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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

#341

Post by dragontamer »

gamblor956 wrote: post #320
ConfusedDog wrote: post #21

Earlier quoted context omitted.

He you mean Elon Musk? He admitted the funding was not secured at the time and was never intended to buy back stock at $420? Why not post a link and let us see.

He actually did admit that funding was not secured to buy the stock back for $420. https://www.tesla.com/blog/update-taking-tesla-private In the post, he also admits that the Saudi Arabian investment would only provide a small fraction of the necessary amount needed to go private.

That's DAYS after Musk made the initial "Funding Secured" tweet.

https://twitter.com/elonmusk/status/1026872652290379776?lang...

Follow the original twitter feed yourself. Its not like its been deleted. Musk is very clear that "funding is secured", and in follow up tweets.

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

> Shareholders could either to sell at 420 or hold shares & go private

> My hope is all current investors remain with Tesla even if we’re private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment.

----------

Days later, Musk posts a blogpost that directly contradicts his original tweets. IE: He was lying originally. We now know that there's no buyer who was willing to spend $70 Billion to buyout Tesla and take it private.

The question then, is was this lie "negligence" (SEC fine), or was it intended to manipulate the price? (FBI jailtime).

The DoJ case implies the FBI is looking into the jailtime question. While the SEC is looking into the negligence question. Both cases will move forward as appropriate.

My bet is that SEC gets him on negligence, but I don't really know enough about history / other cases to know what kind of punishment Musk will get. I'm guessing a fine of some kind, but the SEC does have the power to remove Musk from his CEO position entirely.

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

#342

Post by joering2 »

rayiner wrote: post #252
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…

All great points. This is a lot worse than it probably seems to most people on HN. Imagine a prosecutor telling a jury that Elon funds a lavish lifestyle (with lots of details of the excess) with loans against his Tesla stock. That shorts of the stock threatened him personally, because of those loans, and alleging that he threw the $420 figure out there to counter-act the shorts. That’s a terrible narrative to have t…

> Imagine a prosecutor telling a jury that Elon funds a lavish lifestyle

Recent Paul Manafort case shows it doesn't do what its intent to do. Jury was not interested in Manafort luxury lifestyle and judge himself outright ban prosecutors from bringing it up again and again. Unless you believe they can prove Musk bought $2B worth of business suits.

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

#343

Post by AnthonyMouse »

NickM wrote: post #275
NickM wrote: post #37

Earlier quoted context omitted.

If you short a stock, you profit when that company does poorly; since Tesla is one of the most shorted stocks out there, we have many people trying to spread FUD via blog posts/tweets/etc in hopes that they can drive the stock price down. (Or in some cases even going to extremes like fraudulently submitting reports to the NHTSA claiming design flaws and problems with Tesla cars.) This has the side effect of damaging…

I don't know why I'm getting downvoted. The parent post asked why short sellers harm companies, and I gave a legitimate answer, and that answer is also exactly one of the reasons Musk cited for wanting to take Tesla private. Maybe folks are skeptical about the fraudulent NHTSA complaints? If so, here's a source: https://electrek.co/2016/06/13/tesla-fale-complaints-suspens...

It's because you're answering the wrong question. It isn't how short sellers overtly try to lower the stock price, it's how they inherently lower it just by shorting the stock.

The answer is that a short sale is borrowing a share and then selling it, which increases the number of shares available for sale and by supply and demand reduces the price (until the short seller eventually buys back the stock to return it to the person they borrowed it from). In the meantime, which can be as long as the short seller is willing to pay interest, the stock trades lower because the extra share is on the market. It's essentially the same principle as the way banks lending money to people causes inflation because it increases the money supply and so lowers the value of the dollar.

Seeing a lot of existing shorts also tends to spook buyers, which also lowers the price, though it also attracts buyers hoping for a "short squeeze" that raises the price when the short sellers eventually have to buy back the stock.

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

#344

Post by qaq »

hcknwscommenter wrote: post #338
qaq wrote: post #168

Earlier quoted context omitted.

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.

It's lent but you just artificially increased the volume because otherwise someone would have to sell actual shares.

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

#345

Post by stockdollars »

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…

>The sad piece of karma in all of this is that Musk tweeted in an effort to destroy the shorts.

Its not about trying to destroy or support the shorts its about having an effect on the stock price at all. Its some insider type stuff. He cant do that. The reason we like Musk so much is the same reason hes "failing". Hes not the typical CEO and he really doesnt want to be. I dont think he like being the boss, I think he rather build the cool stuff.

I think the money went to his head he is realizing that there is another tier to being rich and powerful that he still needs to climb in order to support the projects that drive his ambition.

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

#346

Post by NickM »

AnthonyMouse wrote: post #343
NickM wrote: post #275

Earlier quoted context omitted.

I don't know why I'm getting downvoted. The parent post asked why short sellers harm companies, and I gave a legitimate answer, and that answer is also exactly one of the reasons Musk cited for wanting to take Tesla private. Maybe folks are skeptical about the fraudulent NHTSA complaints? If so, here's a source: https://electrek.co/2016/06/13/tesla-fale-complaints-suspens...

It's because you're answering the wrong question. It isn't how short sellers overtly try to lower the stock price, it's how they inherently lower it just by shorting the stock. The answer is that a short sale is borrowing a share and then selling it, which increases the number of shares available for sale and by supply and demand reduces the price (until the short seller eventually buys back the stock to return it to…

Your answer is correct too, but the question originally asked was "what would he have gained from destroying the shorts? I understand that shorts are effectively a bet that the stock will go down but do they actually damage the company in any way?" The answer is yes, short sellers do damage the company for a variety of reasons, some reasons relating directly to stuff like stock price, and other reasons being more indirect like the one I cited.

I saw that other answers had already explained how shorts lower the stock price, but nobody had pointed out the other ways in which they "damage the company", as the original post put it.

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

#347

Post by watwut »

stochastic_monk wrote: post #292
danso wrote: post #284

Earlier quoted context omitted.

Musk had repeatedly challenged reporters to “investigate” Vernon Unsworth, and they did. They found no criminal records in the UK or Thailand, no marriage records, and AFAIK, no record of Unsworth visiting or moving to Thailand in the timespan Musk describes. They did however find Unsworth’s girlfriend, who is in her 40s and had been posting about her relationship on social media for years, which would support Unswor…

I hope he does this not because he’s a good person but just because I want Tesla to succeed and I don’t want his stupidity to ruin its chances.

Maybe Tesla needs to fail in the market. After seeing how he behaves on twitter, I just cant imagine the chain of command in Tesla works effectively internally. With the leader so fragile in terms of ego, so easy to go ballistic and with seemingly no ethical limits on how he treats those who don't instantly bend to him.

He seems to care more about building personality cult around himself then about running business.

There are plenty of companies with toxic cultures, it is not like that would be unusual. But here, I just cant imagine people under Musk ever telling him he is wrong or telling him about problems. I would guess that his grasp of reality will be increasingly wrong. To a degree it is normal, of course, but here it seems to go really to extremes.

Electric cars will come with or without them.

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

#348

Post by __s »

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…

Owning mansions is an investment in real estate. Vehicles are the assets that aren't a store of value

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

#349

Post by watwut »

omegaworks wrote: post #300
tedunangst wrote: post #293

Earlier quoted context omitted.

Seems like a better response would be to prove your submarine is awesome than claim the detractor is a pedo. But I'm not the smartest man in the world.

It'll be interesting to see if Elon Musk, darling of startup entreprewannabes, gets a pass here. I hope his followers understand the precedent this sets. Are they truly about engineering solutions to tough problems (as they claim they are), or are they just a cult of personality cultivated to protect a thin-skinned master?

People who are about engineering solutions to tough problems would worship an engineer that spends his time actually working on tough problems.

Elon Musk is business man. His actual occupation is organization, management, negotiation, finance and public relations.

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

#350

Post by onetimemanytime »

gamblor956 wrote: post #302
onetimemanytime wrote: post #295

Earlier quoted context omitted.

My point was that even if true (what Musk said) he showed his pettiness in getting involved with someone that criticized him. As for the libel amount in USA, there's a limit too. Even if the jury goes haywire judges and appeal courts intervene. As for the truth...we don't really know until there's discovery

There's no statutory limit on damages for defamation per se under California law. It's literally whatever the jury decides is appropriate, modified by what the judge thinks is reasonable. EDIT: added the "per se" since regular defamation requires proof of damages but the per se form does not.

But in reality there is a limit. The jury can say $2 Trillion. What is the largest award ever that made it past appeals? Being called a pedophile publicly by Elon Musk is as bad as it gets, but it's still a personal thing, not a loss of $Xx billion in sales or brand name.

Personally I think Musk needs an intervention, something not right with him and he needs to chill out, detox or whatever for a few months.

If Musk offers a huge reward, you'll see Pattya Beach hotel and bar owners checking decades old security cassettes.

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