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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

#41

Post by ComputerGuru »

thedaemon wrote: post #35
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…

Please define shorts. Google was unable to figure it out.

People short selling the stock.

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

#43

Post by Invictus0 »

thedaemon wrote: post #35
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…

Please define shorts. Google was unable to figure it out.

Short-sellers: people that bet that the price of Tesla stock would go down.

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

#44

Post by dsfyu404ed »

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.

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

#45

Post by romed »

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?

Public companies can raise money through "secondary" offerings of stock. That's why an IPO is called an "initial" offering.

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

#46

Post by beaconstudios »

chooseaname wrote: post #28
beaconstudios wrote: post #20

Earlier quoted context omitted.

> but it seems basically obvious to all observers. It doesn't seem obvious to me. It seems like one of a few interpretations, not limited to: - Elon was overly stressed (as has been documented recently) and didn't think before posting such an impactful statement - He considers twitter to be an official outlet for Tesla and just continued with his tendency to publicise his decisions and thought process constantly. - H…

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.

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

#47

Post by mcbits »

thedaemon wrote: post #35
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…

Please define shorts. Google was unable to figure it out.

Short sellers. People who sell something they don't own, speculating that they will be able to buy it later at a lower price.

If so, they make money. If not and the price goes up a bit, some shorts are forced to buy at the higher price to limit their losses. That pushes the price up further, forcing more shorts to buy, etc., causing a "short squeeze" where the price rapidly shoots up very high, "destroying" a lot of shorts.

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

#48

Post by [deleted] »

thedaemon wrote: post #35
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…

Please define shorts. Google was unable to figure it out.

[deleted]

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

#49

Post by danso »

Asparagirl wrote: post #38
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…

It’s important to note that Elon screwed over the “longs” (people holding TSLA stock) too, not just the shorts. Many people and funds bought more TSLA stock in the $350’s range on the assumption that of course the company could/would go private at $420/share. After all, hadn’t the CEO just said so?

I was reading r/TeslaMotors that day and a long made the astute observation that shorting the stock after Musk's announcement when it hit around $380 was the most logical thing to do, because at most you'd be out 10% if Musk were telling the truth. If I had a trading account I think I might have gone for that.

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

#50

Post by whatok »

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?

Tesla has various options for raising cash including selling stock or bonds. In the case of stock, a secondary offering would come at a price relative to the current stock price. In the case of bonds, bonds are in almost all cases higher in the capital structure than equity. Having a large "equity cushion" makes bonds more attractive because there is someone else that will take losses before the bondholders.
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