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Tesla Faces U.S. Criminal Probe Over Musk Statements

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Re: Tesla Faces U.S. Criminal Probe Over Musk Statements

#61

Post by emodendroket »

beaconstudios wrote: post #46
chooseaname wrote: post #28

Earlier quoted context omitted.

So, anyone can get away with a crime if they're overstressed? or just Elon? > His idea of "secured" is simply different from the SEC definition ... He is the CEO. He's not allowed to have a different definition. Words mean things. That's how we communicate.

> So, anyone can get away with a crime if they're overstressed? Are you putting words in my mouth on purpose? I'm not arguing that he shouldn't be investigated. I'm arguing that "trying to screw over short sellers" is not the only and "obvious" reason why he could have made the tweet.

I know whenever I'm stressed I go post falsehoods on my public Twitter account to blow off some steam.

Re: Tesla Faces U.S. Criminal Probe Over Musk Statements

#62

Post by aaomidi »

beaconstudios wrote: post #46
chooseaname wrote: post #28

Earlier quoted context omitted.

So, anyone can get away with a crime if they're overstressed? or just Elon? > His idea of "secured" is simply different from the SEC definition ... He is the CEO. He's not allowed to have a different definition. Words mean things. That's how we communicate.

> So, anyone can get away with a crime if they're overstressed? Are you putting words in my mouth on purpose? I'm not arguing that he shouldn't be investigated. I'm arguing that "trying to screw over short sellers" is not the only and "obvious" reason why he could have made the tweet.

Intent may not necessarily matter.

Re: Tesla Faces U.S. Criminal Probe Over Musk Statements

#63

Post by beaconstudios »

aaomidi wrote: post #62
beaconstudios wrote: post #46

Earlier quoted context omitted.

> So, anyone can get away with a crime if they're overstressed? Are you putting words in my mouth on purpose? I'm not arguing that he shouldn't be investigated. I'm arguing that "trying to screw over short sellers" is not the only and "obvious" reason why he could have made the tweet.

Intent may not necessarily matter.

for the investigation, no it probably doesn't. But that's not what I'm arguing, and I don't see why people think it is.

Re: Tesla Faces U.S. Criminal Probe Over Musk Statements

#64

Post by [deleted] »

chollida1 wrote: post #5

The sad piece of karma in all of this is that Musk tweeted in an effort to destroy the shorts. His tweet turned out to: - give the shorts a big dip in his stock, - an investigation by the SEC - an investigation by the DOJ - the backing off of a deep pocketed investor in the Saudis - Him potentially being personally liable, which would mean having to step away from SpaceX and Tesla if he was found guilty of fraud. Thi…

[deleted]

Re: Tesla Faces U.S. Criminal Probe Over Musk Statements

#65

Post by aslkdjaslkdj1 »

beaner wrote: post #33
TAForObvReasons wrote: post #11

Earlier quoted context omitted.

> All to screw with the shorts, who really have no power whatso ever to hinder Telsa. If Tesla wasn't burning through cash and didn't need an ever-inflating stock price in order to keep the house in order, the shorts would be powerless and in all honestly would back off. The only reason the shorts have power is that Tesla's future is currently heavily dependent on its stock price.

Can you explain how that works? I thought that once a company's stock was listed, third parties just trade it amongst themselves. How does that activity affect Tesla in terms of how they're able to execute?

There's a clause in Tesla's debt that if the share price is >$360, they can pay their bond notes with stock shares. If it is <$360, they have to pay their debt payments in cash. This obviously has a massive impact on Tesla's already precarious cash position.

Re: Tesla Faces U.S. Criminal Probe Over Musk Statements

#66

Post by MrEfficiency »

S_A_P wrote: post #53

Sometimes its possible to care so much that you lose sight of what is important. This happened to Elon. I think this will be a case study someday about CEO ethics. I found it very interesting that when he was on the Joe Rogan podcast he had so much to say about social media, and none of it was complementary. How he did not see the dichotomy of his twitter use and this situation strikes me as humorous. I feel like Elo…

Ive said really stupid stuff on Twitter and I lost fans as a result.

I cannot explain myself in only a few hundred characters, especially when people dont click links, or only see a small portion of the situation.

I did learn my lesson in my 20s.

Re: Tesla Faces U.S. Criminal Probe Over Musk Statements

#67

Post by PakG1 »

dsfyu404ed wrote: post #44
scotchio wrote: post #32

Another day, another excited slam piece headline against Tesla. Tesla's Nov 7 Earning Report must be good... In all seriousness, no idea what Elon was thinking with that Tweet. Gut says, long term Tesla will be fine and little will to come of this investigation.

>Gut says, long term Tesla will be fine and little will to come of this investigation. Or this could be their DeLorean moment. People's guts are notoriously bad at predicting the future.

Out of curiosity, what was the DeLorean moment? I know DeLorean didn't succeed in the long term. But what was this "moment" you're talking about? Google gave me nothing.

Re: Tesla Faces U.S. Criminal Probe Over Musk Statements

#68

Post by r2d2-c3po »

simias wrote: post #36
zwerdlds wrote: post #22

Earlier quoted context omitted.

Shorts drive the price down, making it more expensive for the company to borrow from the market by selling stock. They have to sell more shares to receive a similar amount.

I obviously lack a piece of the puzzle here, let me see if I get this right: a short means borrowing stock, selling it then rebuying it later (betting that the price would have fallen in order to turn a profit) before giving it back to its original owner. I suppose if everybody shorts at the same time the huge amount of stock being sold could drive the price momentarily down, but then again the opposite happens when…

They wouldn't have to buy it back immediately. Short sellers would borrow the stock from a long and pay a predetermined interest rate for however long they're borrowing it. They technically don't have to rebuy the stock unless they get margin called (if the collateral posted is no longer deemed sufficient for the counterparty to allow the borrowing position) or need to close out positions because of some risk tolerance threshold being met. Usually when this happens to a bunch of shorts at the same time they must all rebuy, driving prices higher, which is called a short squeeze, but it is usually determined by someone cutting losses on a short position or positive news coming out driving prices up.

Re: Tesla Faces U.S. Criminal Probe Over Musk Statements

#69

Post by abalone »

harryh wrote: post #4

There are a lot of things to respect about Musk. But he lied on twitter in a direct effort to cause financial harm to people shorting Tesla stock. You can't do that. He should go to jail.

This is a massive oversimplification. Musk may be in peril but this is not as cut-and-dried a case of fraud like you make it seem. Consider this recent comment from the SEC:

“When you talk about fraud,” [Jina Choi of the SEC] answered, “you’re talking about a state of mind, you’re talking about mens rea. We call it scienter. You have to do something with intentionality. The idea of just making a misstatement doesn’t necessarily rise to the level of fraud."

Misstatements can “be the first step to fraud,” Choi had added. “But generally, when we talk about fraud the F word, I think we are talking about a state of mind that’s a little bit higher than that.”[1]

That telegraphs a pretty lenient stance on misstatements that aren't completely fabricated. And there were actual serious negotiations happening here. That's not in dispute.

Without question, Musk made a misstatement. But what was his state of mind? Was there intent to deceive, or was he merely overzealous in his interpretation of the negotiations? If he can argue the latter then it may not rise to the level of criminal fraud.

[1] https://techcrunch.com/2018/09/13/a-tesla-investor-says-he-w...

Re: Tesla Faces U.S. Criminal Probe Over Musk Statements

#70

Post by _jal »

pathseeker wrote: post #34
jchw wrote: post #23

Earlier quoted context omitted.

A criminal investigation being opened is literally part of due process.

The big announcement is what OP is referring to.

Allow me a moment to note the irony of complaining about big announcements in this context.
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