Most-likely scenario:
Donald Trump doesn't like Elon Musk, ergo it has come down from Donald, through "channels," that the SEC is to selectively and excessively enforce against Musk.
3
That is so funny, they want to bar him yet the president of the US says want he wants and nothing is done "ever!!!!!!"
2
Great. Now SEC should examine the Tweeter in Chief for his pronouncements. May be they could bar him from being a CEO.
4
It's unfortunate that such a talented guy is going to be taken down. But I think he is. He tweeted weeks in advance that the people who had shorted Tesla stock were going to get a comeuppance. Then, he Tweeted about the bogus takeover offer and popped the stock, undoubtedly costing those who had shorted the stock a lot of money. Then, when the takeover proved to be sham, the stock tanked and cost the long investors a ton of money.
I think he probably committed criminal offenses. He and Tesla will undoubtedly be sued civilly for losses incurred as a result of his tweets and market manipulation.
If you can't charge Musk, who can you charge for manipulating the price of your company stock?!
3
A lot of the comments here can be summarized as "a lot of other people (e.g., big bank execs) broke laws and were not punished, so Musk should not be". The big banks should be judged and punished for SEC violations, and so should Holmes and Cuban and Musk. Also, Musk should consider being evaluated for a manic or hypomanic episode, because his constellation of behavior (e.g., sleeplessness, hyperactive goal-oriented behavior, impulsivity, impaired judgment, smoking weed) seems erratic and indicative of manic symptoms.
5
Trying to improve "our" lives how? By sending a car into space to float around with all the other space junk. Or by killing people when Tesla self driving cars malfunctioned. Bet the people that were killed due to self driving cars don't think their life improved. No we improved his life by making him rich thereby allowing him to live out childhood fantasies like putting a convertible up in space just because he could.
1
The SEC and DOJ let every known fraudster from home appraisers, mortgage loan originators, big bank executives and ratings agencies slide after they blew up the global economy in 2008- “ an epidemic of fraud” according to William k Black.
But they’ll go after a stoner genius who’s trying to save the planet!
https://www.democracynow.org/2015/1/1/matt_taibbi_and_the_9_billion
5
Elon Musk may be approached by Chinese investors and may decide to move Tesla to China.
To be clear: Elon Musk’s Tweet seems more dumb than nefarious. He wasn’t trying to pull a Madoff to enrich himself, rather he was trying to buy time.
To most people, an appeal for time is what his Tweet seemed to be asking. Wall Street pressures companies to deliver unrealistic results every quarter, if not, there’s the army of Hedge Fund geniuses ready to dismember companies for quick personal gain.
There’s no doubt that Tesla will deliver and then some. The SEC rules should be changed to mid-year and full-year reporting. It will provide more stability to the economy.
3
Nikola Tesla is turning in his grave. Looks like Musk's fate is closely aligning with Tesla's
1
"...and there is no evident internal candidate for such a role."
Nonsense. There are at least three: JB Straubel, Jerome Guillen, and Deepak Ahuja.
Why on Earth does anyone important tweet? It offers marginal benefits in rapidly connecting with people, but at the risk of impulsively putting any idiotic thought on record basically forever.
Certainly, don't tweet and drive.
But also consider just not tweeting at all.
12
We all know that Elon Musk is a highly intelligent, creative and dynamic individual. Short sellers would be well advised to take that into consideration when betting against him or his companies. In my opinion the short sellers deserve to have their legs cut out from under them. After all Wall Street is the casino on the Hudson and nobody knows that better than the SEC. Going after Elon Musk now cuts the legs out from under Tesla shareholders and inflicts lasting damage on the company. For the SEC it is simply a self serving PR exercise which proves they could not care less about Tesla shareholders.
2
Short sellers take advantage of overpromising CEOs all the time. Usually the same CEOs are not stupid enough to tell blatant lies in public forums. It is why short selling is both legal and rewarding. Still, the Tesla stockholders have the Board to look out for their interests. If the Board cannot control Mr. Musk, the stockholders have only themselves to blame. Still the SEC has the whole population of stockholders to protect. It cannot let any other CEO to get the idea that it is ok to announce an unsubstantiated public offering or set a public LBO price to impress a romantic partner just because he only did it on Twitter.
3
I doin't pretend to know what's going on in ELon Musk's head, but it sure seems like he has gone 'round the bend in terms of CEO behavior. Smart and quirky is all well and good when you are a startup, but Tesla is at the point where it needs to be run by grown-ups who know that tweeting random thoughts that affect billions in market capitalization is not the way to behave.
6
Like many visionaries, Mr. Musk can't see how he is wrong and especially by something like a foolish tweet (his possible view). I suspect his not wanting to take an early deal from the SEC pushed the SEC to take the extreme steps it did. My opinion: more tweets, lots of positioning, and then a settlement. Mr. Musk will ultimately continue to lead in a public company
1
Musk is an idiot that got lucky once, and is too dumb to see that fact.
Thrice. Not counting Tesla.
1
I never thought of what Musk said as being any more than a contemplative statement of an alternative course of action that he was considering.
The short sellers don't simply act in the market. They also run slander campaigns to move the market. Sometimes they do this from countries where they can't be held responsible or prosecuted. Other individuals capture and create media opportunities to denigrate corporations and their leadership and there are no inquiries into their activities.
1
What is your evidence?
They are not officers of the companies and therefore do not (or should not) have non-public information. CEOs do...
Clearly a move fueled by industry lobbyists. The man is trying to improve our lives. Which cuts into the capitalist mode of producing at the expense of our lives.
2
How is he improving your life? If anything we are improving his life immensly. All he's doing is putting a car in space with all the other junk up there.
1
No way this sticks. The tweet, even at first glance, was idiotic and obviously problematic. But banning Musk from running any public companies, forever? No judge is going to order an injunction of that magnitude for this. There's going to be some penalty, to be certain. The SEC equivalent of life in prison? No way.
Let the punishment fit the "crime"... Pay restitution to those affected, move on.
6
Short of banning upper management of all publicly-held companies from all social media platforms, there is really no way to stop this from happening over and over again. The SEC is suing Musk to deter copycats. Musk's crime is that he revealed to the world a very easy way to make members of the 1% richer at the expense of the 10%.
3
The SEC gives barely a tap on the wrist when large corporations have members suspected of insider trading but wants to keep Elon Musk from running his own company because of his candid remarks?
The SEC does not know how to manage the markets and should not reach into the running of any company on this basis. As far as I can tell, some people on Wall Street were unhappy with the stock performance as a result of reactions to Musk's comments - well, too bad.
It would be better to simply replace Wall Street with a decent algorithm than stop Elon Musk from controlling his brain-child. Think of the savings when we don't have to pay the bloated salaries of people who contribute very little to our economy! Then, the SEC can simply be responsible for product support. Perfect.
5
He did that to stick it to the shorts. It's called fraud. If he were a republican the nyt posters would be calling for criminal penalties.
Had it been around in the 1880s, one wonders what it would have done with free wheeling visionaries such as Thomas Edison.
1
Mr. Edison was a very smart man and an aggressive businessman. Even so, I doubt he would write letters to every newspaper making asinine claims about a stock in corporation he ran. Or set a bid price to impress his girlfriend. Mr Musk, on the other hand, did.
2
If the SEC fails to remove Mr. Musk from Tesla, the company's board of directors should. In fact, the board is obligated to remove him. They have a fiduciary duty to the act in the best interest of the company and its shareholders. Mr. Musk is way too much of a loose cannon now, and is clearly a risk to the company's reputation. (No, I don't own any shares).
7
But are you a short seller or have you any other trades in the market or are you receiving any benefit from any other entity with an investment of any kind in Tesla ?
Finally. What Musk did was obviously illegal. This is an open and shut case of securities fraud. He doesn't get to avoid prosecution because he has a lot of rich, white fan boys......or maybe he does? #ThisIsAmerica
6
@LT The big banks all killed the market and instead of punishing them, the government bailed them out. I can admit that Musk's tweet was clearly a mistake, but put it in context to the games played in the rest of the market and you can easily see this is a major overreaction, one designed to send a message to a company that threatens the future profitability of the entrenched and powerful fossil fuel industry.
3
@JB
''the government bailed them out.'
You're right, Obama bailed them out and you and I got the bill.
Why has no one sued Obama over this?
@AutumLeaff That's not true. While Obama bailed them out, he was left with a bad choice by Bush2, who kicked the can down the road. All of this started under his watch. But you are missing the point. The point is the government ignores things it wishes to ignore, supports things it wishes to support and literally plays politics. All of them do it. If it makes you feel better to blame Obama, then fine, but the reality is that all Presidents have made similar moves. Tesla is being singled out. I smell bias.
Elon
Please come to Europe. We'd love to have you.
7
No please don't. Why so he could create economic inequality like we have here where a CEO makes like 100x more than their workers? Yes making rich people richer doesn't help 99% of people and Europeans are smart enough to know that.
Musk must go for Tesla to stay credible—"pedo guy" sealed that fate—but you just KNOW there's ulterior motive at the always corporate-friendly, newly covfefean SEC.
"covfefe" and his party-cult has long wanted to explicitly reward fossil-burners at non-lethal energy's and humanity's general expense. By chucking Musk from Tesla, the company will lose both its crazy and its passion to work toward electric cars, carmaker-dealer-petroleum-industrial complex be damned; it just so happens that Musk has committed an act so wildly illegal that it was just begging for a heavy sentence like "never run a public company ever again".
If post-Musk Tesla (which at this point, WILL happen) shifts further to a debt- and equity-driven model, and decides to get in league with said CDPI complex, then we'd know that what's left of its soul is completely broken, with the help of fellow board directors who simply don't care about things like "invention" or "innovation" or "not killing people through climate attack". They'll make plain old fossil-burner cars that ostensibly finance the "electric revolution", but ultimately more than offset it.
Combine that with the apparent cakewalk by Second Thief Justice Keggernaugh and the future's bleak, even with a perfect 11/6 vote for non-crazy.
1
You have to wonder if Trump tried to shake him down, Musk refused, and now he is paying for it.
2
If "integrity is the most important value" in his life, then why did Musk make the comment on Twitter, which he knew was a lie? It's true he made the comment, it's true the comment was false, and it's true that the stock price of the company was affected. How is the SEC wrong to go after him?
5
They're not but in Americans are blinded by celebrities which Musk is. For some reason Americans equate financial success with being right and good.
@Ms. Pea: Tell me how many shares Musk and/or his board sold after his "going private" announcement and I'll give you an answer to your question.
Isn't this how Russian, Turk, and Chinese governments operate?
1
Um, know. It's called rule of law, a basic tenet of which is that the laws apply to all equally, no matter who they are, how much you like them, or how much you hate oil companies.
3
The key thing here is that the crowd has fallen in love with the idea and the product and back the company as a result.
I think the product is good if the increasing quality issues can be resolved. But the inefficiency of the company doesn't support its continued existence, especially at these valuations.
I see some folks talking about conspiracy. Its not. Plain and simple, if you make material market movement events without evidence as a CEO, you will be held liable. No ifs and buts.
Think about who got hurt:
1) investors who went long on the idea and bought at $340-$380. Stock now trades <$280
2) shorts who got margin called and lost their bets not on any material financial report, but the statements of the CEO who didn't have any real documentation to make that statement.
In the end, he didn't help anyone except his ego. It was a stupid, childish move and unfortunately, as adults, he must be held to a standard and account for it.
4
He did it to whack the shorts. He was angry at how many investors had short positions in his stock and taught them a lesson.
3
He doesn't get to punish shorts that way. It's illegal. Having a short position is not.
7
While not excusing Musk's loose comments about going private, is this action really warranted? Not one Wall Street CEO get's sued by the SEC, let alone prosecuted after the financial crisis, yet Musk is now in the crosshairs? It can't be arrogance, Wall Street proudly leads that race. West Coast? The East Coast hates the fact that Apple, Amazon, Google, Facebook, Twitter - and Tesla and SpaceX, are so predominant. The NYT has an article, more or less daily, telling us all how evil they all are. More so than the modus operandi that gave us the financial crisis that remains in place today? The SEC is correct that Musk's comments harmed short sellers in Tesla's stock in the near term; I'm sure they've all made a killing now. As for Tesla's investors, let them make that decision.
7
Elon Musk has no one to blame but himself. This tweet was a big mistake, and I'm sure he knows it. That said, this is huge overreach by the SEC, and I can't help but think that Trump's strong support for the fossil fuel industry -- and industry clearly threatened by Tesla -- can't be playing a role in the SEC's aggressive position here.
Tesla builds amazing cars. I've been an owner since 2012 and they are far and away the best cars I've owned. A friend just picked up his Model 3 yesterday -- his first Tesla -- and he called and said "this car is amazing; I'm driving the future!"
Again, Mr. Musk should have never sent that tweet, but given the hypersensitivity of the market and the realization that Tesla's success and profitability should be measured over the longer term, again, this move by the SEC stinks of bias and an intent to send a message. We should all be rooting for Tesla, an American company putting thousands of Americans to work, producing great products, and helping to transform the automobile industry and the renewable energy industry. Tesla needs Mr. Musk. There are few transformational leaders who can successfully lead a company like Tesla. No, they aren't profitable yet (and it's easy to understand why, given their massive capex), but I don't doubt that they will be in the not too distant future.
15
It is amazing that the SEC-so powerless in the face of so many egregious acts decides to act now. In the aftermath of the 2006/7 meltdown almost no one was prosecuted. Activities that destroyed so many lives and wrecked world economies went almost unnoticed. The perpetrators of this list of crimes laughed on the way to the bank-no bonuses were disturbed. For many years one of my businesses involved interacting with various departments of the SEC and a number of SEC Associate Directors. During one such meeting they noted that 2 of them would be going before Congress shortly to testify on some issue and then they expressed their frustration noting that everytime a scandal arises -Congressmen makes speeches of how the SEC will follow up and then they cut the SEC funding to inhibit any real investigation. Why? Who would be investigated but their biggest donors-cannot allow that.
Now they turn their guns on one of the most creative and innovative business leaders we have had. But he is possibly a threat to the oil industry and actually many others. The SEC is going to attempt to ban this individual that has made mistakes-but did not profit from his recent utterances while those that profited and destroyed continue to flourish. This is so wrong that it reeks of the corruption that has become so endemic in our forms of government.
14
Tesla will be purchased from Musk and will go on. There are any number of suitable buyers who will operate more practically and without the passion that actually inhibits Tesla growth.
2
It is hard to imagine Tesla surviving without Elon Musk. At the same time, his behavior has been unquestionably irresponsible, illegal, and harmful to his investors.
This is not complicated stuff. The CEO of a publicly traded company simply cannot lie about something so important and so fundamental. Musk has to have known this.
Perhaps there could be a settlement where he remains at the company but with some degree of oversight or diminished powers. It could be difficult, though, to find a solution that will save the village without destroying it.
3
Elon Musk certainly made his fair share of mistakes, and that tweet was certainly among them. However, seeking him banned from being CEO or any other officer of the company (Tesla) for life would, in my opinion, a strong overreach, unless he or somebody connected to him profited directly from the brief rise in share price that followed his tweet. I don't recall that Mr. Musk sold any shares right after his tweet, and the SEC would certainly have mentioned it if they had evidence it occurred. The same agency (SEC) did not even ask for a lifetime ban in cases of convicted fraudsters (Theranos as a recent example). I would hope that this new, much more aggressive inforcement stance of the SEC will extend to those involved in more severe shenanigans in the financial industry - it has been sorely absent there.
6
I've always wondered why Musk is held up as some "brilliant visionary". Every one of his "brilliant" ideas is just a rehashing of things other people invented long ago. Electric cars, space rockets, solar powered buildings...none of it new. He makes headlines by declaring he'll find a way to zip people across cities in underground tubes, as if millions weren't already doing exactly that.
4
@Jomo Yes, these things were invented long ago, but only Musk has been able to get these things to take root and thrive. The same was said about Steve Jobs, but it takes a visionary leader like Jobs and like Musk to make these kinds of things real and viable.
3
@JB
'only Musk has been able to get these things to take root and thrive'
No.
Electric cars existed, just no one has invented a good battery to keep them running as long as gas cars.
Space rockets existed. He is way far from reaching NASA or Russian levels. Even NK has fired more than him.
Solar Powered buildings. They do not exist. All of them take electricity from the grid.
The super fast tube still does not exist, it is prohibitively expensive and might never come to fruition.
And he has a company worth 50B based on the cash Obama gifted him, because he is incapable of turning a profit, or worse, making affordable cars and vast numbers.
Yet his fans will never see this.
Elizabeth Holmes also had such fans, and was a billionaire too, until her sham was disclosed. Give Musk a few weeks, his smoke and mirrors are due for a correction real soon.
@AutumLeaff "The cash Obama gifted him". Please do your research. That fund was in place before Obama took office, and it loaned money to hundreds of companies, most of which turned out to be good investments. If you actually do your research, you would find that Tesla repaid these loans in 2013.
And are you really comparing Musk to Holmes? Holmes promoted a product that simply didn't do what she claimed it could, which made that a true sham. Teslas are all over the road, produced by 2 very real factories in CA and NV, owned by owners who overwhelmingly love their cars, supported by real stores and service centers in almost every major city, and thousands of high-speed superchargers in every part of the US, Europe, Asia and Australia. And if what they do is so easy, why did over 500K people put down $1000 on a car they never saw in person, let along test drive? When is the last time anyone stood in line for an MB or a Porsche? Audi just announced its new electric SUV. Maybe it will be good. But I sure didn't see anyone waiting in line for it.
Let me know when all of the competitors to Tesla and SpaceX catch up to them. Maybe they will in years to come, but it won't be fast and it won't be easy.
Tesla has met it's goals for production on the model 3. They have completed building the manufacturing needed to accomplish this and have reduced their spending tremendously. The SEC is too late to stop them. Check the next few Tesla quarterly filings with the SEC, you will see profitable quarters in Tesla's future.
Oil is the biggest and most profitable industry in the history of mankind. Of course, it was not going to be easy to kill the beast that is killing us. Money is the true American God and our current government including the SEC is controlled by those who are being paid to service their owners.
As far as Musk being integral to Tesla's operation, he is not. He is not the technical genius everyone supposes. People who are familiar with electric vehicle technology know he basically uses technology that has already been developed. All he ever did was know that the technology was ready and maintained an effort to fund the building of a company. Whether he is removed from a leadership role or not really doesn't matter, since he was always only just a talking head. The technology and business expertise at Tesla does not reside in Musk.
The single most important thing that Tesla can do to assure they are financially successful for years to come is to lower the cost of batteries through technical improvements and building more battery manufacturing. They are the only car company that maintains an ownership in battery manufacturing, which gives them an advantage.
3
@Chris
I agree with your first, second and fourth paragraphs, but on the third you are only half right.
It is true that Tesla has only been refining electric cars first invented over one hundred years ago. However, as a technologist myself, it is clearly evident the Elon is able to lead a team from the front by synthesizing the details into a whole that it greater then the sum of its parts.
The only electric car more compelling than a 2018 Model 3 will be a newer one. ;-) Let my know if you would like a ride in my awesome Model 3. :-)
1
@John - I think the problem with Musk is that humans can overload, and with him trying to build cars, rockets, battery storage and tunneling systems and solar roofs, he's burned himself out to the point where a year off might do him a lot of good - otherwise, we get a solar-roofed rocket launching in ludicrous mode up to space where it smokes pot and takes libelous potshots at random individuals around the world.
At a minimum, and like Trump, his constituency would be better served if some of the spontaneity and freewheeling style (on Twitter and TV for both) would be stifled a bit.
Regarding the cars, enjoy yours, I enjoy not owning a car but also look forward to cleaner air as the electric car revolution Musk has undeniably hastened kicks into the phase where everyone's selling electric cars. Like Chevy:
https://pluginamerica.org/how-do-chevy-bolt-and-tesla-model-3-compare/
Once carmakers get used to the greatly-simplified platform electrification provides, I think we're going to have a remarkable change in car design and features - plus the greatly reduced maintenance needed, and the ability to enhance the grid with all those batteries plugged in.
Musk is a genius...but that does not make him a great businessman with regards to daily operations. He has already made several fortunes because of his vision.
Be a visionary. Hire someone else to manage the business. The genius of Warren Buffet is that he buys a company and then hires the right people to run it on a daily basis.
1
He needs to grow up.
Weed is legal in many states, including CA. But that little stunt where he did a radio interview and smoked a joint was immature in the extreme.
Any Board of Directors would rightly lose faith in a leader who did this.
1
And this is precisely why Larry Paige and Sergey Brin hired Sundar Pichai and Ruth Porat to run the show at Google. The world needs dreamers to get ideas off the ground, but it also needs brilliant managers to keep the dream alive.
Tesla sorely needs a COO that knows how to get the manufacturing working, while keeping Mr. Musk on task. While the power wall, solar roof and autonomous semi are all great ideas, they have distracted from the goal of creating an affordable electric car.
19
If leaders can be stripped of their office for unfounded tweets, then why is Trump still in office?
42
It may be different in New Zealand. In the USA, politicians can say almost anything they desire. It is in our Bill of Rights. Business execs like Mr. Musk can also speak on every topic they desire except when it touches on publicly held stock for which they are the senior officer. We do not have unlimited commercial free speech for such individuals. In those limited situations, their statements have to be truthful or least the execs must have some evidence they felt them to be true. Not only were his first statements actually untrue, but subsequent statements by Mr. Musk clearly indicate he knew them to be untrue. The SEC had to act.
Lie to investors? That’s a crime.
Lie to your workers? To consumers? To children and teenagers? To men and women? Make that paper, booboo.
The capitalists live in a different world than we do. It’s time we made those worlds collide.
16
A CEO of a publicly traded company making false, material claims about his company is a big no-no. Possibly the biggest violation the SEC needs to police. Every CEO is trained on what he/she can and cannot say in any public forum. Musk made a stupid, arrogant, rookie mistake in the most public way possible. There is no excuse or explanation to get him out of the mess that he created for himself and possibly speaks to his fitness to run Tesla.
10
@RGK. I agree with your point. It’s just after working in corporate America & meeting Musk & the President of Space X, personally, I’m more than willing to say fine him, maybe bar him as President of Tesla for a period & move on! So many men walked away from out right financial fraud, that stole pensions & retirement savings from Americans in 2008 ... I just don’t get the SECs. This is like Martha All over again...cheap political showmanship...keeping us distracted from the real cheats that the SEC ignores. They do vast damage to middle American wealth. Musk has not!
3
What a travesty! Yeah, this the same SEC that failed to spot Bernard Madoff when handed the case on a silver platter by Harry Markopoulos. I am truly beginning believe there is somewhat of a conspiracy out there against this man. And why not? He is challenging the largest car companies isn the world and the oil companies who fuel their cars. Frankly this is no surprise to me. The system is rigged for those in power. The same folks who bought his the Great Recession and who received TARP, are responsible for this. None of then ever spent a day in jail for driving the economy over a cliff. In the past 10 years I have lost all my faith in US capitalism as many have.
29
Past failures are no reason for the SEC to not do its job now...
1
@Mike L
Conspiracy? Do you know how to read or did your phone type this comment for you?
The man's tweets speak for themselves : Market manipulation, plain and simple, by a man who should know better in the role he holds. Musk is glaringly unfit to be CEO of a public company and rightly deserves what's coming to him.
#WillfulBlindness
2
Let's face it. Tesla has been in existence for some 15 years and has never shown a profit. Musk has elevated a start up to unbelievable heights based on promises, smoke and mirrors.
He has not delivered on his promises and, from what I can read, never will. As an example, the model 3, price set originally at $35000 now sells for at least $50000, if you can get one. Anecdotally, I understand many have not been delivered due to numerous defects and those have are shoddy. He has not come close to his projections of production. Also, other companies that know how to manufacture are getting ready to get into the electric car game.
The SEC is right to bring this to light if only to give the investors time to bail out if they have enough sense to do so.
5
Care to comment on AMZN, another company that operated for years without a profit?
9
@D.A.Oh
As has been said many times, "Let the chickens come home to roost". Unfortunately, the market sometimes does not self correct and a watchdog authority must step in.
Amazon is not drowning in debt. Also, Bezos has not publicly violated any securities laws that I'm aware of...
4
A cabal of Wall Street executives engaged in exceptionally questionable activities drive the largest economy in the world over a cliff. They are rewarded with the largest public bailout in history, complete with multi-million dollar "bonuses" and have nearly all of the regulations imposed upon them removed after just a few years.
A single guy bent on improving the state of humanity makes a one stupid tweet borne of frustration over Wall Street gamblers betting against his company, and the government wants to remove him.
I'm supposed to get upset about athletes "disrespecting" the flag? Pretty hard to feel anything but contempt for the so-called government we're forced to suffer today.
62
@Jerry Smith
I can tell from your lack of perspective that you're clearly unqualified to comment,. Musk's problems go a lot further than "makes a one stupid tweet borne of frustration over Wall Street gamblers betting against his company". He has overpromised and underdeliverd for years, so it's very normal that he feels the pressure. If you an investor you should rejoice in this decision, because it means someone qualified will relieve Musk of a role he's amply demonstrated he's incapable of holding.
1
Why not JP Morgan/Chase getting sued too?
14
When will the SEC look into the Trumps' trading activity in conjunction with all the times the so-called president has manipulated the market with his provable lies?
24
@D.A.Oh thank u! Didn’t he even attack Boeing, via twitter, as a candidate, based on a non-public, defense briefing concerning the costs of an airplane? And he became President!
Just look into the activities if others in the administration. People working in the deep state have their investments in hedge funds to take advantage of every opportunity their activities create.
The witless arrogance of the super-rich was on full display in Elon "420-a-share" Musk's Twitter feed last month. 420, eh?
In a time of rampant federal gov't dysfunction, it brightened my morning a bit to hear that at least one agency, the SEC, hasn't lost its marbles.
5
I don't care what kind of pressure he's been under. No CEO can skirt the rules as he has. I've admired him in the past, but this is a serious violation of investor relations regulations.
9
Sadly, Elon Musk's problems have been hiding in plain site for a long time. How did 'sophisticated investors' put money into a firm that by every metric is badly run and whose goals are so diffuse and unintegrated they speak not to a visionary but to a three year old with ADD wandering around his playpen?
It has long been clear that Tesla could not survive Musk's erratic leadership. The failure to see that means the sophisticated investors in this tragedy or the those who shorted Tesla, not the fools who supported it.
4
So how much money are Tesla investors going to lose today thanks to the SEC?
But the day traders and shorters will do great!
14
TSLA down 13% in the pre-market.
@D.A.Oh It's not the SEC's fault that Musk violated securities laws. That's why investors are losing money.
1
Thanks to Musk, you mean.
"The S.E.C. approached the Tesla chief with an offer to settle the case, according to a person familiar with his thinking, but he refused to negotiate, adamant that he had done nothing wrong."
Typical American justice: the ego of the judges/regulators is more important than anything else. And you seriously hurt those feelings when you don't consent to sign your rights away in some "plea bargain" but force them to make a statement that might be overturned later on.
Sure, "funding secured" sounded too definitive. But any investor worth his salt knows Musk and knows that "secured" can mean may thing when it isn't clear whether all the details have been negotiated.
6
@Wim Roffel I would like to respectfully disagree. I think the notion that "any investor worth his/her salt" would be able to clearly understand that "funding secured" may in fact, in some instances, not explicitly mean funding secured is unreasonable. Twitter is no longer a place for "the young kids". It is a legitimate, verifiable and respected platform for instant communication between public figures and the world at large. "Funding secured" leaves no wiggle room. The article details that not only was Musk lying when he said this, he wasn't even anywhere near securing funding. He was having preliminary discussions about the possibility of going private. This is bad. You are right that American justices have large ego's, but this isn't a case where those ego's are reaching for crimes using ambiguous legal loopholes. This is plain as day.
2
@Wim RoffelI am an experienced investor with 20+ years in banking. “Funding secured” means that all of those details have been worked out. His second tweet was that only the shareholder vote remained. That means that a proposal is ready to be voted upon. Neither statement was true. Both were wishful thinking with no knowledge of how the process works. A CEO should know some basics on corporate law.
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Where was the SEC when the bankers defrauded the country and walked away with billions leaving us with a recession and bailed out banks?
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I'm a former MBA student and I did a presentation on Tesla a couple of years ago. While their cars are interesting and have good styling, Tesla the company is another issue.
How can a company that makes a few hundred thousand vehicles be worth more than a company that makes millions of cars in the same time period? This suggests the stock price is detached from the actual financial fundamentals that other companies face and is largely based on puffery from someone on the executive board.
No automobile company in the United States produces 500,000 cars in a single plant. Why does Tesla think it can do something better than other companies who have decades more experience building cars?
Fads do not last, while trends do. Tesla's success is built around the charisma of one person. Companies like this suffer once this person is gone. Think Apple in the 90s without Steve Jobs or Starbucks without Howard Shultz in the early 2000s.
Now that Tesla has proven that there is a market for high-end electric cars, other car makers are coming for that market. I don't think that Tesla can compete against BMW, Mercedes and other carmakers in the long term.
This evidence and more proves that Tesla is not a good long-term bet for an investor. The cracks are already showing and it's time to get out now if you are invested.
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@C. M. Walker:
I'm not as smart as you are, but methinks the replacement of internal combustion engines with electrical ones no fad. Tesla has defined the electric vehicle, like Apple defined the smart phone. Tesla is not Musk, but Musk's vision, and that vision will endure.
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@Jerry Smith
This is nothing about smarts, but a thoughtful examination of the fundamentals of a company based on historical information.
I call Tesla a fad because from the data that I found that many people buy their vehicle because they are slightly different the BMWs and Audis they already owned, and not because it is an electric car.
Plenty of companies have suffered or failed after the departure or death of the leader with vision. Ford Motor Company suffered after the death of Henry Ford. Chrysler nearly failed after the departure of Lee Iaccoca, and DeLorean failed after its founder was busted for cocaine trafficking.
Defend Tesla if you must, but I would more accepting of your argument if not for your sly insult.
What has happened to the world if one cannot make a non-emotional, fact based argument without being insulted by someone who lets emotion overrule the facts presented by another in a thoughtful manner.
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@C. M. Walker
"How can a company that makes a few hundred thousand vehicles be worth more than a company that makes millions of cars in the same time period?"
The same way that a company that makes nothing (facebook) worth more than all of the automobile companies combined.
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Looking forward to the FEC banning Trump, as well.
Unless this is just an attack on someone Trump doesn't like, in which case the FEC ought to be investigated.
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FEC is not the same as SEC...
Musk is a visionary running into a world that doesn't think, or act, the way he does. What he needs now is Apple-type money, which will allow Tesla to survive while he focuses on new ventures. Visionaries don't make good managers. Musk will see the light sooner or later, my guess is sooner.
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@Kenneth Saukas What he needs instead of Apple-type money, or in addition to that, is a good manager to run Tesla.
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@Kenneth Saukas Tesla doesn't need any money, they are going to be profitable in the coming quarters. They have reached their production goals and will spend earned income on future production. They have reduced spending because their plants are built. They are selling cars faster than they can make them.
Annoying Musk fan boys rushing to defend their egotistical man-child 'inventor' incoming in 3, 2, 1...
But seriously, Musk is erratic and thinks the rules don't apply. I can understand not wanting to impede progress (I didn't pursue a PhD in electric motor design because I disagree with Tesla's goals), but regulations exist for a reason, whether it's to protect investors or keep workers safe (something Musk doesn't have a great track record on). Regardless of what the SEC does, I think Tesla's board would be well served removing Musk, either temporarily or permanently. Given the company's dire financial situation, they need someone with a cooler head at the helm. Hopefully someone who won't demand 80 hour weeks from his workers, prevent those workers from unionizing, or ignore OSHA regs.
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@Angry
And what was this but a detractor rushing in? ;-)
I am an actual investor in TSLA (and delighted Model 3 owner of four months if you must know) that appreciated the 'considering' tweet which kept me in the loop.
I also appreciated reversing course that allowed small fish investors like me to stay invested for the long term.
There is no dire financial situation which will become obvious in a few days.
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Mountain of debt coming due requires a high share price to pay with equity and conserve cash which is being burned through rapidly. Share price down 13% pre-market. What happens in "a few days" to negate these facts?
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@random Tesla is no longer burning through cash since they have completed construction of their manufacturing. Every car that comes off the assembly line is already sold, and at a tidy profit too. Your simply repeating something that is no longer true.
After all the subsidies and con artistry this guy has leveraged, all I can say is: "it's about time."
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@Mark
All unsubstantiated allegations.
Since when is landing and reusing rockets a con?
In the end the truth and goodness will prevail.
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@Mark If he's a con artist, he's one that's produced some amazing cars, backed by a service center network and high-speed charging network that Tesla itself built. You might want to drive a Tesla and you might then change your opinion.
Elon Musk is clearly suffering from mental illness and I can't help but wonder if his pot intake triggered underlying tendencies. I've seen it all too often. He needs help. I hope he gets it.
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We are living in an upside down world. While Mr Musk seems at the very least unstable, the exit I’ve who currently makes false and misleading statements is the President. At every level of society people are being stripped of their positions of power often for much less consequential or less predatory behaviors than those the President has ceaselessly exhibited in public. While I have no doubt that Musk —and Kavanaugh— should not hold positions of authority, I can see how to them and many others the extraordinary hypocrisy of our times is mind-swerving
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Since when does this administration and esp the SEC care about executives tweeting only truth from their tweeters? The irony is think.
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There won't be Tesla without Musk.
The talking heads on CNBC rationalize they could move him to the back office. But face it, Musk craves control and publicity. The evidence goes beyond Tesla. SpaceX, Giga factory before Tesla merger, hyper loop and even his Boring company.
So here lies the corundum.
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As it turns out, SEC was giving Musk a sweetheart deal and he rejected it... And the board didn't do anything either. This is beyond crazy and bad corporate governance
R.I.P. Tesla, maybe a great car but very poor management
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He should have taken the SEC deal. He could have done what the Starbucks founder did. Go off for 2 years and then return. Instead, his pride would not allow him to make a face saving exit. Now he’ll spend the next two years fighting the lawsuits. I wonder who his lawyer is. Probably himself. Bad move.
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The S.E.C.'s argument is interesting; it seems to apply to donald trump as well as Elon Musk.
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@HW Keiser
The United States Government is privately held, not publicly listed. SEC doesn't have jurisdiction.
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@Birdy read the post, it deals with logic, not jurisdiction. BTW, public bond sales and equity trading in Fannie and Freddie belie the argument that the USG isn’t a publicly listed entity.
Now Musk needs to take Tesla private and tell the SEC To pound sand. It’s a great product. Inspirational. Who benefits from a weakened Tesla without a Musk? Tired old Detroit auto “makers” who might as well be selling whale oil. No Ford, Dodge or Chevy is on my list. But I do have a Model 3 coming. Really excited about that too.
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Two points.
If you run your company like American Motor Corporation... Well you'll end up like AMC, a side note in movie culture.
Second, what Musk did was wrong so the penalty is fine, but here is the point. Why isn't the executive of the U.S. government held to the same standards. Most of his tweets can be characterized as false misleading or inaccurate? And that is generous.
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@David Meli
No one is short-selling the President.
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@Beaconps I am!
I see some parallels here to Steve Jobs.
Jobs too was a brilliant visionary and creative entrepreneur, but he was booted from Apple (albeit not by the SEC) the first time around because he was either too young and immature to properly run a company, or his ideas at the time were too forward looking for shareholders and board members to embrace. Or maybe it was a combination of both.
Some of the problems with Musk's cars seem to mirror problems with early Apple products. Anyway, Jobs was shown the door only to later return and the rest is history.
I think if the SEC does ban Musk, some years down the road there will be an appeal and he will be allowed to return if Tesla and its shareholders deem that important. However, only time will tell if Musk will be like one of his Space X rockets that spectacularly returned to Earth, or one that blew up shortly after take-off.
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@JHMYou are comparing apples to oranges. Jobs was focused; this guy is all over the map.
Plus Musks' statements could have been interpreted as a way to manipulate the stock via insider trading.
Time for him to go....
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Steve Jobs rightly made the point that exceptional people and exceptional companies should not be regulated because it stifles innovation. Let’s stop aiming for average and move on.
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Elon? Is that you?
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You can avoid a lot of regulation by staying private. Once you agree to take investor's money, you give up some control and are subject to more regulation to protect those investors. Those are the rules.
And to Job's comment - all regulations? Safety? Environmental? Collective bargaining? Sure you want that? And, one last question..who gets to determine what companies are "exceptional?" Some government agency? If so, think who might get out of such burdensome regulations in the current administration...
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@From Where I Sit LOL. Because no regulation for the tech sector is already working so well, right? Facebook, Google, and all the "super geniuses" totally predicted the impacts on society with perfect foresight. Sit down, Vladimir.
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Elon-- why did you not settle? SEC was looking for an out, they gave you one. They can't have CEO's of publicly traded companies sending out blatently false information like that to manipulate the stock price of their company. You hate short-sellers, great! But you can't do that.
Start producing cars... that work.. and don't catch on fire or crash themselves into walls. Then maybe that stock price won't seem as wildly absurd for the actual results being produced.
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I'm intrigued by how many people focus on "funding secured". To me the operative word was "Considering". In my mind there's a big distance between considering and decided and this whole business strikes me as a bit of a beat-up. Even if funding was secured, the tweet does not say the company was being taken private, only that they were thinking about the option.
I don't think Musk should be held responsible for people who infer meaning that is not explicit. Accepting a deal with the SEC would be tantamount to admitting guilt. That said, I'm more convinced than ever that nothing good comes from Twitter.
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I see a few Teslas driving around my area and am always a little jealous. (Just a little.)
Little did I know they all catch on fire or just never work in the first place.
My eyes have deceived me once again! Truth isn't truth!
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He might have been ok if he had stopped at the considering part. But he gave a specific share price and declared that he had funding secured, which were false statements and strongly implied more surety than was the case. That is information that investors acted upon.
This is why corporate communications at most companies are reviewed and screened so carefully. You cannot control or count on how a message will be interpreted by various people ( per your original comment) so you have to be clear and factual.
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Musk and Tesla want to end the world's suicidal fetish with fossil fuels. Is it a coincidence that the oil-soaked Trump Administration wants to end Musk?
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And Musk was OK with selling his electric car company to the oil-soaked Saudi's?
So to protect the Tesla shareholder, we have to oust the person that is the company's life force. Reminds me of that quote from the Vietnam war, "To save the village, we had to burn it".
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Over a tweet at that. Meanwhile POTUS has posted continuous lies and misinformation.
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@RM Doesn't mean he's exempt from complying with (basic) securities laws.
Some people bought shares after his tweet caused the stock price to jump by 6%.
The "I'm-a-genius-so-rules-don't apply-to-me" defense is getting tired.
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@Robin
The SEC announcement caused the stock to fall by an equivalent amount in after hours trading.
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Whom Wall Street wishes to destroy, it first gives internet interviews...
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