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My knowledge of how publicly traded companies work is very limited, but: Was what he said really that bad? He said: >Tesla made 0 cars in 2011, but will make

• deleted 8y ago
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• gamblor956 8y ago
  Last year Elon made a series of deliberately false statements made with the sole purpose of artificially inflating the stock price of his crime. CEOs have gone to jail for years over misrepresentations less outrageous than Elons'. He was able to avoid prison time and hundreds of millions in fines by agreeing to a slap-on-the-wrist settlement with the SEC that required a small fine and, crucially, that his tweets be reviewed by someone else at the company before they were posted. So that no more material mispresentations would spew forth...like the one the SEC is now saying violates the settlement agreement. If he wanted to keep tweet vomitting, he could have decided not to settle with the SEC last year and taken his chances.
  • manicdee 8y ago
    He did no such thing. You are probably referencing a series of tweets where Elon was openly contemplating what would be required to buy back Tesla shares. The settlement with SEC clearly stated that no fault was found and no guilt admitted. Why people get so excited about Musk spewing numbers over Twitter is beyond me, when the responsible course of action is to verify claims against other better vetted sources. The crowd was eager to hang Elon over “funding secured” despite the entire deal being dependent on shareholder agreement. The crowd is now eager to hang Elon over a typo. I think it’s the crowd that needs to delete Twitter, not Elon. Before you start discussing SEC rules remember these are all people who have been complicit in regulatory capture and they are all by definition the worst people for the job. They stood by while market manipulation was being performed daily through media publishing misleading stories in time to shake up morning trading. The SEC is corrupt to the core.
    • LiquidSky 8y ago
      >He did no such thing. You are probably referencing a series of tweets where Elon was openly contemplating what would be required to buy back Tesla shares. The settlement with SEC clearly stated that no fault was found and no guilt admitted. Yes, that's the "slap-on-the-wrist settlement" for Musk's securities fraud the parent was referring to. >Why people get so excited about Musk spewing numbers over Twitter is beyond me Because he is the head of a publicly traded company and spewing those numbers can violate the law. >The crowd was eager to hang Elon over “funding secured” despite the entire deal being dependent on shareholder agreement. Yes, that's precisely why his statement was fraud. He said he had funding secured when he didn't. He did this to manipulate the market. Outside of the Musk cult, these are the laws people in Musk's position need to follow. If anything evidences SEC corruption it's Musk getting that sweetheart settlement for behavior that would land us average Joes in jail.
      • manicdee 8y ago
        Your claim that the purpose was to manipulate the market has no evidence to support it. If you want to talk about cults at least support your argument with evidence.
    • kgwgk 8y ago
      > The settlement with SEC clearly stated that no fault was found and no guilt admitted. Who says that no fault was found? Surely not Musk. He didn’t admit or deny the allegations of the complaint. And: Defendant understands and agrees to comply with the terms of 17 C.F.R. § 202.5(e), which provides in part that it is the Commission’s policy “not to permit a defendant or respondent to consent to a judgment or order that imposes a sanction while denying the allegations in the complaint or order for proceedings,” and “a refusal to admit the allegations is equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies the allegations.” As part of Defendant’s agreement to comply with the terms of Section 202.5(e), Defendant: (i) will not take any action or make or permit to be made any public statement denying, directly or indirectly, any allegation in the complaint or creating the impression that the complaint is without factual basis; (ii) will not make or permit to be made any public statement to the effect that Defendant does not admit the allegations of the complaint, or that this Consent contains no admission of the allegations, without also stating that Defendant does not deny the allegations; ... https://www.heise.de/downloads/18/2/5/1/1/4/0/4/SEC_Vergleich_Musk_gov.uscourts.nysd.501755.6.0.pdf https://www.heise.de/downloads/18/2/5/1/1/4/0/4/SEC_Vergleic...
• cjarrett 8y ago
  It's a 'simple mistake' in his long line of ignoring well established SEC rules.
• minimaxir 8y ago
  > This seems like a pretty simple mistake to have made Elon Musk is the head of a public corporation, not a random Twitter user.
  • bytematic 8y ago
    Making him immune to mistakes?
    • empath75 8y ago
      There’s a reason lawyers vet public statements by corporate officers.
    • na85 8y ago
      Making him responsible for mistakes.
    • hackcasual 8y ago
      Meaning his mistakes move markets. Nobody has to be on Twitter. If you are and you're on the c-suite of a publicly traded company, you need communication discipline
    • 2muchcoffeeman 8y ago
      So he should stop tweeting about company related matters unless someone has cleared him to do so. Seriously why? Do you go around teeeting about potentially sensitive company info? Employees don’t do it, why is Elon doing it?
  • blhack 8y ago
    He's a human being who also happens to be the head of a public corporation. We can't expect every single action he takes at every point to be filtered into legalese. IMO, if he had said this in an earnings call, or presented it in a way that made it seem "official", then I could get the problem, but it's twitter.
    • bjl 8y ago
• detaro 8y ago
  The legal point isn't if what he tweeted was "that bad" or not. It's that after he got caught the last time, in the settlement to end the case he agreed to have Tesla legal review all such tweets in the future to make sure he doesn't do it again. He broke that agreement.
  • voodooranger 8y ago
    i believe elon’s argument is that the offending tweet didn’t need approval because he believed that he was just restating a projection made on the previous earnings call
    • cmurf 8y ago
      What he believes doesn't matter, it's what he agreed to that matters, and he violated that agreement.
      • anoncoward111 8y ago
        Apparently we live in a country where the government can murder thousands upon thousands of innocent Iraqi civilians, deny that it ever happened, and profit off of the destruction. But god help you if you make a tweet that is subjectively incorrect.
        • jacques_chester 8y ago
          The justice system is not single-threaded. It can deal with more than one case at a time.
        • missedthecue 8y ago
          The government profited? I always hear that it cost 6 trillion or something
          • krferriter 8y ago
            government officials and connected firms profited, taxpayers lost out
• kokokokoko 8y ago
  This, if anything, is a good lesson on why politicians and PR firms tend to speak the way they do. Unfortunately, the baseline for your understanding requires a reasonable amount of intelligence, a reasonable amount of empathy, and a reasonable amount of ability to frame situations in context. The reality is that, surprisingly enough to people like yourself, the majority of the population does not actually have all three of those abilities. It was something that was unbelievable to me until I was close to something that dealt with public opinion. You are absolutely correct on your take of the situation. The reality, unfortunately, is that the majority of the population is not capable (not their fault) of understanding the situation at that level. This is why messaging out of corporations and politicians tends to be so odd. The majority of people are simply not capable of understanding things at your level. Edit: I would strongly encourage people here to look up the median reading level in the United States. Then find an example text above that reading level(it's around 9th grade) and realize that half of the United States is below that level
• danso 8y ago
  As others have pointed out, the issue is the SEC settlement that Musk agreed to. But to your question, yes, I think what he tweeted was bad, for a CEO and an engineer. The number he stated is literally off by 20%. How can you say what he did was an “honest mistake”, as if an engineer can’t be expected to know basic arithmetic? Or a CEO not to know that the peak rate of production per week is not the same as annual rate? Musk has all the info needed to make an accurate and still impressive claim — he chose to exaggerate. And he chose to do it after knowing the terms of the SEC settlement.
• blihp 8y ago
  It's not about malice. It's well known that public statements by corporate officers and other key people can move the market so their statements tend to be scrutinized by all sides, including regulators. Another problem is it's often difficult to prove/disprove if a statement is an honest mistake or a misrepresentation (or even outright lie.) That's why it's so rare for company officials to go 'off script' when making public statements... pretty much everything they say is vetted by legal, PR and pretty much any impacted group in the company to ensure they don't step in it. Walking back / clarifying statements in his role can be much more costly than just keeping silent until you have the facts right.
• ggggtez 8y ago
  >was it that bad >claimed 500k, but actually 400k That's a 25% increase! Yeah that's bad! He was already warned for using twitter to spread misleading info about the value of his company. He should know better.
• ggggtez 8y ago
  Public traded companies work like this: You must tell the truth about how much money you make and spend, and report it annually to everyone, so they can make informed decisions about whether to buy or sell it the same as anyone else. As long as you do, then you are allowed to sell stock. If you don't then you are not allowed to sell stock. The reasoning is obvious. It's too easy to commit fraud if you don't follow these rules. Therefore, you must agree to the rules to trade publicly. The SEC's job is to protect the public from fraud.
• xkjkls 8y ago
  It's not about the 100K mistake; it's the fact that he signed an agreement with the government that all material information on his Twitter feed should be reviewed by Tesla's general counsel before being posted. This obviously was not, and it is obviously material even if he is reiterating guidance. Elon needs to live by the agreement he signed or face consequences.