Musk's funding secured fund was partial joke

"The Securities and Exchange Commission on Thursday alleged that Elon Musk chose a $420 price for possibly taking Tesla private because it is a marijuana culture reference that would "amuse" his girlfriend."

LOL

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Comments (70)

Sep 28, 2018 - 8:11am

He should be put in prison for pumping his stock. He knows better and I know for a fact the SEC would aggressively pursue anyone who tried something like this with a microcap. Hopefully they don't show their bullshit double standards off again, although I'm 99% sure they'll just slap a fine around or let him go on a light sentence...

BTW, the other interesting thing with Musk is the way his PR for his private companies is always timed around bad news coming out for Tesla (his Pubco). I don't think that's on accident and it should be investigated as well. Not illegal but IMO it's a pretty clear attempt to keep Tesla stock moving.

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Sep 28, 2018 - 8:36am

He already turned down a no-guilt settlement which had a fine attached to it and did not require him to step down as an officer... so the SEC already showed their bullshit double standard. I think now he turned that settlement down though this is going to be a protracted legal battle that should result in him being removed from the company, one way or another. If the board had balls he'd already be out. My end of September prediction for his ousting was wrong :(

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Sep 28, 2018 - 10:21am
BobTheBaker:

He already turned down a no-guilt settlement which had a fine attached to it and did not require him to step down as an officer... so the SEC already showed their bullshit double standard. I think now he turned that settlement down though this is going to be a protracted legal battle that should result in him being removed from the company, one way or another. If the board had balls he'd already be out. My end of September prediction for his ousting was wrong :(

Pulling the lenient settlement was retarded. His reasoning sounded like some high douchebag.

Sep 28, 2018 - 3:44pm

The case sounds like someone was high when they decided to file.

Guy floated an idea and they're charging him with....exactly what? Floating an idea? No law was broken.

There's no settlement because there's no case.

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Sep 28, 2018 - 3:55pm
UFOinsider:

The case sounds like someone was high when they decided to file.

Guy floated an idea and they're charging him with....exactly what? Floating an idea? No law was broken.

There's no settlement because there's no case.

Are you serious? This take is cringeworthy bro. Had he said I am thinking of taking TSLA private... MAYBE he that's fine. Had he said I would take TSLA private at $420... MAYBE that's fine. The entire issue is that he said he had "funding secured" for taking TSLA private at $420 when he clearly didn't. That is the case. He mislead investors and put out false information as the CEO of a public company (regarding said company). It's an open and shut case and I am amazed you just tried to spin some scenario in which it isn't.

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Sep 28, 2018 - 4:29pm
UFOinsider:

The case sounds like someone was high when they decided to file.

Guy floated an idea and they're charging him with....exactly what? Floating an idea? No law was broken.

There's no settlement because there's no case.

I think he established intent, consideration, and an offer. As CEO it's going to be hard to argue it was just some carefree idea. Maybe he should say he was high so he can argue mindstate

Sep 29, 2018 - 9:47am

Most of the guys hating on you, if they ever work in real finance, will spend an inordinate amount of time manipulating prices for the benefit of their companies. Pretty high
Minded to act like the majority of their waking hours are nice and tidy. I provide liquidity, herp a derp.

He IS the company. I have better things to worry about,

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Sep 29, 2018 - 11:29am

Musk deserves a double standard. He's a tech leader and had done a lot of good for the country. He's not some guy manipulating a stock for profit.

It also appears as though he's had a mental breakdown.

Due to those reasons he deserves prosecuted but a lighter sentence.

Honestly the fair thing is he pays $100 million fine and goes on vacation for 6 months. And visits a therapists.

Sep 29, 2018 - 12:00pm
traderlife:

Musk deserves a double standard. He's a tech leader and had done a lot of good for the country. He's not some guy manipulating a stock for profit.

It also appears as though he's had a mental breakdown.

Due to those reasons he deserves prosecuted but a lighter sentence.

Honestly the fair thing is he pays $100 million fine and goes on vacation for 6 months. And visits a therapists.

It really does feel like he's having a mental breakdown. Then again, it could just be that his use of Twitter has increased a lot in the last year or so, so we've gotten a deeper dive into his always crazy personality. Who knows?

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Sep 28, 2018 - 11:46am

Do any of you think it's possible Elon wants to fail?
He had an interview with The NY Times (if I recall correctly) and he basically invited someone to run Tesla because it's so brutal on him. He notoriously sleeps on the factory floor at times and employees have found him sleeping in random corners of the facility.
Do you think he has too much of an ego to step down but deep down really wants to fail? So his way of escaping Tesla is to be barred from being involved in the company by the SEC.
Just a theory.. interested to hear your takes on this.

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
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Sep 28, 2018 - 1:03pm

Interesting idea- he has brought up how he mostly expected it to fail a lot recently. His main goal of getting cars electric has worked very well, when he started people lightly entertained the idea and most thought he was crazy/stupid/couldn't be done but now major car companies are pledging to go full electric in the next 20yrs.

I bet he's tired af of all the Tesla bullshit, and really wants to move on to the next, exciting thing. He's not in his 20s anymore and has a (large) family.

The big problem is all the effort and sweat he's put into it to get it where it is today, as well as the fact that nobody in the world can run it like he can. I don't see a real future for Tesla without Musk, it'll just be a slow death and most likely acquisition. He could probably get by if he revoked his patent stance and started charging all the people now using the technology they made. Basically what we're seeing is a rich idealist facing cutthroat pragmatists. He's had the intelligence, grind, and appealing mission to make it so far, we'll see what the future brings. Right now he needs a major change in the market- Tesla is still the most antifragile CaR company, but there's no chaos for them to thrive off of.

Controversial
Sep 28, 2018 - 2:51pm

The suit has no actual merit. He didn't say he was taking the company private and someone on the SEC simply jumped on this to try to make a name for themselves, probably a Trump appointee. Don't be surprised if they were put up to this by A) the auto business or B) a shareholder intent on taking over the company. Typically, the SEC can take years to organize...this is a rush job and will fall flat.

"Am considering taking Tesla private at $420. Funding secured."

Look at the operative word: considering. He was talking with some Saudis that easily have $50BB pocket change, so it was entirely feasible. Yet public outcry was to keep the company private because shareholders saw the potential and didn't want to be bought out at $400, 500, or 1,000....they think they'll make far more in the long term. But no actual plan was made, no actual law was broken, and no actual challenge to Musk exists.

Musk is A) building a new industry B) employing primarily American workers and creating jobs in America, C) making initial shareholders wealthy, all while D) producing something that will benefit mankind in all sorts of ways. You'd think the federal government (see: orange clown) would be doing everything possible to protect TSLA.

All this half assed lawsuit will do is reinforce TSLA's credbility and bolster Musk's profile, if that's even possible. The SEC will have its ass handed to them in court, and the agency will be weakened and lose public support...which strangely serves the orange idiot's agenda. Musk called the SEC's bluff and their sad "negotiation" bullshit settlement was ignored; next they'll be humiliated in court. They sued a billionaire who didn't break any laws....how do you think this will play out?

Sometime in the next year or two, TSLA will turn a profit and then suddenly everyone who wants to be perceived as edgy and smart (but isn't) will jump back on the bandwagon...and Musk will rake in Another fortune

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Sep 29, 2018 - 6:28am

You aren't allowed to publish material information unless it goes out via established channels that are outlined in your filings as a pubco. Not sure what's hard to comprehend lol

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Sep 29, 2018 - 11:26am

Musk has already interviewed with the sec and admitted to the the facts established in the case including that he thought the tweet would amuse his gf. I'm fairly sure the sec has solid lawyers who know the law. Since the facts are not in dispute then it seems certain he committed the crime.

He's even stated that he had not discussed a 420 price and it was just to amuse his gf.

Sep 29, 2018 - 12:06pm
traderlife:

Musk has already interviewed with the sec and admitted to the the facts established in the case including that he thought the tweet would amuse his gf. I'm fairly sure the sec has solid lawyers who know the law. Since the facts are not in dispute then it seems certain he committed the crime.

He's even stated that he had not discussed a 420 price and it was just to amuse his gf.

Rule of thumb--government agencies have the worst attorneys. The best and brightest don't go to work with the gov't (except right out of school and as second careers). I have little doubt that Musk's securities lawyers are much better than the SEC's.

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Sep 29, 2018 - 12:04pm

UFO, I did think that it looked like a pretty open-and-shut case, but you make some solid points. In fact, what seems open-and-shut to us might have countless holes in it that $1,000/hour top securities attorneys can use to shred the case. That's probably why Musk walked on the deal. He thinks he can win.

Edit: Also, just to add--the U.S. legal system is overwhelmingly based on common law, so what may read like clear and obvious legal text to us in the Securities Act almost certainly has 85 years of jurisprudence surrounding it. All some brilliant lawyers would really have to do is to show that Musk's actions relied upon [such and such specific SEC/court rulings] with extremely similar details, of which there are certainly many over the last 85 years. I'm sure the top securities lawyers can cite these similar cases by memory.

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Oct 9, 2018 - 11:59am
real_Skankhunt42:

UFO, I did think that it looked like a pretty open-and-shut case, but you make some solid points. In fact, what seems open-and-shut to us might have countless holes in it that $1,000/hour top securities attorneys can use to shred the case. That's probably why Musk walked on the deal. He thinks he can win.

Edit: Also, just to add--the U.S. legal system is overwhelmingly based on common law, so what may read like clear and obvious legal text to us in the Securities Act almost certainly has 85 years of jurisprudence surrounding it. All some brilliant lawyers would really have to do is to show that Musk's actions relied upon [such and such specific SEC/court rulings] with extremely similar details, of which there are certainly many over the last 85 years. I'm sure the top securities lawyers can cite these similar cases by memory.

Thanks, I was frankly surprised he settled but my guess is that he realized it's yet another distraction from getting production ramped up. I'm not the only one, there were a flood of expert legal opinions that didn't see any major problem, so I'm kind of chuckling to myself at the handful of 20 year old "legal experts" on this thread who are so convinced this couldn't have played out any other way. I sit across from a bunch of guys from white shoe law firm and they were pretty much "yeah it's dumb to tweet stuff like that but good luck in court". Musk has access to much better than the standard $1000/hr lawyers. Not that any of this matters.

What's funny to me is the thought that $40BB is such a hug sum of money that TSLA couldn't be bought out. The Saudis blow that much every few years funding ridiculous projects all over the place. Apple has HUNDREDS of billions in cash and who knows what consortium Google would be able to pull together with literally a couple of phone calls. Also funny to me is the idea that auto companies would buy TSLA: Ford has $100BB of debt, they're not buying anything. GM nixing their electric cars years ago is the very thing that inspired TSLAs founders in the first place so I don't see that deal happening either. And it's unlikely that a TSLA would allow a foreign maker to buy them given so much of the company is US based.

Which reminds me of another thing: TSLA is creating a LOT of American jobs. In a political era where "buy 'murica" is getting votes, the one company that is actually creating a huge American industry is getting flak for.....not doing it fast enough? They put out like what, 55K cars last quarter. They're getting there. Many long time investors are find with it taking longer and it's just some analysts and pundits who see a "crisis" because of the production delays. Musk himself can pull out a few billion and keep the company funded in the worst case. So this pressure lately just seems irrational. Fitting though I guess given the history of the company is pushing out management when they've served their purpose....

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Oct 7, 2018 - 8:35am
AlexCook:

What are you talking about? It is not feasible at all. The TXU buyout was enough of a mess to put together, and this is even bigger.

Many have gone to jail for less.

How many billionaires go to jail? For less? Any halfwit with billions of dollars could have paid a team of $20K/hr lawyers to contest the suit. The operative word was "considering", as in there is no plan, it's just an idea. I'm frankly surprised Musk settled. I would not have (but I don't even use Twitter so whatever). Probably a good thing because he needs to focus on getting production glirches worked out, and they're pretty close.

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Sep 28, 2018 - 3:02pm

Minus the severe reclusiveness, crippling mental health issues, aversion to the media....nah, it's different

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Sep 28, 2018 - 3:10pm

But I see where you're going with this :) there are some parallels

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Sep 29, 2018 - 8:43am

The whole situation looked bad. I am not sure if he broke a law or not but it certainly warranted a SEC investigation. There were issues with disclosure if he actually intended on taking Tesla private. I do not think a tweet is full regulatory disclosure. As it turned out, there was an opportunity to make money when the stock price rose on the news and then dropped substantially.

I do give Musk a lot of credit for making a lot of money from a company that loses money. They lost about 2 billion in 2017.

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Sep 29, 2018 - 1:15pm

Wow, people who invested in a tax credit business with no scale and a history of missing production numbers are pissed because the bombastic CEO made a ridiculous claim.

Should have never gone public. Worst part is always dealing with idiot investors and the government.

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Oct 2, 2018 - 6:51pm

And two years ago 80% of people on this board needed kneepads, you couldn't criticize the guy. TSLA is a cult.

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Oct 2, 2018 - 9:08pm

He should honestly have sold to a large automaker years ago. Premier brand, great product, get economies of scale, etc.

With premium brands coming out with electric cars, I can't see why people would get Tesla, other than cult. No dealership network, no repair infrastructure, inefficient manufacturing process and a mercurial leader who does shit that hurts his company.

Elon - sell Tesla and focus on rockets and solar.

Sep 29, 2018 - 6:06pm

The SEC settling this fast, like barely 24 hours fast AND on a Saturday no less (government workers HATE working weekends) makes me wonder if a criminal indictment is going to drop early next week and the SEC was just a trial balloon or fishing for info in order to make a criminal case.

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Sep 29, 2018 - 8:08pm

It's the end. He will be sued by investors but this should be the end of it.

The government doesn't want to put musks in jail or punish him much. He is a successful innovator and the government doesn't and shouldn't want to excessive punish those guys. But they also couldn't just let him get away with this.

Sep 30, 2018 - 7:59pm

I do not think it makes any difference to the SEC in terms of what CEO or insider makes a tweet. Their job is to enforce the law and to investigate when they believe a law may have been broken

http://www.series7examtutor.com

Sep 30, 2018 - 11:42am
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