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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

#331

Post by Timmah »

gamblor956 wrote: post #310
Timmah wrote: post #154

Earlier quoted context omitted.

Such a great land we live in where a CEO is investigated within weeks by criminal justice agencies for making a few tweets, but during the 2008 crisis other kinds of fraud (approving loans without verifying income, robo signing of "contracts") that cost people jobs, homes, and even lives, got CEOs unprecedented bonuses and billions in interest free loans to keep their ships afloat. God bless the USA.

The CEO in question may have violated multiple state and federal laws. The problem during the crisis was that many of the things you listed weren't illegal because the laws and regulations that would have made them illegal had been rescinded in the years or decades prior. Thus, the CEOs got to keep their jobs and their bonuses and their freedom because even though what they were doing was highly immoral, it wasn't il…

Laws that exclusively protect shareholders. That's the problem. And most of the population doesn't have the resources to lobby Congress to roll back those laws the way financial laws were rolled back. The fault for that inequality lays squarely on our nation.

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

#332

Post by JBReefer »

lgeorget wrote: post #231
baddox wrote: post #219

Earlier quoted context omitted.

Although that is definitely an oversimplification (there are plenty of limitations to freedom of expression), why is your description particularly odd or difficult to understand? If an executive at a public company makes misleading public statements with the intention to cause certain transactions (which may or may not be the case here), that's a pretty clear financial crime with clear victims. I don't see why jail t…

Well, of course I realize that I'm oversimplifying and exaggerating but my point was that I have the impression that messing with money is a much more serious problem than messing with people in the USA.

saying mean things doesn't hurt people - even if they're really horrible, they're just words. Providing guidance that is false or intended to hurt people, like Elon's tweet, is fundamentally different.

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

#333

Post by JBReefer »

tedunangst wrote: post #271
lgeorget wrote: post #140

Earlier quoted context omitted.

I guess I'm a bit off-topic but sometimes I really fail to understand the USA culture. You can make the most outrageous and racist comments because of "freedom of expression" but making speculators lose their shit with a couple of tweets is a "textbook crime" for which you should "go to jail".

Where is it different? Which countries punish racist comments but not fraud?

These days, England.

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

#334

Post by bvi »

Asparagirl wrote: post #158
whatok wrote: post #29

Earlier quoted context omitted.

In addition to what other replies have said, Elon also has pledged some of his stock in order to secure personal loans. He will have to fund margin calls or sell his stock if the stock falls below a certain price.

THIS. Elon is the largest Tesla stockholder, but he has taken out huge loans against that stock. If the stock price of TSLA falls below about $230/share (there is some confusion about the exact price, but it's widely believed to be somewhere around there) his stock could all be sold to cover the loan, which would suddenly dump the stock price even further, or he could be forced to post more of his stock as collateral…

> Elon has used those loans to finance a rather extravagant lifestyle.

How does this actually work? His stock is just his collateral for those loans, which can be transferred if he defaults on payments?

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

#335

Post by yread »

onetimemanytime wrote: post #268
Asparagirl wrote: post #158

Earlier quoted context omitted.

THIS. Elon is the largest Tesla stockholder, but he has taken out huge loans against that stock. If the stock price of TSLA falls below about $230/share (there is some confusion about the exact price, but it's widely believed to be somewhere around there) his stock could all be sold to cover the loan, which would suddenly dump the stock price even further, or he could be forced to post more of his stock as collateral…

Wow! I Googled and there it is: *"At the end of 2016, Musk had 11,420,723 shares pledged as collateral. At the end of 2015, it was "4,000,000 shares of which are pledged as collateral to secure certain personal indebtedness owed to Morgan Stanley."" https://www.inc.com/erik-sherman/1-reason-why-elon-musk-migh... His lifestyle isn't the big problem, IMO. He's not Johnny Depp, he's way richer. That money most be going…

Does that mean his debt increased by 7M shares? At ~250 a piece? Almost 2B$? Is that what he actually owes or is it more like a line-of-credit up to 2B$ He's burning money faster than Tesla!

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

#336

Post by delecti »

nickik wrote: post #328
delecti wrote: post #227

Earlier quoted context omitted.

I think Tesla's failure at scaling their manufacturing is pretty good evidence against your claim. There are other brands making EVs without the same issues as Tesla.

They have scaled their manufacturing quite well be now. They are not top of the line but the have a real mass production car. Have you actually looked at the production numbers of those other EVs? Because there is nobody outside of Tesla that has mass produced EV and even more imprtantly, to do it with profit mergin per car. Teslas are the Top 3 most sold EVs in the US market. The model 3 is by now equaling the sum o…

It's impossible to separate the higher demand for Tesla from their higher sales. It's possible that their sales are higher because they can make more, but it seems more likely that their sales are higher because demand for Tesla is so much higher.

What's clear is that we know Tesla has had (and may continue to have) issues with production. Meanwhile I can't find anything suggesting there were any production issues with the Chevy Bolt or Volt or Nissan Leaf, the other models I'm familiar with. I'm not familiar with any of "iPace, i3, Tycan" so I don't know what to look up there to see if there were comparable issues with them.

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

#337

Post by Hypx »

onetimemanytime wrote: post #268
Asparagirl wrote: post #158

Earlier quoted context omitted.

THIS. Elon is the largest Tesla stockholder, but he has taken out huge loans against that stock. If the stock price of TSLA falls below about $230/share (there is some confusion about the exact price, but it's widely believed to be somewhere around there) his stock could all be sold to cover the loan, which would suddenly dump the stock price even further, or he could be forced to post more of his stock as collateral…

Wow! I Googled and there it is: *"At the end of 2016, Musk had 11,420,723 shares pledged as collateral. At the end of 2015, it was "4,000,000 shares of which are pledged as collateral to secure certain personal indebtedness owed to Morgan Stanley."" https://www.inc.com/erik-sherman/1-reason-why-elon-musk-migh... His lifestyle isn't the big problem, IMO. He's not Johnny Depp, he's way richer. That money most be going…

https://www.forbes.com/sites/jimcollins/2018/05/18/musk-has-...

It's close to 13.775M, and growing. The worrying sign is that the company is losing tons of money at the same time. As the author of that article writes:

> So, Musk has steadily increased his personal leverage to a company that has been steadily increasing its financial leverage. That's a double whammy. It's too much financial engineering. In following other companies I have experienced situations in which a CEO faced margin calls as his company's share price dropped. It is not pretty, and obviously adds incremental selling pressure to an existing decline.

It just seems inevitable that the colliding forces of an overleveraged CEO running into an overleveraged company will create some kind of financial implosion.

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

#338

Post by hcknwscommenter »

qaq wrote: post #168
refurb wrote: post #118

Earlier quoted context omitted.

Shorts drive the price down Not on their own they don't. You can go and short Facebook right now and it won't move the price at all.

Sure it does short 20% of FB float it will sure move

I'm not so sure. What direction will it "sure move" if you short 20% of FB float? You have to borrow a stock to short it from someone, so the stock that you short is not actually sold just lent.

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

#339

Post by dragontamer »

Proziam wrote: post #323
JumpCrisscross wrote: post #215

Earlier quoted context omitted.

> if he's able to show he really thought funding could have been secured but fell through "Funding secured" and "funding to be secured" are materially different terms. The point of "secured" is it's been bindingly, definitively agreed upon in a way that makes falling through very, very difficult. His best defense is, absurdly, arguing a seasoned CEO doesn't understand what "funding secured" means. He might be about t…

Fortunately for him, he's an engineer with thumbs and a screen, not a lawyer. I don't think it's particularly likely that this goes nuclear on Musk or Tesla but it's definitely absurd, as you said.

He's a CEO and is fully responsible for all matters of Tesla finances. If Mr. Musk is too ignorant of the law to properly run a company, then he will be removed.

But that's the SEC's investigation. The deal with the article today, is that the DoJ... aka the FBI is beginning to get involved. This suggests that the FBI is concerned with CRIMINAL issues with regards to that tweet. Criminal penalties looks unlikely IMO, but who knows what the FBI manages to dig up?

In either case, the FBI looking into it doesn't look good at all. If anything, it helps solidifies the SEC (non-criminal) case of negligence.

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

#340

Post by joering2 »

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…

> Imagine Elon getting a 2 year ban on begin an executive in a company.

Its not that big of a deal - other execs at SpaceX recently came and say company run great and they are mostly in charge anyways.

> There is going to be a lot of backroom dealing to do everything they can to prevent Elon from being charged.

Are you saying there are bribes or something? Can you please clarify?

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