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No. The range originally mentioned by Tesla in the earnings call was production of 350k-500k cars. He then tweeted about making 500k cars a year -- guiding th

by golfer 8y ago

No. The range originally mentioned by Tesla in the earnings call was production of 350k-500k cars. He then tweeted about making 500k cars a year -- guiding the world to the extreme top range of the estimate. This is material information, and he misled investors. It's clear cut.

kosievdmerwe 8y ago
To further highlight this point, which of these three statements would make you the most likely to invest in Tesla: 1) 350k-500k cars a year 2) around 400k cars a year 3) around 500k cars a year The three statements communicate different information and (3) is the best, since unlike (1) and (2) it implies there's a chance that the production numbers can exceed 500k and would certainly be close to 500k in any case. Whereas, with (1) and (2) it probably won't be. Furthermore, quoting a specific number, even if you have the word "around" before it, implies new information was obtained narrowing down the range given in the earnings call. Giving investors more clarity on how they should invest in Tesla. This makes it material. If we can accept the information is material, then it's pointless to argue whether it's misleading or false, since that's not what the SEC is arguing about. Musk has to pre-approve material statements (due to his settlement with the SEC) and, according to internal Tesla policy, get that approval at most 2 days before posting them. The earnings call was on January 30, so even if pre-approval was given then (it wasn't) then it would have expired on February 19 when the tweets were made. The fact that he misled investors (proven by the fact that he issued a correction 4 hours later), just adds extra ammunition to the SECs argument that Musk should have pre-approved his tweet as pre-approval would have caught the factual errors. Seriously though, read through the court document, except for the bit at the end of page 9 (where they quote a bunch of cases) it's very simple to read and understand: https://www.documentcloud.org/documents/5750664-Show-Cause.html https://www.documentcloud.org/documents/5750664-Show-Cause.h...

by golfer 8y ago

kosievdmerwe 8y ago

To further highlight this point, which of these three statements would make you the most likely to invest in Tesla: 1) 350k-500k cars a year 2) around 400k cars a year 3) around 500k cars a year The three statements communicate different information and (3) is the best, since unlike (1) and (2) it implies there's a chance that the production numbers can exceed 500k and would certainly be close to 500k in any case. Whereas, with (1) and (2) it probably won't be. Furthermore, quoting a specific number, even if you have the word "around" before it, implies new information was obtained narrowing down the range given in the earnings call. Giving investors more clarity on how they should invest in Tesla. This makes it material. If we can accept the information is material, then it's pointless to argue whether it's misleading or false, since that's not what the SEC is arguing about. Musk has to pre-approve material statements (due to his settlement with the SEC) and, according to internal Tesla policy, get that approval at most 2 days before posting them. The earnings call was on January 30, so even if pre-approval was given then (it wasn't) then it would have expired on February 19 when the tweets were made. The fact that he misled investors (proven by the fact that he issued a correction 4 hours later), just adds extra ammunition to the SECs argument that Musk should have pre-approved his tweet as pre-approval would have caught the factual errors. Seriously though, read through the court document, except for the bit at the end of page 9 (where they quote a bunch of cases) it's very simple to read and understand: https://www.documentcloud.org/documents/5750664-Show-Cause.html https://www.documentcloud.org/documents/5750664-Show-Cause.h...