TSLA - Tesla Motors

[SHDL]

Thank you, Ben, for the figure.  I'd forgotten IB had a tool like that.  A slight restatement of my point based on this graph would be that if the left tail of the distribution looks too thin to you (as it does to me) then you can probably benefit from buying some OTM puts.

 

And you are right about the wide spreads.  They sure make it difficult to trade in and out of profitably, especially if you're working with large sums.  I can imagine that being a deal breaker for most(?) fund managers.  But here if you're willing to just hold until bankruptcy or expiration (whichever comes first) and the ask price is low enough given your probabilistic beliefs, you can just go ahead and buy without worrying about it too much. 

[SHDL]

SEC alleges fraud by Tesla CEO Elon Musk: court records

 

https://www.reuters.com/article/us-tesla-musk-sec/sec-alleges-fraud-by-tesla-ceo-elon-musk-court-records-idUSKCN1M72OI

[Gregmal]

SEC alleges fraud by Tesla CEO Elon Musk: court records

 

https://www.reuters.com/article/us-tesla-musk-sec/sec-alleges-fraud-by-tesla-ceo-elon-musk-court-records-idUSKCN1M72OI

 

Between this and Phil Frost, kudos to the SEC for finally going after some of the big fish who have regularly done whatever they want.

[Liberty]

Here's the court filing:

 

https://www.courtlistener.com/recap/gov.uscourts.nysd.501755/gov.uscourts.nysd.501755.1.0.pdf

[TwoCitiesCapital]

SEC alleges fraud by Tesla CEO Elon Musk: court records

 

https://www.reuters.com/article/us-tesla-musk-sec/sec-alleges-fraud-by-tesla-ceo-elon-musk-court-records-idUSKCN1M72OI

 

SEC seeking to bar him from executive/officer positions in public companies? I guess he could just take Tesla private? #FundingSecured

[tombgrt]

Well deserved!

 

BoD should kick him out anyway regardless of outcome. It is already crazy that he is still in.

[Guest cherzeca]

Well deserved!

 

BoD should kick him out anyway regardless of outcome. It is already crazy that he is still in.

 

the tsla board should put musk on administrative leave during the pendency of this SEC action.  I have $5 that says the board won't do this.

[rb]

Why not do $50? Don't u want to at least make some money off the guy that's dumb enough to take that bet?

[ERICOPOLY]

He really should have been urged by the board to see a psychiatrist.  He sounds to me very much like he went manic brought on by stress.

 

He could then be on medication to manage it -- might go better with the SEC.

 

Musk's description of his behavior and the completely wacky tweet about the Saudi's sounds like bipolar. 

 

Somebody as logical as him couldn't think that such a tweet would ever gain him anything which is why I wonder if he was experiencing legitimate psychosis.

 

I wonder if a medical explanation would keep him from getting banned as long as he remained on bipolar medication.

[Cardboard]

Well, congratulations to the shorts!

 

This forced Musk removal by SEC is near or death for Tesla. How could this possibly refinance, raise equity without the visionary leading.

 

If I owned one of these vehicles I would also now be worried about warranty and long term support.

 

Cardboard

[SHDL]

He really should have been urged by the board to see a psychiatrist.  He sounds to me very much like he went manic brought on by stress.

 

He could then be on medication to manage it -- might go better with the SEC.

 

Musk's description of his behavior and the completely wacky tweet about the Saudi's sounds like bipolar. 

 

Somebody as logical as him couldn't think that such a tweet would ever gain him anything which is why I wonder if he was experiencing legitimate psychosis.

 

I wonder if a medical explanation would keep him from getting banned as long as he remained on bipolar medication.

 

I agree that he seems mentally ill.  I can think of no other explanation for his recent behavior given all his past accomplishments. 

 

Given the SEC’s mandates though (like investor protection and such), I don’t think they’ll allow him to stay on as Chariman/CEO of a public Tesla just because he’s not a “bad guy.”  In their eyes having someone heading a public company who tweets serious lies regarding the company’s financials must be problematic regardless of their motivations.

 

I’d be really surprised if they sent him to jail or something but I suppose that’s a separate issue. 

[walkie518]

Well, congratulations to the shorts!

 

This forced Musk removal by SEC is near or death for Tesla. How could this possibly refinance, raise equity without the visionary leading.

 

If I owned one of these vehicles I would also now be worried about warranty and long term support.

 

Cardboard

Likely 100% correct here, but ppl do want these cars and someone will likely step up if/as needed?

 

maybe valuation comes back to reality but company can't be worth what Chanos thinks?

[rb]

Somebody as logical as him couldn't think that such a tweet would ever gain him anything which is why I wonder if he was experiencing legitimate psychosis.

Or maybe he was on acid - which was a rumor that got published in the Times which musk denied.

[Guest cherzeca]

Well, congratulations to the shorts!

 

This forced Musk removal by SEC is near or death for Tesla. How could this possibly refinance, raise equity without the visionary leading.

 

If I owned one of these vehicles I would also now be worried about warranty and long term support.

 

Cardboard

 

you have just recited the best argument tsla can provide against seeking officeholder disbarment for musk (btw, for those wondering if there is precedent for this remedy, there is).  that is, it would kill the company and put thousands of people out of work.

 

I doubt tsla's board has the good sense to make it.

[benhacker]

Well, congratulations to the shorts!

 

This forced Musk removal by SEC is near or death for Tesla. How could this possibly refinance, raise equity without the visionary leading.

 

If I owned one of these vehicles I would also now be worried about warranty and long term support.

 

Cardboard

Likely 100% correct here, but ppl do want these cars and someone will likely step up if/as needed?

 

maybe valuation comes back to reality but company can't be worth what Chanos thinks?

 

How sure are you that this company has a positive equity value beyond is debt / liabilities without Musk?

 

I'm not sure at all... and I'm the one up thread saying I wouldn't bet on event risk to take the shares below $50.  I"m seriously asking the question.

 

Just step back and look at this company.... is it worth anything at all (not trying to be hysterical)?  It's value is virtually 100% intangible (no patents, no specific IP you can point to, 3 factories with all kinds of issues not acquired for much, tons of deferred costs not on balance sheet)... and it's intangible built by a person who appears to have been trying his literal hardest to undermine that value for months and months.

 

maybe he succeeds?  Something to think about.

 

To Eric / Cardboard's comments about the BoD.  This board is totally absentee.  Maybe they are just waking up.  We'll see.

[Spekulatius]

I actually think that Tesla is better off without Elon being CEO. They could create the position of a visionary leader, but then again, I am guessing that everything would remain the same. I don’t think that firing Elon as a CEO will bring Tesla down.

[benhacker]

I actually think that Tesla is better off without Elon being CEO. They could create the position of a visionary leader, but then again, I am guessing that everything would remain the same. I don’t think that firing Elon as a CEO will bring Tesla down.

 

I agree, if this SEC issue is the end of it, Elon can take a non-BoD / non-Corp Exec role, and work his magic behind the scenes. 

 

My guess is that this isn't the end of it.  Moody's downgrade coming, capital raise less likely, halo/sheen is off.  Criminal investigations will continue.  I'm quite certain there is more to find here.  Even if it is, the sheer magnitude of the fake buyout in terms of investor losses will hobble Tesla in a time where it can't afford it.

[rb]

 

I agree, if this SEC issue is the end of it, Elon can take a non-BoD / non-Corp Exec role, and work his magic behind the scenes. 

I don't think the SEC would be too impressed if they make Musk CEO without the name.

[Gregmal]

I think many are overestimating the SEC. Musk won't be kicked out by them. They'll settle on something less.

 

The TSLA Board though, should probably consider this. It's funny, Papa John, got the boot from his own company for, I guess, denouncing racism the wrong way and calling out the NFL. Elon smokes up on TV, fights with random people on social media, calls a dude who just helped save children a pedophile not once, not twice, but three times, only stopping briefly to collect his thoughts and dare the guy to sue him before calling him a pedophile a 4th time, openly admits boredom with the roles of being CEO of a public company, runs other companies during business hours, and purposely tries to influence the company's stock price... he's still there.

[benhacker]

RB, you are prob right... just trying to think positively. :)

 

I think many are overestimating the SEC. Musk won't be kicked out by them. They'll settle on something less.

 

The TSLA Board though, should probably consider this. It's funny, Papa John, got the boot from his own company for, I guess, denouncing racism the wrong way and calling out the NFL. Elon smokes up on TV, fights with random people on social media, calls a dude who just helped save children a pedophile not once, not twice, but three times, only stopping briefly to collect his thoughts and dare the guy to sue him before calling him a pedophile a 4th time, openly admits boredom with the roles of being CEO of a public company, runs other companies during business hours, and purposely tries to influence the company's stock price... he's still there.

 

SEC sued Musk (the individual) for fraud... they didn't sue the board or Tesla the company.

 

You are a fiduciary on the board of that company... what do you do?  Does your D&O insurance (if it's still in effect... note lack of disclosure recently) cover your personal liability if you take no / minimal action.

 

These people may like their checks for rubber stamping Musk's BS, but I'm guessing they also like their lives, reputations, and money in the bank not tied to Tesla.  Governmental and shareholder lawsuits I think are a powerful motivator.

 

We'll see though, as I noted above you make a good case for why the board is and has been asleep... maybe they wake up... or maybe they don't.  If they don't, they will not enjoy the ride - I'm pretty sure.

[rb]

I honestly don't see how the SEC pleads this out for a slap on the wrist and still keep any pretense about why they should exist.

 

He did it. He did it publicly in front of millions of people. He bragged about doing it. This must be the most open and shut case the SEC ever had. They're gonna plead it out? Why? Because lots of people like Elon Musk?

[mwtorock]

is there a possibility that musk wanted to get out this way? so it would seem that he was forced out and even if tsla fail in the future, he could say it is fine when he is in charge.

 

the short case is still valid though, with or without him. but it sounds like he always wanted to focus on spacex.

[benhacker]

What's odd is the WSJ reporting that a settlement was eminent (I assume fine + stepping down)... but then Musk balked.

 

... strange and a half.

 

Agree the case seems open and shut.

 

He may want to get pushed out so he can be the victim, or he needs to walk the stock down now so he gets margin called out at a reasonable price.

 

My best guesses.

[Gregmal]

I honestly don't see how the SEC pleads this out for a slap on the wrist and still keep any pretense about why they should exist.

 

He did it. He did it publicly in front of millions of people. He bragged about doing it. This must be the most open and shut case the SEC ever had. They're gonna plead it out? Why? Because lots of people like Elon Musk?

 

Look at what the bid and ask was for Lee Cooperman and what it got settled for.

 

The SEC is this huge creature that is scary to those on the outside looking in. To those in the business its a joke run by people who ultimately aspire to work for the people they are responsible for policing. It's a massive conflict of interest but one that won't go away until you put some kind of ban in place preventing post SEC employment at SEC regulated firms.

[rb]

I honestly don't see how the SEC pleads this out for a slap on the wrist and still keep any pretense about why they should exist.

 

He did it. He did it publicly in front of millions of people. He bragged about doing it. This must be the most open and shut case the SEC ever had. They're gonna plead it out? Why? Because lots of people like Elon Musk?

 

Look at what the bid and ask was for Lee Cooperman and what it got settled for.

 

The SEC is this huge creature that is scary to those on the outside looking in. To those in the business its a joke run by people who ultimately aspire to work for the people they are responsible for policing. It's a massive conflict of interest but one that won't go away until you put some kind of ban in place preventing post SEC employment at SEC regulated firms.

I am in the business and I agree that the SEC can be a joke. They still have the toolbox at their disposal. It ebbs end flows with the Administrations. Some want them to me more vigilant some one them to be more lenient. During GW bust times for example it was a complete joke. While one would expect the Trump Administration to be on the lenient side. There's just not enough evidence to tell one way or another.

 

Nevertheless, they still have to take a scalp every now and then to justify their existence. You know people there would still like to get paid while they polish their resumes to go into private sector. Also, Tesla is not likely one of the places the SEC lawyers envision themselves landing. Furthermore, usually when one commits fraud one tries to be at the very least discrete about it. Leon Cooperman did not commit fraud and live tweeted it.