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Great news but I have to ask. Maybe someone here can share their view/opinion about the market and what’s going on. Musk can’t tweet about going private. So a

by shroom 8y ago

Great news but I have to ask. Maybe someone here can share their view/opinion about the market and what’s going on. Musk can’t tweet about going private. So a major short seller sue him and Tesla. Stock ”crash” during two months. Short seller completly turn around and now long the stock which rises A DAY before this report? Eyebrows should be raised so high everyone go bald. Where Will this end with SEC? And How is this not manipulation from both sides? Disclaimer: Sure I am a fan boy and we all ”knew” they were going to make a profit soon. Great work and this is promising for the future!

compcoffee 8y ago
This is called late economic cycle hysteria. No rules. I've been through two of them, things get crazier.
- dforrestwilson 8y ago
  How do you envision things getting crazier?
- aphextron 8y ago
  Do go on...
- tozeur 8y ago
  Could you please expound on that subject?
gamblor956 8y ago
The problem wasn't that Musk can't tweet about going private. The problem was that he made a false claim about planning to go private in a direct and bald-faced attempt to manipulate the stock to the detriment of short-sellers. As a CEO in charge of the company, he doesn't get to lie to the public, his shareholders, or putative shareholders, about what he plans to do. He doesn't have to tell them everything--but he absolutely cannot lie to them. A shortseller not connected to the company isn't in the same position. Since they're not a company insider, they don't have any knowledge of what the company is doing and others follow their advice at their own risk. It's only a problem when they make false claims that aren't supportable by data or reasonable (if not necessarily accurate) analysis.
- Dumblydorr 8y ago
  Can you explain why he is not allowed to? I don’t understand the justification behind the regulations / laws here
  - empath75 8y ago
    You can't lie to investors, that's securities fraud. He's lucky he wasn't facing criminal charges.
    - rcMgD2BwE72F 8y ago
      What was the lie exactly? "Funding secured" after the Saudi repeated multiple times that they would pay cash for the operation – which was refused repeatedly in the past by Elon himself? Since most shareholders wanted to remain, the cost of the operation was estimated to be below $20B so who doubt that the funding wasn't secured?
      - sah2ed 8y ago
        Matt Levine's Money Stuff [0] is a great read on problem with Musk's "funding secured" tweet. [0] https://www.bloomberg.com/view/articles/2018-08-13/funding-for-elon-musk-s-tesla-buyout-wasn-t-so-secure https://www.bloomberg.com/view/articles/2018-08-13/funding-f...
  - wonderwonder 8y ago
    Greatly simplifying here. Essentially because what the CEO of a publicly traded company says can have real world consequences for the man on the street. If Elon tweeted that they were about to sell triple the number of cars analysts predicted, everyone would run to buy Tesla stock thinking its a can't lose. Each of those people buying the stock causes the stock price to go up (generalizing here), so the next person to buy purchases at a higher price. But hey they are trippling expectations, this stock is going to the moon. Hedge funds, pensions and retirement accounts also get into the action. Now if it turns out that Elon was just pulling a joke and a few days later he tweeted, just kidding guys. The stock would tank. Everyone that had purchased at the higher and higher price would take a massive loss, including all of those retirement accounts. That's why executives of publicly traded companies cant lie because people make financial decisions based on those lies. Some of those buyers control billions in retirement funds (maybe even your 401k). If Tesla happened to be in the process of negotiating a loan or bond at the same time, it's massively fraudulent if they get better rates off the lies that were tweeted out. In addition, anybody shorting the stock faced a real risk of being liquidated due to the stock sky rocketing due to a lie. I am a huge fan of Musk, and think he is doing incredible things but he really should not have done that.

by shroom 8y ago

compcoffee 8y ago

This is called late economic cycle hysteria. No rules. I've been through two of them, things get crazier.

dforrestwilson 8y ago
How do you envision things getting crazier?
aphextron 8y ago
Do go on...
tozeur 8y ago
Could you please expound on that subject?

gamblor956 8y ago

The problem wasn't that Musk can't tweet about going private. The problem was that he made a false claim about planning to go private in a direct and bald-faced attempt to manipulate the stock to the detriment of short-sellers. As a CEO in charge of the company, he doesn't get to lie to the public, his shareholders, or putative shareholders, about what he plans to do. He doesn't have to tell them everything--but he absolutely cannot lie to them. A shortseller not connected to the company isn't in the same position. Since they're not a company insider, they don't have any knowledge of what the company is doing and others follow their advice at their own risk. It's only a problem when they make false claims that aren't supportable by data or reasonable (if not necessarily accurate) analysis.

Dumblydorr 8y ago
Can you explain why he is not allowed to? I don’t understand the justification behind the regulations / laws here
- empath75 8y ago
  You can't lie to investors, that's securities fraud. He's lucky he wasn't facing criminal charges.
  - rcMgD2BwE72F 8y ago
    What was the lie exactly? "Funding secured" after the Saudi repeated multiple times that they would pay cash for the operation – which was refused repeatedly in the past by Elon himself? Since most shareholders wanted to remain, the cost of the operation was estimated to be below $20B so who doubt that the funding wasn't secured?
    - sah2ed 8y ago
      Matt Levine's Money Stuff [0] is a great read on problem with Musk's "funding secured" tweet. [0] https://www.bloomberg.com/view/articles/2018-08-13/funding-for-elon-musk-s-tesla-buyout-wasn-t-so-secure https://www.bloomberg.com/view/articles/2018-08-13/funding-f...
- wonderwonder 8y ago
  Greatly simplifying here. Essentially because what the CEO of a publicly traded company says can have real world consequences for the man on the street. If Elon tweeted that they were about to sell triple the number of cars analysts predicted, everyone would run to buy Tesla stock thinking its a can't lose. Each of those people buying the stock causes the stock price to go up (generalizing here), so the next person to buy purchases at a higher price. But hey they are trippling expectations, this stock is going to the moon. Hedge funds, pensions and retirement accounts also get into the action. Now if it turns out that Elon was just pulling a joke and a few days later he tweeted, just kidding guys. The stock would tank. Everyone that had purchased at the higher and higher price would take a massive loss, including all of those retirement accounts. That's why executives of publicly traded companies cant lie because people make financial decisions based on those lies. Some of those buyers control billions in retirement funds (maybe even your 401k). If Tesla happened to be in the process of negotiating a loan or bond at the same time, it's massively fraudulent if they get better rates off the lies that were tweeted out. In addition, anybody shorting the stock faced a real risk of being liquidated due to the stock sky rocketing due to a lie. I am a huge fan of Musk, and think he is doing incredible things but he really should not have done that.