Musk continues to make very, very poor decisions, over this last year. If his decision-making for things like this are so poor, I can only imagine how poor his decisions are behind the scenes for things concerning Tesla itself.
I wonder what happened. My guess is that he must be on some sort of medication due to his battle with the Model 3. The tweet in question was inexplicable and I was very tempted to short the stock when I heard, but I didn’t want to bet against Musk. Now he seems mentally so fragile and his ability to lead Tesla is seriously in doubt.
The "who wears short shorts" music video he linked is where I started to think the shorts were really getting to him. In his defense there was a lot of negative spin likely originating from his short sellers, who had the largest short position of any stock I think.
Most companies CEOs are really careful and always act like nothing is wrong even as the ship sinks. In interviews Musk was refusing to answer certain questions from reporters accusing them of being from his short sellers, it all makes me wonder if the financials aren't so rosy.
How is it spin? The metrics for Tesla were/are not promising and they were already being looked at by the sec for potential fraud regarding those metrics
It becomes spin when several stories are floated in order to erode confidence in the company. Musk's accusations were that much of the negative press was coming from shorts or competitive rivals, wether that be energy companies or car companies. The truth for me lies in between.
Rumor is that he's been on a stimulants / sleep aids cycle working ludicrous hours. You can only sustain that for so long before your brain throws a rod and starts banging and chugging and emitting a lot of smoke.
There are tweets in support of this, like him talking about Ambien.
I admire Elon a lot, and I hope he takes a break and gets his head sorted. When I first heard about the tweets causing the SEC to sue I speculated to my wife that his subconscious mind had engineered this event to force him to take a break as some kind of mental self-preservation circuit breaker.
Rosanne blamed Ambien, and I wouldn’t be surprised if more public figures do. It’s a convenient scapegoat that doesn’t injure their reputation like admitting hard drug use or alcohol abuse would.
Musk couldn’t have been thinking straight when he sent that tweet, but we’ll likely never know the real story. I think that’s OK, he’s entitled to some personal privacy too.
I’m not sure medication needs to be involved. I don’t care how superhuman you might think you are, if you work 100+ hour weeks for that long, it’s going to mess with your mental state.
I'm not sure what kind of work and what countries specifically you are referring to, but my guess is that you're talking about a physical work, which is not comparable to mental work, that dominates Elon's day. It's not like he's making decisions 14 hours in a row. He's jumping between companies and various meetings. He eats. He drinks coffee. It all deducts. If you meant something else, feel free to clarify.
Come on... The fault here is with Musk and Tesla. Why should investors be allowed to sue regulating bodies because the bad behavior of their companies results in a loss for them?
By now, the SEC has already investigated this throughly. They’ve interviewed relevant witnesses, reviewed relevant documents, etc. The case is straightforward (the tweet is public record, interviews would quickly reveal there was no deal in the works). So the SEC has what it needs; the case will turn on Musk’s defenses. Since the ball is in his court, there is no reason for the SEC not to move forward quickly.
Musk has explicitly admitted that the "funding secured" was actually based on conversations with the Saudi sovereign fund, which appear to have been at a stage where they were still negotiating conditions (such as building a Tesla plant in Saudi Arabia). All the SEC has to do is show that the conversations with the Saudi fund did not constitute a verbal agreement to any reasonable observer (which means, were Musk to believe that he had a verbal agreement, he was being reckless in that belief).
This isn't a case where someone committed a crime and carefully tried to hide their actions; this isn't a case that hinges on misunderstandings of the law. It is a case where someone essentially said "this is a final decision" and later clarified "by final, I really meant this was in preliminary stages, but I'm confident it can be finalized quickly."
Based on the details, it seems like there was basically zero substantive discussions behind his tweet, so no need for a deep investigation if everyone you call says "yeah he had nothing".
> Musk reportedly refused to sign the deal because he felt that by settling he would not be truthful to himself, and he wouldn't have been able to live with the idea that he agreed to accept a settlement and any blemish associated with that, the sources said.
What is he even thinking here? The evidence seems pretty clear that he did not have funding or investors secured at the time of the $420 tweet — judging by the unprepared and panicked reaction of his investors and executives an hour afterwards. Is Musk claiming that he truly did have funding secured despite all external evidence to the contrary?
I really hope this won’t also be his mentality for fighting the libel suit.
He seems pretty unstable recently, and this seems like another instance of that instability. If he was acting thoughtfully, he would not be in this situation in the first place, so his behavior seems consistently irrational, at least.
Unstable? Do you have any idea of the history of Elon Musk and his companies? Obviously you don't, and obviously you are talking out of your rear. You should read up about Tesla and SpaceX in 2008 if you want to learn about the conditions that might make a man unstable. Posts like these make HN readers look like vapid, patronizing high-schoolers.
Oh I don't think he was unstable or anything, he did that (I believe) knowing full well what the results and potential consequences would be.
Results: Stocks jump upwards, hopefully enough to hurt the short sellers and make them back off. The short sellers have / had been paying heavily to portray Tesla negatively in the news, just look at the coverage that one accident with a Tesla on autopilot through a construction zone had, or the coverage Tesla gets when there's a fire (while a thousand gas powered cars go up in flames during the media outburst).
Potential consequences: SEC on his ass. I don't think it'll end well for him. If he's lucky he just gets a big fine and gets to keep helming Tesla and SpaceX. This settlement was probably the best deal for him (financially) and only a fraction of the money gained / lost on the stock market from his tweet. But it would mean he had to step down for two years - possibly the two most critical years in Tesla's history.
IMO he shouldn't have published that, that was a bad call.
> Funding was secured in the sense that the potential buyer had the funds
Refusing the settlement was stupid. Not only is he likely to lose, almost any defense will rely on him showing he didn't understand the words "funding secured" which will then open Tesla up to shareholder lawsuits.
Definitely stupid. I want to know what his lawyers think of this. Surely they would have impressed on him the odds of success if it went to trial. How long will SEC case take?
>Funding was secured in the sense that the potential buyer had the funds.
If you're blind to this whole story, I suppose you could believe that. Who was the "potential buyer"? We heard VW and the Saudi fund, both who said it was nonsense.
Beyond that, according to the complaint, nothing was discussed with the board and there was no possibility that small shareholders could remain (or institutional investors for that matter) if Tesla went private. There was no discussed price. Musk wanted to "burn the shorts"; he was trying to do so for months. Whoops.
And have you considered that this is only just beginning? I mean, it's not impossible that this blows over, but it's also possible -- with a DOJ investigation ongoing-- that this whole thing implodes. The world is tiring of the games Silicon Valley plays.
Musk was talking about the Saudis - they were the ones who showed interest. The saudis had the money for whatever. It was upto to Musk/Tesla to make it happen.
I definitely think he should have taken the deal. The tweet was reckless.
This seems like it's an essentially universal constant for Musk, whether he settles or not. Being in the news is not difficult for him, so it hardly seems likely that this was an important variable in the decision. Nor does it seem like the decision will affect his ability to get in the news.
My point is more for Tesla being in the news than Musk. If the two are split an uninteresting, board appointed CEO will need a different marketing strategy as Musk will likely take the soap opera effect with him.
>Musk has long raged in private at perceived enemies, especially in the media. His short temper and outbursts have long been legend inside Tesla and SpaceX headquarters, according to multiple current and former employees. “It doesn’t strike me as some drastic change in his personality,” said one former employee. “The people who are saying this is how he's always been are correct,” said another.
>What’s changed is simply that Musk’s profile has risen while his staff’s ability to keep him in check has waned.
The protection of sources, sometimes also referred to as the confidentiality of sources or in the U.S. as the reporter's privilege, is a right accorded to journalists under the laws of many countries, as well as under international law. It prohibits authorities, including the courts, from compelling a journalist to reveal the identity of an anonymous source for a story. The right is based on a recognition that without a strong guarantee of anonymity, many would be deterred from coming forward and sharing information of public interests with journalists. As a result, problems such as corruption or crime might go undetected and unchallenged, to the ultimate detriment of society as a whole.
I'm not talking about protection of sources. I completely agree with that principle. But that's not at all what I'm talking about here. If you get information from a source who wants to remain anonymous then, if it's a leaked document you can publish it. If it's verbal information then you can follow it as a lead to find concrete information to publish. But just publishing supposed testimonials from 'protected sources' is bullshit. We have no way of knowing if those testimonials are true or just made up. So it should be ignored and that journalist should also be scorned. It's nothing but gossip.
So sorry, you don't appear to understand the difference between using protected sources to acquire real information that can be published (documents or other evidence) and just publishing gossip and scuttlebutt.
It's not like Musk's archetypal narcissistic behavior is unobservable beyond the scope of this Buzzfeed report. As someone who reads the tech news, I can't remember the last time I got through a 24 hour news cycle without having to hear about Elon Musk, and the conventionally hagiographic coverage he receives. So I've gotten to know him way better than I than I ever wanted to. As someone who knows someone in his personal life who is at the far end of the NPD spectrum, it's pretty easy to spot the traits in Musk.
I was looking at the TSLA chart over the past year today and noticing the relatively high volatility. I strongly suspect that the volatility is a big part of what attracts the short sellers. In which case any plan to harm short sellers has now utterly backfired, as having this case hanging over the company can only increase uncertainty and volatility, probably for months or even years to come.
Musk's argument is he thought he had a deal with Yasir Al Rumayyan, the managing director of the Saudi Public Investment Fund. From the nyt article:
>Mr. Rumayyan raised the idea of taking Tesla private and increasing the Saudi fund’s stake in it.
>More than a year later, the lawyers said, Mr. Musk and Mr. Rumayyan met at the Tesla factory on July 31. When Mr. Rumayyan spoke again of taking the company private, Mr. Musk asked him whether anyone else at the fund needed to approve of such a significant deal. Mr. Rumayyan said no, according to the person familiar with the letters.
I guess if Rumayyan testifies that he said he offered a deal then Musk may be ok. [Edit] Or maybe not.
> Under the terms of the deal, Musk and Tesla would have had to pay a nominal fine, and he would not have had to admit any guilt. However, the settlement would have barred Musk as chairman for two years and would require Tesla to appoint two new independent directors, reported CNBC's David Faber, citing sources.
I don't think the fine was a problem here for Musk.
I think it'd be a huge win for short term Tesla investors and Tesla, but not long term investors. Tesla's financials should be pushed as hard as possible to enable scaling rapidly (every dollar not needed in opex should be going to capex or r&d).
Independent directors (in my opinion) would prioritize saving Tesla as an ongoing concern, even if it meant they remained a small boutique manufacturer (vs growing into an energy storage powerhouse).
TL;DR I want Captain Ahab at the helm, chasing his White Whale, swinging for the fences. I don't want Bob Lutz or Lee Iacocca.
Morality is shades of gray. Nobody died, and I have yet to see the damages done by his statements quantified. You and I want different values in leaders, and that's okay.
No, but "I was high and tweeted some nonsense" shouldn't be a standard either.
I'm not saying Musk should get off scot-free, but it'll be sad to see Tesla suffer, when companies like e.g. Uber or Equifax, for which dishonesty and negligence is standard operating practice, continue to function with no consequences. But then, I guess the universe isn't fair.
What about the people that would benefit from Tesla's stocks dropping and did a big media push to highlight Tesla cars' shortcomings? It's not normal for a car accident to be in the media for weeks afterwards.
Why do you think there is some grand conspiracy? Media attention works both ways. TSLA/Musk forced themselves into popular culture and they have benefitted greatly (a completely disconnected from reality stock price that has allowed them to raise an enormous amount of debt) from that free media attention. But, it also means increased scrutiny. It is a similar situation with Apple and iPhones. If the Pixel has some bug, you might see a blip on an Android fan site. If the iPhone has a bug it makes headlines for days.
Tesla's board has 9 directors. Barring Musk from the chairmanship doesn't preclude putting a loyalist in to replace him. I don't see how 2/9 non-chairman directors being independent creates a drastic about-face in company policy.
>I think it'd be a huge win for short term Tesla investors and Tesla, but not long term investors.
I'd say the opposite. Kicking out Musk will kill the stock price as the cult members sell, but in the long run Tesla might be better off being run by someone boring, as opposed to an unstable CEO who divides his attention a million ways and seems hell-bent on self-destructing via twitter. Over 40 executives have left this year and the latest CFO quit after a month on the job. For Tesla to become a solid company, that has to stop.
The optimal case would be Musk gets some sleep, talks to a therapist, and takes his ego down a notch. Then he could go back to spreading a vision instead of trying to harm people with flagrant lies. Unfortunately, the window of opportunity for this may have already closed.
Ok, when has it ever been a good idea to piss off the SEC? They offer you a deal, let you off rather easy in exchnage for some symbolic concessions after you did something not to smart resulting in some unwanted stock movements. And then you tunr your back on that deal, and the SEC. What exactly do you expect will happen afterwards?
Musk has hired white collar attorney and former Southern District AUSA Chris Clark of Latham & Watkins (who successfully defended Cuban against the SEC).
idk, a part of me wished he had dirt on some of these short trading firms, Greenlight Capital, etc. Short sellers do seem to have uncanny timing for playing press releases, especially when they are false. Lots of manipulation, especially in crypto, causing enormous losses. However, rarely do I see the SEC go after these guys. I would like the SEC to go after both, not just Musk, if it does turn out he defrauded investors. I admit, I want to see Tesla succeed, but not at the expense of HODLers, owners, and tech enthusiast. Musk doesn't need to be at the helm of Tesla for it to succeed. We just need somebody in there that can stabilize the excessive spending and research, start reducing the debt incurred. If Tesla can ever shed the debt, they wont have to worry about short sellers and the TSLA share price.
What would they go after the short sellers for? Shorting incentivises bubble popping and private antifraud research. I can't think of a single time short sellers trashed a healthy company, yet I can think of several times short sellers pricked something foul before it got too far along.
Almost every year, I end up owing a lot of income taxes; a calculation that I always tend to mess up in order to gain a bit of advantage with the tax laws.
I usually just pay the tax bill, and move on. I'd love to be true to myself, too. But sometimes it just doesn't work. You mess up, you admit it, and no one is mad anymore.
I'm not arguing Musk's tweet wasn't ill advised, but this seems to say a lot about how fragile our system is if 140 poorly thought out characters can cause so much damage. What about the fiduciary duty of all those investors who changed their positions based on this information? If you are putting millions of dollars at risk based on a cryptic tweet, you are failing at your job as much as Musk failed at his, and you don't deserve to be protected by the SEC.
One of the SEC's core jobs is to protect investors from corporate officers who lie to them about the state of the public companies that they are running. This is precisely what Elon Musk did.
There was a huge investigation of Enron by the SEC. Among other things, CEO Jeffrey Skilling was barred from ever again serving as an officer of a public company.
He also spent ~12 years in prison (Though that was a separate action. The SEC can't send people to prison).
> If you are putting millions of dollars at risk based on a cryptic tweet, you are failing at your job as much as Musk failed at his
The SEC lets companies make corporate announcements on social media. If a company says "I was just acquired for $900 a share," I would consider that material information worth trading on. If a company says "funding secured," which has a very precise and technical meaning in corporate finance, in a corporate announcement, I would consider that to be similarly material.
Our capital markets won't work if straightforward misstatements in corporate announcements are permitted.
Nobody forced Tesla to file an SEC form 8K, officially designating his Twitter account as an official source of material information on Tesla for investors. But once that was done, yes, every character out of that account must be 100% truthful and complete. Because it has been affirmatively stated to be truthful material information.
I'm glad that this article has hot takes from two random investors! One says Elon has a 25% chance of staying CEO, the other says that Tesla won't be able to raise capital with this bad news. Sweet, now I have my talking points to regurgitate to my friends & can stop thinking. Thank you CNBC and modern media.
Maybe a dumb question, if it takes years, and in that time tesla becomes profitable enough that Elon takes it private, could he escape some of the penalties that way?
Like, did he realize that since the trial will take so long that by the time it is done, he will be able to circumvent some of the harsher penalties?
No, the penalty is being permanently barred from being an officer or director of any public company. If he goes to trial, there isn't going to be any middle ground.
But would that impact him if he were to take Tesla private before being barred (as in this hypothetical, he wouldn't be an officer or director of a public company, just of a private one)?
In the United States one has a right to a speedy trial in criminal cases. No such right exists for civil cases like this one.
> In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense.
You heard it here first, folks. Kick out the visionary who has started three billion-dollar companies, and bring in some neutered CEO who is fluent in corporate-speak to take over operations. Surely, this is the correct decision - These men like Elon are too unstable to run the companies that they have spent their entire lives creating! Thanks, ckastner.
Yeah, he absolutely did start PayPal which came out of merger between X.com (the company he founded) and Confinity (the company Peter and Max founded).
Indeed, this is important to remember - he actively rewrites history to make it seem he founded Tesla, he even bought out the actual founder(s) of Tesla (Martin Eberhard and Marc Tarpenning) so they wouldn't keep bugging people about the fact he / they founded it.
That wasn't what the SEC proposed in their no-guilt settlement. It was Elon giving up the Chairmanship and appointing two independent directors. That isn't crazy. It wasn't dethroning the king. It was adding sensible checks to a situation that screams for them.
That offer was rejected. The SEC's response is to hem to the statutory punishment for public, material misstatements in a corporate announcement by senior officers.
I don't think your sarcasm and over reading into ckastner's post is justified, at least not based on that post at all. I remain very appreciative of Elon Musk, and unlike what seems to be the current common thinking I've come to think it's not actually possible to separate out the daring and visionary part of people like him from the "less desirable" parts, though they can be moderated. I think it all tends to go together, and furthermore that the results do in fact largely justify the means.
However, the settlement doesn't sound like a "Kick Out" so much as a 2-year semi-hiatus. I see no reason why it couldn't be agreed ahead of time that he'd be right back in the saddle afterwards, he's remain a major shareholder, and could give his views known even if he had no actual executive power. Two years isn't nothing but it's also frankly just not that long, Tesla at this point shouldn't implode without him for such a short period, in fact it shouldn't even mess up the vision thing either, they've got plenty of very good challenging long term gigantic market stuff to execute on for a few years, hell for five years. It's only longer term that the innovation would become more of an issue.
If anything I really think a forced few years of stepping back from the day-to-day hustle might really do him so genuine good, and it'd have to be forced because that personality type can never stop on their own. Steve Jobs, with a much longer forced outing for real, came back and vastly stronger leader, still with plenty of drive and acerbicness but some of the most impulsive rough edges sanded down a bit as well. From the sound of it under the settlement Elon would merely be on a 2 year break freed from the daily stress and could have a guaranteed return, so free to really work on the vision and plans to bring back with him. Or just go hike and travel a bit and destress a little? That could help too. He's not an old man obviously, he has lots of time, and with no formal legal admission of guilt the long term consequences should be minimal. Plenty of people recognize his accomplishments and wouldn't mind writing off a lot of his current behavior after a brief time.
Maybe doubling down here is itself also an unavoidable part of his personality, and anyone who has dealt with startups much has probably seen plenty of maverick founders who are incredible founders but can't transition as well to different life-stages of a business. It doesn't make them bad, it's just another set of strengths and weaknesses. But I think it's also a genuine blunder which is kind of sad. The SEC is a scary opponent, and here it looks like they really didn't want to bring down the hammer, they offered a disciplining for a genuine fuckup on his part that CEOs just cannot do, never have. And the potential penalties for actual conviction are severe, including not just prison but possibly lifetime bans from C-positions in the related area of business, and Elon would not be able to just wave that away.
> However, the settlement doesn't sound like a "Kick Out" so much as a 2-year semi-hiatus.
Exactly. During that time, let two competent replacements get Tesla back into shape. Get help, then come back if you really must. How is that not a win.
I am a huge fan of Musk, but I hate to say that I can see the SEC's side. In corporte finance, which is what the SEC is responsible for regulating, the phrase "funding secured" has a precise meaning, and the situation Musk described did not come close to meeting it.
Musk may not have been trying to manipulate the stock price when he said funding was secured, but if he was allowed to speak in such a sloppy, misleading manner, then other CEO's would start doing too too, which would have very bad consequences. So the SEC has to come down on Musk as hard as it can, and it has great powers for doing this.
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[ 3.3 ms ] story [ 166 ms ] threadI wonder what happened. My guess is that he must be on some sort of medication due to his battle with the Model 3. The tweet in question was inexplicable and I was very tempted to short the stock when I heard, but I didn’t want to bet against Musk. Now he seems mentally so fragile and his ability to lead Tesla is seriously in doubt.
Most companies CEOs are really careful and always act like nothing is wrong even as the ship sinks. In interviews Musk was refusing to answer certain questions from reporters accusing them of being from his short sellers, it all makes me wonder if the financials aren't so rosy.
There are tweets in support of this, like him talking about Ambien.
https://www.cnet.com/news/elon-musks-strange-strange-ambien-...
Ambien is known to produce some weird states of mind. I used it briefly and can attest to this, though I never got a visit from the walrus:
https://ambien.blogspot.com/2010/12/ambien-walrus-collection...
I admire Elon a lot, and I hope he takes a break and gets his head sorted. When I first heard about the tweets causing the SEC to sue I speculated to my wife that his subconscious mind had engineered this event to force him to take a break as some kind of mental self-preservation circuit breaker.
Musk couldn’t have been thinking straight when he sent that tweet, but we’ll likely never know the real story. I think that’s OK, he’s entitled to some personal privacy too.
Or did he get a winfall on Paypal and now throws a bunch of money at talented engineers?
I remind myself smart engineers might not be talented leaders.
You will be surprised how many people in developing and under-developed countries put in that kind of effort without breaking a sweat.
40 hour work weeks are the luxury of developed first world countries.
This isn't a case where someone committed a crime and carefully tried to hide their actions; this isn't a case that hinges on misunderstandings of the law. It is a case where someone essentially said "this is a final decision" and later clarified "by final, I really meant this was in preliminary stages, but I'm confident it can be finalized quickly."
That's a lot of ambiguity for the average layperson on a jury. I assume the SEC has a strong case, but this stuff is nuanced.
What is he even thinking here? The evidence seems pretty clear that he did not have funding or investors secured at the time of the $420 tweet — judging by the unprepared and panicked reaction of his investors and executives an hour afterwards. Is Musk claiming that he truly did have funding secured despite all external evidence to the contrary?
I really hope this won’t also be his mentality for fighting the libel suit.
Results: Stocks jump upwards, hopefully enough to hurt the short sellers and make them back off. The short sellers have / had been paying heavily to portray Tesla negatively in the news, just look at the coverage that one accident with a Tesla on autopilot through a construction zone had, or the coverage Tesla gets when there's a fire (while a thousand gas powered cars go up in flames during the media outburst).
Potential consequences: SEC on his ass. I don't think it'll end well for him. If he's lucky he just gets a big fine and gets to keep helming Tesla and SpaceX. This settlement was probably the best deal for him (financially) and only a fraction of the money gained / lost on the stock market from his tweet. But it would mean he had to step down for two years - possibly the two most critical years in Tesla's history.
IMO he shouldn't have published that, that was a bad call.
Refusing the settlement was stupid. Not only is he likely to lose, almost any defense will rely on him showing he didn't understand the words "funding secured" which will then open Tesla up to shareholder lawsuits.
If you're blind to this whole story, I suppose you could believe that. Who was the "potential buyer"? We heard VW and the Saudi fund, both who said it was nonsense.
Beyond that, according to the complaint, nothing was discussed with the board and there was no possibility that small shareholders could remain (or institutional investors for that matter) if Tesla went private. There was no discussed price. Musk wanted to "burn the shorts"; he was trying to do so for months. Whoops.
And have you considered that this is only just beginning? I mean, it's not impossible that this blows over, but it's also possible -- with a DOJ investigation ongoing-- that this whole thing implodes. The world is tiring of the games Silicon Valley plays.
I definitely think he should have taken the deal. The tweet was reckless.
>What’s changed is simply that Musk’s profile has risen while his staff’s ability to keep him in check has waned.
https://www.buzzfeednews.com/article/carolineodonovan/elon-m...
https://en.wikipedia.org/wiki/Protection_of_sources
So sorry, you don't appear to understand the difference between using protected sources to acquire real information that can be published (documents or other evidence) and just publishing gossip and scuttlebutt.
>Mr. Rumayyan raised the idea of taking Tesla private and increasing the Saudi fund’s stake in it.
>More than a year later, the lawyers said, Mr. Musk and Mr. Rumayyan met at the Tesla factory on July 31. When Mr. Rumayyan spoke again of taking the company private, Mr. Musk asked him whether anyone else at the fund needed to approve of such a significant deal. Mr. Rumayyan said no, according to the person familiar with the letters.
I guess if Rumayyan testifies that he said he offered a deal then Musk may be ok. [Edit] Or maybe not.
I don't think the fine was a problem here for Musk.
Independent directors (in my opinion) would prioritize saving Tesla as an ongoing concern, even if it meant they remained a small boutique manufacturer (vs growing into an energy storage powerhouse).
TL;DR I want Captain Ahab at the helm, chasing his White Whale, swinging for the fences. I don't want Bob Lutz or Lee Iacocca.
I want people with the integrity not to commit securities fraud.
I'm not saying Musk should get off scot-free, but it'll be sad to see Tesla suffer, when companies like e.g. Uber or Equifax, for which dishonesty and negligence is standard operating practice, continue to function with no consequences. But then, I guess the universe isn't fair.
I'd say the opposite. Kicking out Musk will kill the stock price as the cult members sell, but in the long run Tesla might be better off being run by someone boring, as opposed to an unstable CEO who divides his attention a million ways and seems hell-bent on self-destructing via twitter. Over 40 executives have left this year and the latest CFO quit after a month on the job. For Tesla to become a solid company, that has to stop.
The optimal case would be Musk gets some sleep, talks to a therapist, and takes his ego down a notch. Then he could go back to spreading a vision instead of trying to harm people with flagrant lies. Unfortunately, the window of opportunity for this may have already closed.
What would they go after the short sellers for? Shorting incentivises bubble popping and private antifraud research. I can't think of a single time short sellers trashed a healthy company, yet I can think of several times short sellers pricked something foul before it got too far along.
I usually just pay the tax bill, and move on. I'd love to be true to myself, too. But sometimes it just doesn't work. You mess up, you admit it, and no one is mad anymore.
You can lose a battle, but win a war.
He also spent ~12 years in prison (Though that was a separate action. The SEC can't send people to prison).
The SEC lets companies make corporate announcements on social media. If a company says "I was just acquired for $900 a share," I would consider that material information worth trading on. If a company says "funding secured," which has a very precise and technical meaning in corporate finance, in a corporate announcement, I would consider that to be similarly material.
Our capital markets won't work if straightforward misstatements in corporate announcements are permitted.
Once this trial commences, how long will it take for the final verdict to be out?
Not much acquainted with the US judiciary, but the initial chargesheet by SEC says they demand a jury trial.
>Since Musk so far has chosen to fight this, it could take years to reach an outcome, said Bernstein analyst Toni Sacconaghi in a note Friday.
Like, did he realize that since the trial will take so long that by the time it is done, he will be able to circumvent some of the harsher penalties?
Years for the final verdict?
What’s the difference between Indian and US judiciary then?
I was of the opinion that Indian judiciary is among the slowest in the world coz of tons of backlogged cases and not enough judges.
Furthermore, I thought all legal cases in US closed in matter of months.
> In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense.
So the fact that he may be a fraudster is irrelevant to you?
By the way, he didn't start Paypal or Tesla.
Yeah, he absolutely did start PayPal which came out of merger between X.com (the company he founded) and Confinity (the company Peter and Max founded).
Indeed, this is important to remember - he actively rewrites history to make it seem he founded Tesla, he even bought out the actual founder(s) of Tesla (Martin Eberhard and Marc Tarpenning) so they wouldn't keep bugging people about the fact he / they founded it.
That wasn't what the SEC proposed in their no-guilt settlement. It was Elon giving up the Chairmanship and appointing two independent directors. That isn't crazy. It wasn't dethroning the king. It was adding sensible checks to a situation that screams for them.
That offer was rejected. The SEC's response is to hem to the statutory punishment for public, material misstatements in a corporate announcement by senior officers.
He might have a vision, but that doesn't mean you're good at running a business
However, the settlement doesn't sound like a "Kick Out" so much as a 2-year semi-hiatus. I see no reason why it couldn't be agreed ahead of time that he'd be right back in the saddle afterwards, he's remain a major shareholder, and could give his views known even if he had no actual executive power. Two years isn't nothing but it's also frankly just not that long, Tesla at this point shouldn't implode without him for such a short period, in fact it shouldn't even mess up the vision thing either, they've got plenty of very good challenging long term gigantic market stuff to execute on for a few years, hell for five years. It's only longer term that the innovation would become more of an issue.
If anything I really think a forced few years of stepping back from the day-to-day hustle might really do him so genuine good, and it'd have to be forced because that personality type can never stop on their own. Steve Jobs, with a much longer forced outing for real, came back and vastly stronger leader, still with plenty of drive and acerbicness but some of the most impulsive rough edges sanded down a bit as well. From the sound of it under the settlement Elon would merely be on a 2 year break freed from the daily stress and could have a guaranteed return, so free to really work on the vision and plans to bring back with him. Or just go hike and travel a bit and destress a little? That could help too. He's not an old man obviously, he has lots of time, and with no formal legal admission of guilt the long term consequences should be minimal. Plenty of people recognize his accomplishments and wouldn't mind writing off a lot of his current behavior after a brief time.
Maybe doubling down here is itself also an unavoidable part of his personality, and anyone who has dealt with startups much has probably seen plenty of maverick founders who are incredible founders but can't transition as well to different life-stages of a business. It doesn't make them bad, it's just another set of strengths and weaknesses. But I think it's also a genuine blunder which is kind of sad. The SEC is a scary opponent, and here it looks like they really didn't want to bring down the hammer, they offered a disciplining for a genuine fuckup on his part that CEOs just cannot do, never have. And the potential penalties for actual conviction are severe, including not just prison but possibly lifetime bans from C-positions in the related area of business, and Elon would not be able to just wave that away.
Exactly. During that time, let two competent replacements get Tesla back into shape. Get help, then come back if you really must. How is that not a win.
Musk may not have been trying to manipulate the stock price when he said funding was secured, but if he was allowed to speak in such a sloppy, misleading manner, then other CEO's would start doing too too, which would have very bad consequences. So the SEC has to come down on Musk as hard as it can, and it has great powers for doing this.