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Utopia Talk / Politics / Elon Musk get sued by the SEC
murder
Member
Fri Sep 28 11:05:34
And no one here noticed?

Elon Musk sued by SEC, Tesla shares plunge

Elon Musk sued by SEC, Tesla shares plunge: The Securities and Exchange Commission filed a lawsuit Thursday accusing Tesla CEO Elon Musk of defrauding investors when he tweeted last month that he was considering taking the company private. Shares of Tesla (TSLA) fell in after-hours trading. The stock was down 10.75%. [Yahoo Finance]

How Musk sank himself: There’s spectacular irony in the SEC lawsuit filed against Tesla CEO Elon Musk. Musk has raged against short sellers betting that Tesla’s (TSLA) stock price will plunge, repeatedly predicting they’ll lose their shirts. But short sellers are likely to cash in as Tesla’a stock falls on news of the SEC suit. It could fall a lot farther if the SEC succeeds in forcing Musk from the company he founded. And the entire downfall is Musk’s own doing. [Yahoo Finance]

murder
Member
Fri Sep 28 11:07:55

If the government wins its case, Musk will not be able to serve as an officer or director of ANY public company.

And Tesla will die.

Rugian
Member
Fri Sep 28 11:25:00
Another example of government stifling innovation and productivity in the private sector.
murder
Member
Fri Sep 28 11:28:33

You mean innovative fraud? :o)

Seb
Member
Fri Sep 28 11:58:42
Murder:

Yup. Didn't feel I needed a "told you so" to the chuckle heads here though.

Seb
Member
Fri Sep 28 12:00:00
Executive burnout is a bitch.

I'm not sure Musk really thought this through. Not intended as fraud for personal gain but probably more to burn short sellers.
Forwyn
Member
Fri Sep 28 12:00:35
Not fraud.

SEC going to bat for short-selling parasites. What a surprise.
Sam Adams
Member
Fri Sep 28 12:01:25
Ya you cant tweet things like that when you run a publicly traded company. Oops.
Seb
Member
Fri Sep 28 12:39:03
Forwyn:

Short sellers have a role in market efficiency.
Rugian
Member
Fri Sep 28 12:53:11
He put a car into space, let him make his weed jokes.
murder
Member
Fri Sep 28 12:54:43

Won't be long until he runs SpaceX into the ground too.

Sam Adams
Member
Fri Sep 28 13:11:16
"He put a car into space, let him make his weed jokes."

True
murder
Member
Fri Sep 28 13:15:48

NASA did it first ... decades ago ... except theirs actually got somewhere and drove around with real people on it.

Sam Adams
Member
Fri Sep 28 13:18:19
Murder hates free market enterprise.
Nimatzo
iChihuaha
Fri Sep 28 13:31:25
Musk will prevail, for blessed is he who electricly propels man forward in the image of God Emperor Jobs. The hater, the heretic shall burn in the fire of his rocket engines. To space we come, his will be done, on Mars as it is on Earth.

hood
Member
Fri Sep 28 14:09:55
Tesla is short term fucked. Maybe a non-Musk exec can right that ship, maybe not.

SpaceX is fine. They're already dominant in the private launch sector and they have an extremely solid second in command to run things for Musk. It's not like he was putting much focus on SpaceX anyway, considering all of the fiascos with Tesla.
murder
Member
Fri Sep 28 15:29:45

^ mostly true, but he's been writing checks his ass can't cash.

He keeps talking about Mars, and he ain't sending anyone to Mars.

Seb
Member
Fri Sep 28 16:41:25
Hood:

Tesla is probably more valuable as a brand.

Their cars aren't the best in terms of design and fit and finish - not terrible but no deep moats like Apple Vs other device manufacturers.

The security of their software is reportedly terrifying. Nothings really happened yet but I've heard enough that I can see this being an issue. Again, other firms have issues, but they've made software front and centre far far more critical.

And in terms of scalability and efficiency of production they are a long way behind other manufacturers.

Without musk, the obvious thing shareholders of Tesla will explore is to JV or sell to an existing manufacturer. It solves all the points.

SpaceX, the COO runs it, but again if Musk is distances from it, any drive to mars will peter out. It'll focus on orbit and services delivered from orbit. Not creating new markets on the moon or mars.



hood
Member
Fri Sep 28 16:53:03
"any drive to mars will peter out. It'll focus on orbit and services delivered from orbit. Not creating new markets on the moon or mars."

Absolutely baseless conjecture.
kargen
Member
Fri Sep 28 17:05:15
I was wandering what the South East Conference had to do with Tesla. The Securities and Exchange Commission makes more sense.
McKobb
Member
Fri Sep 28 18:00:13
Jobs was a hack
Forwyn
Member
Fri Sep 28 18:10:14
"Short sellers have a role in market efficiency."

Durrrrrr only short sellers buy low and sell high durrrrrrr
murder
Member
Sat Sep 29 08:14:01

Short sellers don't buy low and sell high. Short sellers sell high and buy low.

At least they do when things work out.

Forwyn
Member
Sat Sep 29 13:09:41
Clearly. The point is that virtually every trader has the goal of buying low and selling high. Short sellers just reverse the order with other people's assets.

A niche group of traders betting on failure are not needed for "market efficiency".
Seb
Member
Sat Sep 29 13:34:44
hood:

Conjecture, sure. Baseless? No.

Musk controls about 78% of the stock of the company, but I would guess if convicted he would still find himself deeply marginalised and unable to exercise the kinds of leadership needed to push towards Mars, given that mars colonisation will require enormous capital investment.

In the absense of leadership and finance,
companies focus on returns.

There is a market in orbital services and launch.

There is no clear ROI for a Mars venture and enormous risk. It needs someone visionary and with substantial clout actively pushing that forward to make it happen.

Ergo, without Musk, it's almost definitely not going to happen.
Seb
Member
Sat Sep 29 13:43:46
Forwyn:

Murder kind of made the point already.

But basically, the role short sellers play is to counter momentum.

Those who buy low are sending a signal "I think this company is undervalued" which pushes up prices and results in greater capital being available.

This can lead to a runaway effect: keep buying rapidly rising stock on the basis that as long as you can find a greater fool to sell to, you will make money.

Short Sellers introduce aditional information into the price signal: they analyse a stock, note where it is underperforming and put a significant bit of skin in the game (they can suffer pretty much unlimited losses) betting against the company on the basis of their analysis of the commpanies strategy, performance and potential.

The net result then is to dampen enthusiasm and momentum behind an overpriced stock.

People like Musk can get hugely upset about this as, particualrly when a company is an innovator and disrupter, it looks like a vote of no-confidence in their vision. Which it is.

But the sensible response is to ignore it and keep making the case that you are a positive value investment. If you are right, they will go bust.

IF you adopt a shoot the messanger policy, it tends to validate the skepticism.

As is the case here.
hood
Member
Sat Sep 29 16:13:47
"Baseless? No."

Unless you have solid intel that Gwynne Shotwell is going to completely abandon Elon's vision, it is indeed baseless conjecture.

When the trip is finally made routine and cost effective (~$300 mil estimated), there will undoubtedly be industry demand popping up, just as we saw happen when private launch exploded in the past few years.
Pillz
Member
Sat Sep 29 16:27:22
Musk will be fine. It should be a lesson to the Seb's of the investment world not to act on speculation and for short sellers not to attempt stock manipulation of their own. The bad press and published opeds about how Tesla is always doomed or musk is selling snake oil (in some regards yes, others no) that appear every week for the last couple of years is just that.

Maybe musk will save the financial sector like he's saved private space industry and electric cars. Musk on Mars and the God Emperor here on earth, maybe they'll save humanity.
Seb
Member
Sat Sep 29 17:14:09
Hood:

Gwynes an employee. In the end, limited scope for setting that kind of ambitious strategy.

Pillz:
Musk just resigned from chairman of Tesla board. He remains CEO. SEC being quite generous.

Short selling isn't stock market manipulation. In any case, Tesla stock is a long way below what it was before the tweet. Short sellers will have done very well.

I like Tesla, I'd like it to succeed. I like Musk, when he wasn't clearly a nervous wreck.

hood
Member
Sat Sep 29 17:56:21
"Gwynes an employee"

She's the COO and practically runs the company these days. What fantasy land do you live in?
hood
Member
Sat Sep 29 19:59:16
Speculation doesn't matter: Musk settles.

http://ars...o-pay-40-million-in-penalties/
Seb
Member
Sun Sep 30 06:03:25
Hood:

Yes. An employee.

You don't really understand corporate governance do you?

She doesn't own the company, she takes her instructor from the CEO. She runs the company day to day, but ultimately it's the board and CEO that set direction. As it happens she does do a lot of that too, because Musk as CEO lets her.

The CEO is directed by the board of directors who are normally accountable to the shareholders with fiduciary duties. In the US it is common I think to merge chair and CEO position. This makes the CEO quite powerful. Had the SEC persisted and gone for musk's removal from exec positions, the directors would appoint a new CEO and board chair which would direct the company.

That would substantially dilute Musk's ability to set the direction and investments SpaceX can make. Even as a majority shareholder in a private company, a majority shareholders ability to sack the board for not pursuing a mars program with highly speculative long term returns is limited.

It would make it all much harder. Now throw in the possibility of a large settlement to short sellers (the SEC settlement just gets him off the hook with the regulator, not those who are dammaging), he might not even be majority shareholder soon.

We shall see!

Either way, I think we can all agree the tweet was a bonehead manoeuvre which I don't think musk would have made a few years back.

They need to find a Gwynne figure for Tesla, probably from the automotive industry, he needs to take a break and get his head straight, and someone needs to vet his tweets.

Or he will fuck it all up.


Pillz
Member
Sun Sep 30 06:24:19
The settlement goes to those deemed to have suffered damages by musk's tweet
Pillz
Member
Sun Sep 30 06:24:35
Have you ever written a correct statement in your life?
Pillz
Member
Sun Sep 30 06:25:54
With the settlement, he admits no wrong doing either. Civil suits thus (next to) impossible
Seb
Member
Sun Sep 30 06:30:54
Pillz:

Yeah, that doesn't extinguish the class action lawsuit. Go check. Also the DoJ case on fraud.

The fact he admits to no wrongdoing isn't material either way. If he had a strong case, would he be agreeing to be sacked?

It tends to show he may be forced to settle on other areas.

hood
Member
Sun Sep 30 10:09:20
God damn, Seb is retarded.

Seb, who do you think would have become CEO of SpaceX if musk was forced out? Some rando off the street? Or the COO currently acting like CEO for all practical purposes?
Seb
Member
Sun Sep 30 15:26:57
Hood:

I think it highly unlikey they'd promote the COO out of the position she's brilliant at and have her be a bad vision and front man person. The whole reason they hired her was because of her ability to execute without the distraction of the vision and direction stuff. Why do you think they would go back to having a CEO double time as COO, and why would the board decide to move their highly effective COO into a very different role and then risk a new COO? That doubles the change in c-suite hence the risk.

Step one, new chairman.
Step two, new CEO.

Nobody said some random off the street. Surely you are not so stupid that I need to specify that.

Seb
Member
Sun Sep 30 15:34:49
Hood, once again, being hot-headed, foolish, and unnecessary belligerent in tone.
Seb
Member
Sun Sep 30 15:35:41
BTW, the reason they would go for new chairman would be to allow the board to formulate a view of what the company needed and then select an appropriate CEO.
Average European
Member
Sun Sep 30 15:43:27
The SEC...the guys who took so long to get Bernie freaking Madoff. They must have been like this when this tweet landed:

http://youtu.be/IOfMKv5fxgQ?t=24
murder
Member
Sun Sep 30 20:17:54

"When the trip is finally made routine and cost effective"

People tend to be guided by science fiction and grandiose promises by hucksters like Musk. Near Earth orbit is not routine more than half a century after the first man orbited the Earth. The technology is mature and there are still at most a handful of people in orbit at any time ... and they all have a life boat, and a very short journey home, in addition to outside help being an arms length away.

Before you ever see a colony on Mars, you would see one on the Moon. Before you see a colony on the Moon, you will see a cruise ship sized resort in low Earth orbit. Likely more than one.

You can't let yourself get taken in by PT Barnum. When you hear promises about colonies on Mars, you need to analyses to see if it makes sense at all, and if you think it does, what has to happen or is likely to happen first.

hood
Member
Sun Sep 30 20:35:19
@ murder:

Well, you're stupid. A vast majority of near-earth launches don't carry people. Why would you expect launches to Mars to differ? The reason we don't see much happening on Mars is because it used to cost a few billion just for the trip. With cost of travel decreasing, so too will cost of payloads, just like what we have seen with near-earth.

Most of space launches aren't human. You would do well to recognize this instead of spouting nonsense.


"Before you ever see a colony on Mars, you would see one on the Moon. Before you see a colony on the Moon, you will see a cruise ship sized resort in low Earth orbit."

The difficulty between the moon and mars is less than an order of magnitude apart. Really not insurmountable stuff, and certainly within the range of being able to make the leap instead of the step. And cruise ship resorts in LEO? A colony on the moon is definitely easier.



@ seb:
unnecessary belligerence? With you, there is no such level of belligerence that reaches levels of unnecessary. The rest of that drivel is nonsense.
Pillz
Member
Sun Sep 30 20:47:50
Do you drink water pulled straight from the thames, Seb? How are you so stupid
Forwyn
Member
Sun Sep 30 21:09:38
Gimme dat solar L1
murder
Member
Sun Sep 30 22:28:02

"Most of space launches aren't human. You would do well to recognize this instead of spouting nonsense."

I'm sorry I'm having a hard time determining if you're talking about sending a bunch of rovers to Mars or people. The first could be done now.


"The difficulty between the moon and mars is less than an order of magnitude apart. Really not insurmountable stuff, and certainly within the range of being able to make the leap instead of the step. And cruise ship resorts in LEO? A colony on the moon is definitely easier."

It's definitely an order of magnitude apart, which is why it hasn't been done. Cost has nothing to do with it. We spend billions putting telescopes in space. We spent untold billions building the ISS.

The simple truth is that there is no point to it other than to do it.
hood
Member
Sun Sep 30 23:02:03
"The first could be done now."

Slowly and expensively. When the trip to mars costs over $1 billion, nobody is going to pay it except governments. When that cost is $0.3 billion ($300 mil), non-government entities just became able to afford that cost.


"It's definitely an order of magnitude apart, which is why it hasn't been done."

No. It hasn't been done because there's no reasonable way to retrieve humans on Mars that doesn't have DOD levels of cost involved. We could easily put boots on mars, we just don't want to pay for the return trip. The costs of going to the moon are much, much lower. NASA doesn't exactly like suicide missions and it doesn't have the budget to send several rockets to Mars just to land some people and return them at current prices.
Seb
Member
Mon Oct 01 08:11:44
Hood:

To what possible end. There's this idea that if it just get cheap enough we will get this explosion of Mars development.

By any estimation, it's cheaper to colonise Antarctica which is much more hospitable than Mars and has readily exploitable resources.
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