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Elon Musk Settles SEC Fraud Charges
- vs2 8y agoOuch 20million for a drunken tweet
- braythwayt 8y agoAnd loss of the Chairman’s job!
- elihu 8y ago...for three years, anyways.
- jdoliner 8y agoIt seems to say 40 million in the header. Edit: 20 mil for Musk, 20 mil for Tesla.
- noobermin 8y agoKeeping it real, many people have ruined their lives over bad tweets.
- InclinedPlane 8y agoRealer: countries have been ruined over bad tweets.
- emiliobumachar 8y agoAny examples?
- vermontdevil 8y agoUSA
- InclinedPlane 8y agoSeriously? Anyone who couldn't think of THE PRIME EXAMPLE of the moment is either not paying attention to politics whatsoever or has an extreme political bias blinding them to the obvious excuse. I'll give you one hint: the only world leader that has been laughed at openly by the UN general assembly.
- kodablah 8y agoRuined, eh?
- rabidrat 8y agoElon is worth $20b [1]. $20m is 0.1% of his net worth. That's like a $1000 fine for someone who has "only" $1m. I have quite a bit less than $1m and a $1000 fine, while not nothing, would make me cranky for a week or a two but have almost no material impact on my life.
- threeseed 8y agoYou can’t make these statements. Net worth is not the same as liquid assets. Most of his net worth is likely tied up in stock. Which he can’t exactly sell.
- afterburner 8y agoHe can take out a loan. It's easy, he has all those stocks to leverage against.
- adtac 8y agoWhat interest rates do rich people like him get? Is the concept of charging interest still valid at that level or is it all bartering of favours?
- tomatocracy 8y agoI couldn't tell you what interest rate he's likely to pay but in general in this situation, there is interest. Whoever lends him the money has their own cost of funds and admin costs to cover at a minimum, even if they view repayment as close to zero risk because the collateral is very good.
- bdonlan 8y agoYou can get an upper bound by looking at published interest rates for brokerages, e.g.: https://www.interactivebrokers.com/en/index.php?f=1595 https://www.interactivebrokers.com/en/index.php?f=1595
- toomuchtodo 8y ago
- asaph 8y ago$40 million actually. > Settlement Requires Musk to Step Down as Tesla’s Chairman; Tesla to Appoint Additional Independent Directors; Tesla and Musk Agree to Pay $40 million in Penalties > Musk and Tesla will each pay a separate $20 million penalty. The $40 million in penalties will be distributed to harmed investors under a court-approved process.
- advisedwang 8y agoBut he'll still be CEO?
- vermontdevil 8y agoYes. Just not chairman and no control over board.
- minimaxir 8y agoA bit anticlimactic. The only reason the SEC brought charges publicly was because Musk refused the first settlement offer (with similar conditions) anyways.
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- GW150914 8y agoThere’s the still the DOJ investigation, so he’s very much in potential hot water, albeit less so than before. The odds of him facing criminal charges was always lower than the civil side, but he’s still at risk. Plus, he’s still facing a raft of civil suits beyond the SEC, even beyond the one from the man he kept accusing of being a pedophile.
- mandeepj 8y ago> so he’s very much in potential hot water I don't think so. He was in much more risk before, with SEC investigation. The accuser in civil suit is asking for $75k worth of damages. I think Musk can pay off that fine and be free from it. I guess there will be no jail time. Although, i'm not a lawyer.
- GW150914 8y agoPlus, he’s still facing a raft of civil suits beyond the SEC, even beyond the one from the man he kept accusing of being a pedophile. As I said, beyond that suit, i.e. the suits he’s facing over the tweets. And the DOJ investigation.
- equathink 8y agoThe defamation accuser's complaint alleges compensatory damages "in excess of" $75k only because it's a jurisdictional requirement for US federal court. He will seek much more at trial, plus additional punitive damages.
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- ChristianBundy 8y agoEDIT: Nevermind, just saw that he'll remain CEO.
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- fermienrico 8y agoI think this is the best outcome we can have (although there might be other lawsuits from the short sellers). Elon will learn a hard lesson, there will be a committee and procedures to control his communication channels. He will still be CEO and the spirit of Tesla will be unharmed in the long run. As much as I see myself as an objective person, Elon is genuine in his passion and his vision. Derailing him to jail time or prison would be a net loss for humanity, however objectively and legally inconsistent it may be. Edit: The news cycle and PR things have a very short term memory. Just a year ago, people were praising him for his style and overall he was considered an extraordinary leader, CEO and a visionary.
- deleted 8y ago[deleted]
- minimaxir 8y ago> Elon will learn a hard lesson, there will be a committee and procedures to control his communication channels. I am very skeptical of this given Musk's recent Twitter behavior (even after the initial Tweet which started the incident).
- juki 8y agoIt's part of the settlement: > Tesla will establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications;
- Barrin92 8y agoI don't really know what it says about the CEO of a company if they basically have to put him under supervision. He's not a kindergartner. I feel this reliance on Musk as a face of the company is increasingly the biggest selling point of the company, which will be unhealthy in the long run.
- InTheArena 8y ago
- ben_w 8y agoThat was quick. Probably for the best, given the obvious trouble overwork has been causing him. Interesting to note specifically the point about controls on his Twitter account that could’ve prevented this.
- threeseed 8y agoThe problems with Musk are far more than just his overwork. There’s a lot to work on. There’s been persistent rumours of serious drug use. His outbursts are erratic and unhinged ie. calling a diver a paedophile on multiple occasions. His private life is extraordinary for a CEO to say the least. He clearly lacks self control ie Twitter and Joe Rogen show. And his I’m the victim attitude towards short sellers, media etc is pretty unparalleled. I suspect that losing the Chairman position is the last step before being removed as CEO.
- fermienrico 8y agoAll of this is from last 6-12 months. Let's not forget what public opinion was without the news cycle telling us what to think. I am not saying his public statements were bad. Just trying to put some perspective. Also, smoking marijuana is ok and legal. He took a puff and all of a sudden he is a drug addict. WTF!? Just watch his interview Salman Khan (Khan academy) or look up his accomplishments.
- dlgeek 8y ago> Also, smoking marijuana is ok and legal. It is illegal on a federal level. And as someone who runs a company with multi-billion-dollar National Defense contracts, which are almost certainly contingent on him holding a security clearance, it shows an incredible lack of judgement to consume marijuana publicly.
- sokoloff 8y ago> It is legal on a federal level. You mean to say illegal.
- jimrandomh 8y agoSo Musk is stepping down as chairman of the board at Tesla, but one thing this doesn't really address is whether he'll remain as CEO. I presume that decision will be made by the new (larger) board of directors?
- alexandros 8y agoyou never know, the expanded board might actually be suicidal and choose to kill the goose that lays the golden eggs. I don't think they're that deranged, but you never know.
- threeseed 8y agoTesla doesn’t need Musk right now. They need a serious executive from a former car company who has experience in quiet, deliberate execution. Lots of companies are making cars without anywhere near the same levels of fanfare.
- reaperducer 8y agoLots of companies are making cars without anywhere near the same levels of fanfare. I don't know much about the auto industry, and don't really follow Tesla, but I do know that Tesla stock is worth almost an order of magnitude more than General Motors.
- asaph 8y agoOnly by share price, which doesn't matter. By market cap, a far better (though still imperfect) measure of company value, GM is worth a little more. TSLA ~$45.5B GM ~$47B
- thinkcontext 8y agoThe stocks aren't really comparable. If you liquidated the companies GM would bring in many times Tesla. Tesla's value comes with a huge risk premium. Tesla was very close to going under a few months ago and it could still do so, if it doesn't execute right.
- pavlov 8y agoAt the last Tesla shareholder meeting five months ago, some investors wanted Musk to give up the chairman post (while remaining CEO of course) but he refused: https://www.google.com/amp/s/www.apnews.com/amp/386447de1b8a45f0a8ed8b95224479cf https://www.google.com/amp/s/www.apnews.com/amp/386447de1b8a... Would have saved $40M cash and billions in shareholder value if he’d taken the hint then. Nobody should think themselves that irreplaceable.
- ec109685 8y agoIf he wasn’t chairman, they couldn’t have taken that away from him in the settlement, so he might have suffered a different punishment.
- threeseed 8y agoThey likely would’ve just pushed for more independent board members. It’s very clear what the SEC has done. Which is send a warning sign that this is Musk’s last chance before he is fired. I don’t think they wanted to punish him any more than that.
- pavlov 8y agoMy train of thought was that Musk probably wouldn’t have ended up tweeting “funding secured” in a situation where he’d be accountable to an external chairman of the board. A bit of governance might have been useful these past months.
- cryptonector 8y agoExactly. It wouldn't have been his place to negotiate, not without chairman approval, and certainly not by himself. There would have been an adult in the room.
- ccorda 8y agoIt wasn't just Elon who turned that down, it was put to a vote and "More than 86 million shares voted against the proposal at a shareholder meeting in June, while fewer than 17 million voted in favor, Tesla said." https://www.reuters.com/article/us-tesla-musk-blackrock/blackrock-voted-to-replace-teslas-musk-with-independent-chairman-idUSKCN1LG01R https://www.reuters.com/article/us-tesla-musk-blackrock/blac...
- thinkcontext 8y agoStepping down as chairman is much less of a punishment than stepping down as CEO. Looks like the SEC blinked.
- thinkcontext 8y agoTo those downvoting, he didn't accept the previous deal, presumably this one is more to his liking. What other explanation is there besides the SEC giving ground?
- ubernostrum 8y agoMaybe he sobered up and talked to some attorneys who told him the SEC had him dead to rights and he should go back and agree to settle with them.
- bjl 8y agoThis deal is strictly worse than the one he refused. Fines doubled from 10M to 20M, chairman ban increased from two years to three, new communication review process (not in the original deal), and they still have to install two new board members.
- thinkcontext 8y agoAre you joking? A 10m fine vs 20m is totally immaterial to a billionaire. 3 years is longer than 2 but it's clear giving up CEO was unacceptable to him.
- bjl 8y agoYou speculated that this deal was more to his liking than the previous one. I was just pointing out how absurd that statement was given that this deal is worse than the other one in every respect.
- FartyMcFarter 8y ago> this deal is worse than the other one in every respect. Is it? I thought the other settlement included Musk not being able to lead companies for two years: https://www.marketwatch.com/story/elon-musk-rolling-the-dice-and-buying-time-by-turning-down-sec-settlement-2018-09-28 https://www.marketwatch.com/story/elon-musk-rolling-the-dice...
- 68c12c16 8y agoIs there any way that we could receive similar settlement compensations from the President of the US for his morning tweets? I personally lost a few thousands of dollars due to the sudden stock/cryptocurrency market crash as a result of his tweets in the past few months this year...
- apendleton 8y agoCan he remain on the board as a regular board member? It only says he's stepping down as (and forbidden for three years from being) chair.
- notatoad 8y agoI would assume yes, but he wouldn't be eligible for either of the two new independent board seats and can't keep the chairman's seat, so for him to remain on the board would require one of the existing board members to give up their seat to him.
- zwily 8y agoNot if an existing board member becomes chairman.
- pfarnsworth 8y agoHe's lucky. If he were a small time person he would be in jail by now. SEC only goes after low hanging fruit, so you know that this was an easy case for them. Musk deserves it for his stupidity but SEC isn't any protector of the masses by any means.
- toymachine 8y agoHonest question: Does it really matter if he loses the chairman role? Or even if he lost the CEO role? If he was busted down to VP of Engineering he would still be a major shareholder and everyone would did what he said right? He just wouldn't have any "official" corporate leader responsibilities (quarterly calls, etc). Or am I totally wrong?
- _jal 8y agoI suspect it would matter, for at least two reasons. For that to work, you'd need a particular sort of senior management arrangement, not just to leave him alone, but to take a lot of heat for his eccentricities. You need particular people capable of forming unusual understandings for that to work. And there would also necessarily end up being limits - there's only so far folks will cover someone else's bets. The second reason is Musk's ego. I think he'd find a demotion humiliating, and if he's not treated as a Master of the Universe Superhero-CEO, I bet even money he'd behave worse, pick fights with his minders, etc.
- alexandros 8y agoResearch what he did when he was fired as CEO of PayPal. He made sure the company had good management by making sure Peter Thiel came back (even though they weren't the best of friends at the time), and he stayed quiet, allowing the team to execute and make him rich. Now that you know this, will you update your beliefs about his ego?
- rjplatte 8y agoEssentially, he's egotistical, but if someone forces him to back down, he's also mature enough to handle it.
- chiefalchemist 8y agoPerhaps it's more accurate to say he's driven, no nonsense and shrewd? Yeah. Of course he wears his ego proudly. You don't rise to that level without above average chutzpah. But I think that's more a side show than the featured event.
- herpderperator 8y ago> Musk and Tesla will each pay a separate $20 million penalty. The $40 million in penalties will be distributed to harmed investors under a court-approved process. Well, the stock has done somersaults in all directions since then (benefiting both longs and shorts.) I wonder who would be eligible for part of this payout.
- braythwayt 8y agoWho will be eligable? I suspect the investors with the best-connected lawyers will get payouts, which they will then share with the aforementioned best-connected lawers.
- almostApatriot1 8y agoyeah, The SEC charge probably harmed as many investors
- michaelt 8y agoThere are some crimes that are so blatant, public and obvious that the regulators _have_ to punish you, as any other option would make it look like the regulators were so ineffectual and weak there were effectively no rules.
- AnthonyMouse 8y agoFiling public charges requesting his removal as CEO even though they weren't seeking that in the settlement seems like a calculated move to maximize the impact to the share price and thereby force a quick settlement. It was evidently effective, but it was a hell of an expensive way to win if you're measuring winning in terms of protecting investors. Anyone who got stop loss'd out of their shares has a right to be displeased.
- zaroth 8y agoVery ironic that the SEC action itself hurt longs significantly worse than the offending tweet. Presumably this is short term pain for long term increased stability/control over investor communication. Moreso is Tesla [investors] paying the price for the SEC to make an example of them for all other public companies.
- chx 8y agoRichard S. Fuld Jr. and Lloyd Blankfein played significant part of causing US households to lose 14 trillion dollars. There were zero consequences. Musk caused a blip in the value of a tiny 45B market cap company and is crucified for it. Smthng.
- compcoffee 8y ago>There were zero consequences. Excuse me? Fuld was canned and his equity was wiped out. In what way was Musk "crucified"? Seems to me he got off easy.
- bdcravens 8y agoThe use of the word "crucified" probably speaks volumes about how some see Musk.
- Aloha 8y agoPerhaps this will result in some 'adult supervision' at Tesla. I'm skeptical however.
- objektif 8y agoWow ok this is a pretty good outcome for TSLA and Elon.
- gurumeditations 8y agoWhat does stepping down as chairman but not CEO entail practically?
- threeseed 8y agoHe’s lost control of the board. Which means they have the ability to remove him as CEO.
- ztjio 8y agoIt means he can be fired.
- icelancer 8y agoIt seems irrelevant but it's actually really significant. The board of directors is back in charge. Though shareholders currently massively back Elon, there is no guarantee it will always be that way.
- compcoffee 8y agoElizabeth Holmes also settled with the SEC, for what it's worth. DoJ investigation ongoing...
- matz1 8y agoDamn, Sweet 40mil extortion by SEC
- dang 8y agoCould you please stop posting unsubstantive comments to Hacker News?
- deleted 8y ago[deleted]
- dhnsmakala 8y agoIs this the most expensive tweet in the world?
- packetized 8y agono, Kylie’s Snapchat tweets were almost certainly more expensive (for $SNAP)
- deathanatos 8y agoThe news of the SEC investigation seems to be the cause behind the stock's recent drop from $307/share to $270/share, though; if I'm doing the math right, that 12% translates to ~$6.3B worth of value. Kylie Jenner's tweet "only" erased $1.3B of stock value. So, I think Elon has her beat. That still doesn't seem to be enough to be the most expensive tweet, though. That honor seems to be this tweet[1], where a finance firm "Selerity" tweeted Twitter's missed earnings report prior to Twitter really announcing it, costing Twitter ~25% or $8B. (The earnings report was uploaded early to the investor relation's page on Nasdaq, apparently, and it showed that Twitter missed its earnings.) [1]: https://www.bbc.com/news/technology-32511932 https://www.bbc.com/news/technology-32511932
- sokoloff 8y agoSelerity tweeted content that was already posted on Twitter's IR site. That $8B was likely to evaporate the following day anyway. (Weather forecasters who predict a hurricane don't cause the billions in hurricane losses either.) Social media gaffes of the "optional" variety (Kylie, Elon, Roseanne) are a different category IMO.
- refurb 8y agoImagine being the Tesla board or his lawyer. Just yesterday he made a stand that he would never settle and here we are. I’m assuming over the past 24-48 hours it’s been a full court press of everyone trying to talk some sense into Elon. Glad they succeeded!
- alexandros 8y agoI follow this stuff pretty closely and I haven't seen any mention of him making a stand and saying he'd never settle. All I've seen is an article referring to "sources" that said he or his team rejected a specific settlement. Can you point me to your source for the claim that he'd never settle?
- refurb 8y agoMusk reportedly refused to sign the deal at the last minute because he felt he would not be truthful to himself and wouldn't have been able to live with the idea he'd agreed to accept a settlement and any associated blemish. https://www.autoblog.com/2018/09/28/elon-musk-walked-settlement-sec/ https://www.autoblog.com/2018/09/28/elon-musk-walked-settlem...
- alexandros 8y agoOk, so this is an article referring to some other reporting, which was somehow sourced itself. Suffice to say that factoid should come with significant uncertainty attached.
- late2part 8y agoElon games the system. Puts his brother in the cosmetic role of board chairman, pays $2500 (in regular folk equivalence) and appoints two faux independent directors. light slap on the wrist, a gentle speedbump, back to same. Basically a speeding ticket.
- threeseed 8y agoThe DOJ phase of this process begins now. It could still be more than a speeding ticket.
- mindcrime 8y agoBasically a speeding ticket. Which is really all that was needed anyway. The whole idea of forcing him out as CEO, issuing a ban on being a CEO/Director of a public company, etc., was pure over-reach from the beginning.
- msie 8y agoThe crazy things that love causes one to do.
- thewizardofaus 8y agoIf anyone wants to profit off this - buy TSLA calls!!! 290 strike price.
- thewizardofaus 8y ago48 hours later , $310 share price. Thanks for the downvotes, just made a quick $10K.
- twblalock 8y agoThere was never any chance Musk would have been banned from running public companies. If the SEC had wanted that, they never would have offered a settlement in the first place. They were just playing hardball to get a deal. There was too much hysteria in the coverage of, and reaction to, this whole affair.
- aerovistae 8y agoFCC?
- twblalock 8y agoOops!
- dunpeal 8y ago> There was never any chance Musk would have been banned from running public companies. Why are you so confident? The SEC had a very strong case (or Musk would never have settled). Had they pursued it to its fullest extent, I see no reason why they couldn't get a strong ruling in their favor. This comment reminds me of the comments that "this will never amount to anything" when rumors of SEC interest in Musk's announcement just begun circulating. And yet, here we are...
- twblalock 8y agoThe SEC offered a deal that did not include Musk being banned. If they wanted him banned, why would they have offered such a deal? Negotiators start by asking for more than they want, not less. The other big factor is that removing Musk as CEO would have caused more harm to Tesla shareholders than Musk’s tweets did. The SEC does not want that outcome. The SEC wants to find outcomes that punish rule violators without harming investors.
- dahdum 8y agoThey offer a deal better than they will seek if you force them to go trial. If he fought it I have no doubt they'd have gone for the throat.
- JayDoubleu 8y agoit was he's plan all along (this + weed stuff). He couldn't just quit tesla and they just made him chairman for the next 25 years. Not this solves all of hes problems. He can finally focus on spacex
- e40 8y agoAnyone know the difference between the proposed settlement he turned down and the one he accepted? I'm very curious!
- av3csr 8y agoFor one the original proposed settlement apparently had a 2 year ban (don't know if it only applied to the chairman title or CEO as well), and him stepping down was meant to happen within a 60 day period.
- rst 8y agoPer multiple reports, the fine was doubled.
- kentm 8y agohttps://www.nytimes.com/2018/09/28/business/elon-musk-tesla-sec-deal.html https://www.nytimes.com/2018/09/28/business/elon-musk-tesla-... The plan, as it was negotiated by lawyers, was for Mr. Musk to step down as chairman of Tesla within 45 days and not resume that post for two years. The company, also a party to the proposed agreement, would add two new directors to its board. Mr. Musk and the company would pay tens of millions of dollars in fines, according to the people, who requested anonymity because they were not authorized to speak publicly.
- apapli 8y ago“The proceeds will be distributed to harmed investors”. Tesla is a speculative investment, and it is largely one of backing Musk, an unpredictable but seemingly brilliant engineer come businessman. I’d much rather see the $40m distributed to people who really need the money, ie the homeless etc. I’d imagine $30m of this $40m will go straight back to investment banks. Hardly a group who “need” the money. Edit: downvoted, wtf?
- generalpf 8y agoIn what way is he a brilliant engineer? He’s not designing the cars and the rockets. He helped make PayPal over 20 years ago.
- fooker 8y agoYou have to know what to engineer, which is something most intelligent people are really bad at. This is why people like Steve Jobs and Elon Musk succeed.
- joering2 8y agoAnd correct me if Im wrong but isnt Paypal number two right after Comcast the most hated technology related company in the world? I mean the internet is full of horrible stories of Paypal stealing peoples money and freezing life founds bankrupting many small businesses.
- apapli 8y agoI’m pretty sure he picked up rocketry when bootstrapping spacex, and he certainly knows a lot about EVs. His ability to decompose highly technical objects (rockets, cars) and re-consider the economics supporting them to make them viable is impressive. I may have overstated him being a “brilliant” engineer, but “very good” would seem to be an understatement. Engineering is as much about designing things for resiliency as it is about designing things to be economically viable.
- rst 8y agoMusk doesn't solve the design problems, but (a la Jobs), he does tell the "real engineers" what problems to solve. Here's an interview with Tom Mueller, the SpaceX lead propulsion engineer since inception, about (among other things) working with Elon. Note particularly the discussion of "face shutoff", which is an approach to sequencing engine startup which Musk insisted on over Mueller's initial objections, because Mueller thought it would be too hard to make it work in an engine the size of the Merlin. They ultimately did, after blowing up a lot of test hardware. The result was a simpler, lighter, more reliable engine -- which they wouldn't have had if Musk hadn't insisted they try, over Mueller's objections. https://zlsadesign.com/post/tom-mueller-interview-2017-05-02-transcription/ https://zlsadesign.com/post/tom-mueller-interview-2017-05-02...
- liftbigweights 8y agoThis is going to burn a lot of shorts come monday. If you guys want a good chuckle at how wrong so many on HN were two days ago. https://news.ycombinator.com/item?id=18088099 https://news.ycombinator.com/item?id=18088099 When it comes to musk and even facebook/google/etc, there is a toxic mix of journalists' hate and a targeted campaign by other groups ( I don't know whether it is short sellers or whatever ). It's ridiculous the amount of absurd hate musk got for a simple tweet. Some even claimed he might go to jail for it.
- dwighttk 8y agoDOJ is still investigating
- liftbigweights 8y agoDOJ is investigating tesla ( not elon musk though they may investigate musk in the future ) and a criminal case ( DOJ ) has a far higher bar than a civil case ( SEC ). "In a fraud case over Musk’s tweet, the SEC would only have to show that Musk was “reckless” when he tweeted about going private. The Justice Department, meanwhile, would have to prove “willfulness” — meaning that he tweeted about going private with a particular intent rather than “recklessly” dashing it off." https://finance.yahoo.com/news/heres-doj-prove-case-elon-musks-tweet-193917953.html https://finance.yahoo.com/news/heres-doj-prove-case-elon-mus... If the SEC gave Elon a slap on the wrist with such a low bar ( recklessness ), I'm guessing DOJ won't have much of a case with their high bar. I can see musk being reckless. I can't see him being involved in stock manipulation. The guy has a $20 billion net worth. But I guess we will have to wait and see.
- refurb 8y agoI’d say most HN comments were right on. When it first happened many on HN said “it’s not a big deal”, “the SEC won’t care”, “they can’t prove anything” and “they won’t ask him to step down as chairman”. And yet here we are.
- liftbigweights 8y ago
- village-idiot 8y agoSettling was clearly intelligent. My only fear now is that he'll tweet something dumb in the near future and get the SEC hammer dropped on him.
- djanogo 8y agoI seriously wonder if Musk thought this up to catch people short over the weekend, by leaking that he didn't want to settle on Friday and then settling over the weekend. As long as he got his "friends and family board" he probably will do what he has been doing. I doubt 2 new directors will be able to control him.
- dahdum 8y agoIf it was his plan to tank the stock 14% on Friday, thinking it would pop back up and beyond Monday to hurt the shorts he’s been smoking far too much. After hours trading is only up .5% from close, Friday morning it was already down like 12% when the market opened.
- hn_throwaway_99 8y ago> After hours trading is only up .5% from close That number was calculated as of 8PM Friday. It doesn't include the impact of this news.
- dahdum 8y agoThank you, don’t know how I spaced that.
- xedeon 8y agoYou're forgetting about the upcoming Q3 report that is about to be published.
- cnorgate 8y agoIrony is he will probably burn more shorts with this announcement than he did with the initial set of tweets... and the SEC helped him do it this time around!
- hn_throwaway_99 8y agoRelated question regarding burning the shorts. The SEC said the $40 million in fines would go to aggrieved investors in a court approved process. But the people who were hurt the most by Musk's initial tweet were short sellers with stop loss orders. But I don't think they would classify as "investors", considering they profit when TSLA goes down. Does anyone know how this process works, or do you think short sellers would have a claim to some of that $40 million?
- dragontamer 8y agoI don't think so. The biggest burns are the people who bought in at $370 thinking that Elon Musk would be selling the company at $420. Shorts may have gotten margin called, but the stock was skyrocketing on the news. Everyone who bought stocks during the tweet in question is basically able to sue for damages.
- reiderrider 8y agoI traded in an 8 year old POS and bought the model 3 yesterday. Elon and his team are headed in the right direction regardless of this drama.
- zaroth 8y agoIf you took delivery yesterday, do mind if I ask what configuration and when it was you put down the $2,500?
- electriclove 8y agoPut $2,500 down at end of July and received my MSM Dual Motor yesterday.
- DennisP 8y agoWow, I thought they were still working through the early deposits.
- rcMgD2BwE72F 8y agoDeposits are global, deliveries are US and Canada only.
- woodandsteel 8y agoThis is a pretty mild punishment compared to the sorts of things the SEC has the power to do, like getting Musk banned for life from any executive position in any company, forcing him to get rid of all his ownership in Tesla, and fining him many billions of dollars. That the SEC settled so quickly and for so little makes me think they believed they couldn't get any more to stand up in court. I assume that Musk refused a more harsh earlier settlement because he was aware of this. So he played chicken with the SEC, and the SEC backed down. It would be really good, though, if Musk learned a lesson from all this and decided to be more responsible in his communications.
- shanghaiaway 8y agoSEC played chicken with Musk and Musk backed down.
- squaresmile 8y agoThat's a weird narrative you are saying. SEC settled quickly and little because this is not a "bad" security fraud. There's little reason to punish him harshly since he probably doesn't have malicious intent. The punishment has to fit the crime after all. No reason for the SEC to destroy a person and company over a tweet. They have to have some punishments though because the fraud was too obvious. The Thursday's failed settlement was slightly better that this one too. SEC's case is likely to hold up in court because Musk's recklessness was too obvious but the court's punishment would probably be similar to the settlement.
- woodandsteel 8y agoYou are just saying what I said but in different words.
- toss1 8y agoThis seems like a definite plus for all involved. The Board and Chair set the overall strategy, while the CEO executes. In the next few years, the strategy is already clear -- execute on the Model 3, Model S & Roadster upgrades, Tucks, and solar products. The board should just be a background process for a while, while the pressure is on the CEO. By the time he gets his 'Chairman License' back, it may be time to update strategy. Meanwhile, the SEC notches a "win", the investors can go back to their regularly scheduled short-long bickering, and Elon can focus more on delivering.
- mmaunder 8y agoThe most expensive joint in history. Literally one tweet while (I'm guessing) he was baked cost $40MM, his chairmanship and two new board seats. From the SEC complaint: "...he 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"..." The two of them were probably giggling their asses off as he posted it.
- throwaway9980 8y ago0% chance he recently learned about the significance of 420. Maybe he did use this number because of it, but the assertion that he was high and that this happened because he was high is just speculative.
- mmaunder 8y agoYup, that's what I said. Guessing.
- TheSpiceIsLife 8y agoWhat will Elon Musk do next? The media must be chomping at the bit! Will he reign himself in, or will the circus continue?
- peterarmstrong 8y agoAs a fan (not shareholder, unfortunately) of Tesla, this is great news. When I think of Elon Musk I sometimes think of the movie version of Patton. Hopefully this gets him to settle down on a bit of the drama, and focus on making Tesla succeed and getting SpaceX to Mars...
- 0x8BADF00D 8y agoIf he has time to make tweets like that, his priorities are incorrectly ordered. It happens to the best of us, though.
- mbesto 8y agoHonest question - what's the rationale of being a fan of a CEO? I can understand being a fan of an actor, a sports professional, but a CEO? I sincerely don't get it.
- elcomet 8y agoI can understand much more being a fan of Elon than a fan of a sports professional. One could say Elon is changing the world, or at least trying to, and is trying to accomplish dreams (going to Mars for example).
- mikeg8 8y agoI am a pretty big fan of Elon, I’ll explain how I think about it. To me, it’s not about being a CEO, it is about rooting for a visionary. I want Elon, and his missions via various business ventures, to succeed. The success of an actor, athlete, etc will have zero inpact on me personally. Some of the things Elon and team are trying to accomplish, could materially change my life, as well as many others. It feels much more real, more connected to me. Yes, maybe his methods/antics are silly at times, but he’s human, and trying really difficult things that may improve the world (subjectively). Why wouldn’t you want to be a fan of the things he is doing?
- mbesto 8y agoFair enough. > Some of the things Elon and team are trying to accomplish, could materially change my life Like what specifically? > Why wouldn’t you want to be a fan of the things he is doing? I guess I could be a fan of what he is doing, but not how he is doing it. A few reasons: - Concentration of wealth to him personally at the expense of my tax dollars (just look at how much of Tesla has been subsidized by the government) - Tesla is questionably a sustainable company. I think Musk is a visionary from a product/market perspective, but his operating capabilities are questionable. - You don't need cheerleaders for a more sustainable environment, you need paying customers of environmentally friendly products/services and operators who are fiscally responsible to deliver those goods. I would be cheering like you if he spent more time figuring out how to make his supply chain sustainable and less time touting himself on twitter and attacking his perceived enemies. - He's demonstrated that he believes he is above the law (SEC) and above respectful discourse ("pedo" comments). Certainly not the type of leader I want my future kids to follow. I grew up watching Michael Jordan and was a huge fan of what MJ did for the game of basketball. As I grew older, I learned he has a huge gambling problem (that got him into a lot of trouble), he regularly bullied players (teammates and friendly opponents) and is generally not a likable person. In other words, the end doesn't justify the means for me.
- WheelsAtLarge 8y agoGood settlement for Musk and Tesla. They should have added a review of his tweets by the board or someone. I suspect he'll get in trouble again by sending something stupid. Seems to me that Twitter has become a quick way to create or destroy your career. One tweet, $40 mil...
- JosephHatfield 8y agoThe SEC press release reported that the settlement requires that Tesla put in place additional controls and procedures to oversee Musk’s communications. That seems likely to include controls over his Tweets.
- WheelsAtLarge 8y agoGood point, that's going to help him and Tesla a lot. All his tweeting was distracting from the good things they are doing.
- Ice_cream_suit 8y agoThis settlement will massively strengthen the civil litigation brought against Musk, by several of the many investors he hurt with his tweet. See for instance : https://www.cnbc.com/2018/09/06/short-seller-andrew-left-files-class-action-lawsuit-against-tesla-and-elon-musk.html https://www.cnbc.com/2018/09/06/short-seller-andrew-left-fil... The Musk death spiral continues...
- GW150914 8y agoTheir cases were already incredibly strong, given the nature of the tweet and his Twitter account’s status as an official corporate mouthpiece for five years. From a purely legal perspective the no contest nature of this settlement doesn’t do much to weaken or strengthen their case, but It also doesn’t matter because their cases are already ridiculously strong. Musk is still in trouble, but a death spiral is too strong a word (unless the DOJ brings charges), he could still pull up. If he backs off the Twitter and keeps his head down, he’ll recover. Tesla though, is in a real death spiral with their debt. https://www.investopedia.com/terms/d/deathspiral.asp https://www.investopedia.com/terms/d/deathspiral.asp That’s going to be muuuuuch harder to correct, given that they’re going to have sell a load of discounted stock just to keep afloat in 2019.
- itry2develop 8y agoExpensive damn tweet.
- zamalek 8y agoI'm not disputing the SEC decision about Musk, but why is his once-off and inadvertent market manipulation more illegal than their consistent and deliberate manipulation? Wrap Elon over the knuckles, sure, but what happens to do people with that as their job description?
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- kbumsik 8y agoI don't know much about the America's law system, but I heard DOJ is still investigating. Does this settlement would affect the DOJ? How does the DOJ isvestigation differs from the SEC's case?
- rootusrootus 8y agoThe DOJ is a separate criminal investigation. The SEC case was civil.
- jhall1468 8y agoThe biggest difference is the burden of proof. A civil case requires a preponderance of evidence. A criminal case is beyond a reasonable doubt. The difference is absolutely enormous. There aren't going to be criminal charges.
- harshulpandav 8y agoA $40 Million Tweet. Is it not a Guinness World Record yet?
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- dayaz36 8y agoThis is infuriating. Now if the SEC can go after the bankers that destroyed the world economy that would be great... Seriously this doesn't make any sense. The SEC was definitely conspiring to take power away from Elon..this was their only goal
- tuxidomasx 8y agoWell, that escalated (and got resolved) quickly.
- anthanm 8y agoWhat a joke.
- Proven 8y agoHope more private lawsuits are on way
- cipherzero 8y ago> The SEC also today charged Tesla with failing to have required disclosure controls and procedures relating to Musk’s tweets It’s almost like the current administration should also have these!
- SlowRobotAhead 8y agoA. The presidency isn’t a publicly traded company. B. Obvious joke about “but it’s for sale like it is” :) C. Anyone still arguing about Trump Tweets is being obtuse the bias in media. He found a loophole to get his message out, I don’t agree with the content usually but can’t fault him for the workaround.
- machinesmachine 8y agoA: Except, it kinda is. Trades are made, goods are exchanged, in many ways it's similar, just depending on different rules
- kumarvvr 8y ago>The presidency isn’t a publicly traded company. Yes. But it is enormously more important than a simple publicly traded company. If a company fails to follow rules, it might bankrupt itself / cheat shareholders / cause minor economic harm. Maybe the shareholders lose all their money. If the president fails to follow the rule of law, whole countries will perish. In a way, the presidency should be held accountable at a far more higher level of compliance than a publicly traded company. >Anyone still arguing about Trump Tweets is being obtuse the bias in media. He found a loophole to get his message out, I don’t agree with the content usually but can’t fault him for the workaround. He can get his message out anyway he wants. Tweets, facebook posts, sms, heck even an RFC document. Nobody cares. What everyone cares about is the timing, the potential for vast damage that a single tweet at the wrong time can do, the inherent limited text of tweets having the potential to be misinterpreted. It's not what he can do, but whether he should do it. A person running a whole country ought to be more responsible and should be held responsible for his actions. And for such a person with enormous power, every small act, counts. Imagine the president wearing the Hindu swastika (a deeply religious symbol to Hindus) for Diwali celebrations at a state event,but the clip holding the swastika symbol slips, and the swastika turns a bit. There would be seismic changes in people and societies around the world instantaneously. Now, is the president responsible for the loose clip, perhaps not. Is the president responsible for making sure such things dont happen, absolutely.
- vagab0nd 8y agoMaybe OT but, how would the 40m likely be used by the SEC?
- perennate 8y agoThe article says: > The $40 million in penalties will be distributed to harmed investors under a court-approved process.
- matchagaucho 8y agoFollowing Tesla is like watching a train wreck in slow motion. The next few steps are painfully obvious. I hate to watch. The board can now officially outvote Elon, so the first bond that defaults will result in Tesla getting sold to BMW or Mercedes (or ?). I predict this will happen within 24 months. And no.... I don't hold a short position. I actually do want the home team to win.
- aerovistae 8y agolmfao
- purplezooey 8y agoThat whole thing with the 'going private' was just a tantrum to hurt all the shorts. It worked in the short term, if you were patient you got rewarded.
- pyrale 8y agoShorting is not merely a matter of patience. Some people use barrier products, or can't face margin calls.
- throwawaydream1 8y agoIt’s unfortunate that so many comments below are so stuck on how egoistic Elon is. As if they themselves are ego-less. I work in a 4000 people company with great culture. But even then egos are only skin deep and easily surfaced. Humans are not machines. Egos and emotions are the norm. Just look at yourself.
- deleted 8y ago[deleted]
- LexBrosner 8y agoRaise your hand if you've read Atlas Shrugged. Now, raise your hand if you're read in on administrative law (i.e. Basically, any of the 200+ Fed agencies can make up rules, at will. I know, it's obsured). Well, Administrative Laws (made up rules) are enforced as black letter "law," including asset forfeiture and imprisonment (Worse, 70+ Fed agencies are armed and many have SWAT Teams). It saddens me to see how many of you assume, apparently w/o question, that buerocrates at the SEC could and should, at will, use their made up rules to excommunicate or jail the founder and leader of a ground breaking companies. You say "but, justice is blind." However, enforcement is targeted. Plus, the people I know believe in Elon (No, we're not on a first name basis, the name "Elon" is iconic and doesn't require a last name.) and not Tesla as a company. Without the key innovators and producers, most tech companies would be worthless. Now, wouldn't it be delightful to watch Elon sell his stake and exit Tesla entirely, just to prove a point? Surely, in a short period of time, even w/ their new golden boy CEO, Tesla would fold; ala Apple Computer, Inc. W/o Steve Jobs. All the short positions could finally win (yea!). After which, Elon could buy back Tesla and take it private. With acts like Sarbanes Oxley and Dodd-Frank, who would want to run a public company? If you disagree, go found and operate a few successful businesses. Report back in a decade.
- nraynaud 8y agoHe hated taking this company public, I don’t think it’s warming him to the idea of public markets.
- randomsearch 8y agoThis is good news for nerds who believe tech can be used for more than developing advertising platforms. Everyone anywhere near Elon should do one thing: encourage him to get the hell off Twitter. Social media is bad for everyone, but it seems worse for certain personality types. Please Elon, quit twitter. Even for a year.
- nostrebored 8y agoTwitter seems more like a symptom than a root cause here.
- idrios 8y agoIt's a facilitator of bad habits. Telling him to leave Twitter is like telling an alcoholic to get the alcohol out of his house. In either case it's a good first step. But more directly, everyone makes mistakes and we make more rash decisions when we're stressed. At least without Twitter, his spurts of irrationality from being overwhelmed can be kept private and not affect his business.
- jrumbut 8y agoI once heard that root causes are almost never fixable, so pretty often the best that can be done is a few levels up. The root cause of anything is probably something like mortality, human frailty, the laws of physics. We are very far from fixing any of those. Twitter on the other hand can be changed, and probably some people on this very site work at Twitter and can (and should!) make socially responsible changes. It's not the root cause of anything but it has plenty of influence.
- randomsearch 8y agoThis is an incredible insight. Thank you so much for sharing it.
- silentguy 8y ago> I once heard that root causes are almost never fixable I think we are playing with the definition of root cause here.
- gok 8y agoSo SpaceX isn't going public any time soon.
- acjacobson 8y agoMusk has said publicly that he doesn't want SpaceX to be public because short term market interests and pressures will likely override his goal of getting to Mars. In truth he doesn't want Tesla to be public either, but it was the only way to get the needed capital.
- headmelted 8y agoThis really doesn't change the status quo at Tesla at all. We can armchair quarterback the company all day long about whether Musk is replaceable or not, but short of folks that have direct experience within the company we don't really know. What we can say with some confidence is that if Musk were really removed in any meaningful way the market would crush them utterly within hours. The shareholders want Stark Industries, not some near-insolvent car company with severe production shortfalls and a teetering runway.
- GedByrne 8y agoBut they won’t find Musk when watching Iron Man or Avengers. To find him in film they have to watch the Greatest Showman.
- isostatic 8y agoThey'll find Musk in Iron Man 2
- jpalomaki 8y agoProfessor Aswath Damodaran gave his thoughts on this topic at Nordic Business Forum. (IIRC disclaimer here) He said that he sees some parallels to Steve Jobs, who once almost destroyed Apple and then later saved it - the difference being that on the second time he had Tim Cook. If Musk can find (or if he already has - I have no idea of Tesla management) his own "Tim Cook", then the future of Tesla looks much brighter. For me this makes sense and I've seen it also elsewhere. The person with lots of energy and ideas may not be the best person to execute things in a corporate context.
- everdev 8y agoAs humans, we tend to see patterns wether they're there or not. Jobs and Musk are different people running different types of companies in different eras. There are probably only a small number of people who really understand how Jobs made or Musk makes business critical decisions day in and day out and I'd wager on the opposite that they probably do things fairly differently even if in the outside we see similarities (passion, vision, etc.)
- remcob 8y ago> The $40 million in penalties will be distributed to harmed investors under a court-approved process. Does that mean the people who got their shorts called? That is kind-of the opposite of being an investor. It would be odd if Tesla would have to look after their best interest.
- icf80 8y agodid he plan this?
- londev 8y agoElon Musk and Tesla are still facing: - A DOJ criminal enquiry into the same 420 tweet - A whistleblower suit about misrepresentation of its rate of vehicle and battery production - Another whistleblower suit about covering up a large theft and a narcotics ring - A class action over racism - Complaints about union busting - A defamation suit over pedo accusations - Investor class actions over the Musk family bailout acquisition of Solar City And probably lots more that we don’t yet know about. That so many people in tech are holding this stock and are even proud of the company is shocking to me. Sustainability can only be pushed forward with sustainable finances and the Tesla balance sheet is a horror show. Tesla will file for bankruptcy protection in 2019.
- mellow-lake-day 8y ago>Tesla will file for bankruptcy protection in 2019. We've been hearing this bankruptcy thing every year without fail since the company was founded 15 years ago. This doesn't mean the company won't go bankrupt but that they are more resilient than given credit for. >And probably lots more that we don’t yet know about. Those court cases you listed are daily life for big companies. Intel has been tied in a court case with the EU since 2001. Google just settled a court case. Google is also facing a bunch of other court cases. Tesla gets the spotlight but look around.
- Tade0 8y agoThis doesn't mean the company won't go bankrupt but that they are more resilient than given credit for. The Bloomberg Model 3 counter registered a sharp dip, so the risk is real, but my take is that it doesn't matter. There is an unprecedented amount of decent EV models coming up for model year 2019. This goal has been achieved and I believe Tesla's stock always reflected the rate at which we were getting there, not the company's long-term viability.
- HeadsUpHigh 8y agoThe Bloomberg model 3 counter was using r/teslamotors as a source of VINs. When the ramp up was happening people were registering VINs all the time but now the sub has lost interest in VINs so the numbers are dropping.
- musketX 8y agoThe only reason why they attacked him is this twitt : "Who do you think owns the press? Hello." Even a billionaire can't say that without retaliation.
- guylepage3 8y agoI wonder if the SEC will disclose the persons that end up receiving compensation for the $40M to be distributed amongst "harmed" investors? My hope is that sophisticated investors are excluded from the compensated group as they know how to manage and leverage risk where as the retail investor does not. The retail investor is the one who would have been harmed in this instance.
- techntoke 8y agoTitle should include that he settled For (4) $20 million. Haha.
- bhauer 8y agoSide question: Will this change see the adoption of traditional marketing and advertising tactics by Tesla? To date, it seems that word-of-mouth and hype generated by an enigmatic (charismatic to some) CEO were sufficient to spread rumors and excitement to all reaches. Without that social media hype process, are Tesla commercials in our near future?
- PeterMikhailov 8y agoI assume the SEC's settlement with Musk is supposed to be punitive in some way. Can someone much smarter than me explain how Musk buying 20 million dollars of Tesla stock is punitive?