4 ms·
>According to Musk, he calculated the $420 price per share based on a 20% premium over that day’s closing share price because he thought 20% was a “standard pre
by treis 8y ago
>According to Musk, he calculated the $420 price per share based on a 20% premium over that day’s closing share price because he thought 20% was a “standard premium” in going-private transactions. This calculation resulted in a price of $419, and Musk stated tha the rounded the price up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend “would find it funny, which admittedly is not a great reason to pick a price.”
https://www.documentcloud.org/documents/4950588-SEC-v-Elon-Musk.html https://www.documentcloud.org/documents/4950588-SEC-v-Elon-M... (Page 7-8)
Wow, what a dumb thing to do and even dumber to admit to it.
- chooseaname 8y agoThis is to be expected; he's a manchild.
- stevew20 8y agoThanks for adding substance and insight to the argument!
- deleted 8y ago[deleted]
- rayiner 8y agoIt's better for him if it's an obvious marijuana reference. That way he can argue it was a joke that no reasonable investor would have relied upon.
- rococode 8y agoI'm curious, does "reasonable" actually matter in a case like this? Say he tweeted "I just killed someone LOL" and the stock price drops. Could that also be construed as misleading investors?
- rayiner 8y agoThe SEC needs to prove he made a “materially” false and misleading statement. The Supreme Court has defined a “material” fact for purposes of the securities laws to mean that there is: > a substantial likelihood that the...fact would have been viewed by the reasonable investor as having significantly altered the “total mix” of information made available. If a statement is an obvious joke, no reasonable investor could have viewed it as altering the mix of relevant information.
- likpok 8y agoCould the SEC use as evidence the fact that the price went up post-tweet, and down after Tesla recanted? That is arguably objective evidence of reasonable investors taking his tweet as a material fact to their trading strategies (i.e. by buying stock).
- rayiner 8y agoYes. Its not dispositive, because “reasonable” is a legal abstraction (so it admits the possibility that there are unreasonable investors who don’t get the joke), but it’s evidence.
- mikestew 8y agoThat way he can argue it was a joke that no reasonable investor would have relied upon. I smoke pot regularly, and hold a non-trivial position in TSLA. My first thought was most definitely not, "heh, heh, funny pot reference, bro." My first thought honestly was, "well, he wouldn't say it if it weren't true, because the SEC will haul him off." So I don't know about your reasonable investor theory.
- deleted 8y ago[deleted]
- draw_down 8y agoSmart people can act in very stupid ways.
- drawkbox 8y agoApple's first Apple I sold for $666.66 [1]. Teslas are Model S, Model 3, Model X, (S3X). Model E was taken so they had to go with Model 3. Possibly a Model Y coming (S3XY). People can have fun at work still, though shorts and MBA C-level execs that want to take over the company and drive it into the ground, milking the innovations without innovating for future, will end that fun. [1] https://en.wikipedia.org/wiki/Apple_I https://en.wikipedia.org/wiki/Apple_I
- seansmccullough 8y agoI wonder if he was high when he wrote the tweet?
- nunez 8y agoTony Stark in real life