tesla is better at building profitable EVs.
Have you actually looked at the production numbers of those other EVs? Because there is nobody outside of Tesla that has mass produced EV and even more imprtantly, to do it with profit mergin per car.
Teslas are the Top 3 most sold EVs in the US market. The model 3 is by now equaling the sum of all other EVs and is almost 100% of the growth in EVs.
Futhermore, the iPace, i3, Tycan and many others saw production delays as well. So the idea that you can let some established company do it and they will do way better then Tesla has jet to be shown.to be true.
The original Tesla Killer, the Bolt, is outsold by Tesla 15 to 1.
Competitors have announced many EVs but most will hit the market around 2020 and most of them will not produce near as many as the Model 3.
What's clear is that we know Tesla has had (and may continue to have) issues with production. Meanwhile I can't find anything suggesting there were any production issues with the Chevy Bolt or Volt or Nissan Leaf, the other models I'm familiar with. I'm not familiar with any of "iPace, i3, Tycan" so I don't know what to look up there to see if there were comparable issues with them.
Guess why you don't know about them, because they don't sell well or are delayed.
Tesla will always have production issue because they are always trying to grow. Every large company has production issues. The question is how much product can you produce at what price.
Äh, yes, Elon has made Tesla successful and he made it into a major car company that is still growth strongly.
If Elon is doing things that are illegal or otherwise just boneheaded now, how much leeway does he get? What would it take to make you decide he shouldn't be CEO?
I dont think anybody can argue that he was not succcessful.
Why does "big" == successful? I'm not saying money is the only thing we should ever optimize for, but I'm skeptical that growth is a viable alternative.
Edit: I've edited the first paragraph substantially because I did not accurately understand SpaceX's profitability vs Tesla's.
Their president says they are profitable, and they've claimed that several times over the last few years.[1] However, an expose from the WSJ from 2015 indicated they were quite the opposite then.[2] The Motley Fool suggested in 2017 that SpaceX might be on its way to profitability, but it was still unclear whether they really were or not.[3]
So what I should say is that Tesla is not profitable, and that SpaceX claims profitability, but that the claim is questionable. I'll update my post.
[1] http://www.latimes.com/business/la-fi-spacex-shotwell-201805... [2] https://www.wsj.com/articles/exclusive-peek-at-spacex-data-s... [3] https://www.fool.com/investing/2017/11/11/will-spacex-earn-a...
I mean, Tesla could be profitable if they didn't fund massive amounts of expansion.
> Why does "big" == successful? I'm not saying money is the only thing we should ever optimize for, but I'm skeptical that growth is a viable alternative.
They are optimizing for money. They want more revenue, not more profit.
The question is not if the company is profitable, but rather if each product individually can be profitable.
The Apple model was to fire their impetuous founder, decline slowly into mediocrity, bring back the founder, and then achieve historic levels of success. Perhaps Musk needs a Jobs-like break?
> until the IPhone was really established (not to mention the IPod.) Only then should you bring in a guy like Cook
If Jobs was healthy, he'd still be running Apple. And maybe they would have done something visionary since the iPad.
I believe very much in the missions that Tesla and SpaceX romanticize, but I cannot reconcile those with Musk's public behavior. Calling people pedophiles on the internet, trying to suppress unionization efforts, and seemingly lying about going private entirely on a whim does not pass ethical muster for me.
I get it's a hypothetical and we're just navel gazing, but to even think our answers would be even remotely valid feels fairly arrogant.
Seems like if you get into competition with the auto industry or threaten the oil industry by attempting to change consumer behavior then you become a massive target. I actually feel like forces other than public opinion are at work here.
The regular auto industry is likely to crush Tesla within a few years, regardless of how successful they are with the Model 3. They don't need to take shots at the CEO to achieve that, they're going to do it through bringing their own competing products to market and leveraging their own hard-won experience building shitloads of cars.
"Private Empire pulls back the curtain, tracking the corporation’s recent history and its central role on the world stage. The action spans the globe, moving from Moscow, to impoverished African capitals, Indonesia, and elsewhere in heart-stopping scenes that feature kidnapping cases, civil wars, and high-stakes struggles at the Kremlin."
Big cooperations could easily find a way to run a "blackops" negative PR campaign, on top of pulling strings in the SEC
Who knows what kinds of bugs they'll find when they turn over some rocks?
I feel like people have some sort of messiah complex. Where companies become religions each with their own set of rituals, like waiting for 10 weeks in the street and inquisitions denouncing critics as hereticals ("shorts", "android-shills", etc.)
Finding out whether people try to replace their philosophical hole left by a lack of believe or being dissatisfied with materialistic world-views is the cause of this "technoreligions" in the 21st century could make for a nice dissertation.
Tesla might be better off without Musk. It's past the stage where it needs a visionary. Now it needs someone who can run a big auto manufacturer.
It would be interesting to see how sentiment like that shaped the ebb and flow of Hacker News.