Elon Musk Sued By Sec

Posters here might wish to keep in  mind that Tesla is the most heavily shorted stock on the Exchange.  It likely is the most heavily shorted stock on the planet.  Numbers ranging at 27% short interest are bandied about. 

Interestingly, the shorts have consistently had to give money back to the market, as the stock price has kept rising in spite of every possible indicator pointing to dramatic drop.  It defies gravity.  The only conclusion is that the True Believers discount all bad news and analysis about Tesla, its business model, its internal failures - none of that matters.  The Buyers have this messianic zeal. They keep buying.  The shorts keep losing. 

Elon Musk takes the shorts personally, as a personal slight.  It aggravates him to no end, as it is a direct rebuke to his visions.  So to no surprise he sets on a path to hurt the shorts back.  Personally, I have no love for shorts; stripped of the Wall Street jargon, shorts are leeches and parasites.  They make money off other peoples' failure.  Selling a naked short position is betting on another's misfortune.  That is not gallant.  That Elon whacks the shorts is just fine by me.  That he whacks the naked shorts is even better.  

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19 hours ago, Dan Warnick said:

So, the question now is: Is this good news or bad news for an investor in waiting, short or long? 

I would think if they manage to unseat Musk, the shorts will be throwing a big Screw You bash in Musk's honor. I am not sure how successful Tesla's board will be in keeping him, but they need to; Investors will take their money and run if Musk is overthrown.

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2 hours ago, Rodent said:

I would think if they manage to unseat Musk, the shorts will be throwing a big Screw You bash in Musk's honor. I am not sure how successful Tesla's board will be in keeping him, but they need to; Investors will take their money and run if Musk is overthrown.

Rodi, just so that you understand how serious this is for Musk and Tesla, the SEC has the civil enforcement powers to remove Musk, ban him from any publicly held company, and ban him for all securities industries, of they want to go that far.  They do have to go to Court with a Complaint, but the SEC is very good at that, they go to court all day long, and the very best that Tesla's legal team could hope for is to delay the proceedings. Given Elon's very public track record, I would suspect that the Administrative Judge that hears the SEC Complaint is going to issue a quick Decision, and the Ruling is likely to remove Musk from the company and fine him. 

Although a distant parallel, there is the matter of BIll Erbey and Ocwen Financial Corp., and its various octopus tentacle companies Ocwen Financial Services, LLC etc. Erbey was banned from the securities industry for life, fled the USA, fled from the Virgin Islands where he had set up an armed camp, and purchased citizenship and a passport from Malta by handing them a fee of $680,000  - cheap money for someone who stole over $400 million for himself from homeowners that he had wrongfully foreclosed on, mostly by fabricating documents that were used by bank foreclosure attorneys (who knew that they were forged, but submitted them to the Courts notwithstanding, which speaks volumes about the state of ethics in US law.)  Malta is part of the Schengen visa-free area, so Erbey can travel around without leaving much of a trail.  The point is that it was the SEC that administratively removed Erbey from his company and banned him.  They can do that. 

Elon Musk thinks that his legal team can take on the SEC and defeat them.  He cannot; they cannot.  Nobody defeats the SEC.  And certainly with Elon's long track record of bizarre and misleading statements to investors and analysts, I don't see him prevailing in a slugfest with the Government. Elon is going to be removed; that is my prediction.  It becomes a matter of "when."

Unless, of course, at some future point Elon again changes his mind and genuflects to the SEC.  Who knows; they just might relent. 

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12 minutes ago, Jan van Eck said:

Rodi, just so that you understand how serious this is for Musk and Tesla, the SEC has the civil enforcement powers to remove Musk, ban him from any publicly held company, and ban him for all securities industries, of they want to go that far.  They do have to go to Court with a Complaint, but the SEC is very good at that, they go to court all day long, and the very best that Tesla's legal team could hope for is to delay the proceedings. Given Elon's very public track record, I would suspect that the Administrative Judge that hears the SEC Complaint is going to issue a quick Decision, and the Ruling is likely to remove Musk from the company and fine him. 

Although a distant parallel, there is the matter of BIll Erbey and Ocwen Financial Corp., and its various octopus tentacle companies Ocwen Financial Services, LLC etc. Erbey was banned from the securities industry for life, fled the USA, fled from the Virgin Islands where he had set up an armed camp, and purchased citizenship and a passport from Malta by handing them a fee of $680,000  - cheap money for someone who stole over $400 million for himself from homeowners that he had wrongfully foreclosed on, mostly by fabricating documents that were used by bank foreclosure attorneys (who knew that they were forged, but submitted them to the Courts notwithstanding, which speaks volumes about the state of ethics in US law.)  Malta is part of the Schengen visa-free area, so Erbey can travel around without leaving much of a trail.  The point is that it was the SEC that administratively removed Erbey from his company and banned him.  They can do that. 

Elon Musk thinks that his legal team can take on the SEC and defeat them.  He cannot; they cannot.  Nobody defeats the SEC.  And certainly with Elon's long track record of bizarre and misleading statements to investors and analysts, I don't see him prevailing in a slugfest with the Government. Elon is going to be removed; that is my prediction.  It becomes a matter of "when."

Unless, of course, at some future point Elon again changes his mind and genuflects to the SEC.  Who knows; they just might relent. 

Or example of Allen Stanford of the  Standford Finanical (crimes) Group

 

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Fidelity and T Rowe Price dumped 20% of their holdings earlier this year and so many top "executives" have quit I think we may be seeing the beginning of the end for Tesla.  My niece is an engineer there but Tesla never made a profit and Elon Musk is just a promoter with numerous money losing ideas that appeal to nice naive folks who want a better world.  BEV's are only a niche product at best and the original founders were forced out by Elon Musk in 2008 anyway.  His "lighting up" on the Rogan show didn't do much for his image and his Tweets showed to me an questionable personality for a CEO who doesn't understand the law or how investors might regard such childish behavior.   I think the bankers backed him as a promoter of EV's because when California brought in EV's made in China Americans refused to buy them so BYD just builds electric buses in Ca.  I see Tesla as a market test the major auto makers watched and possibly they have decided the "test" is over.  BEV's being a niche product and hydrogen fuel cell EV's offering a real alternative which major energy companies will embrace and offers a sensible no waiting for recharging and zero pollution?  Long term hydrogen is one real solution for many reasons but oils will always be required and Tesla's probably use more fossil fuels than ICE's do.  Tires, plastics, manufacturing energy costs, electricity generation, lithium production, etc.   Comes down to cost and Telsa's cost too much and doesn't generate a profit.  Then you have his other companies like the Boring Company, Solar City, the Tile company, and Space-X which seems to be the only one that might survive.   Hydrogen technology is here right now but requires infrastructure investment. Comes down to cost and political will so hydrogen will be phased in gradually.  Perhaps Icahn could pick up the pieces when it implodes?  Dynegy, the Trump Taj or TWA and Tesla?  I don't think so and Buffet invested in BYD.

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2 hours ago, Kovac said:

His "lighting up" on the Rogan show didn't do much for his image and his Tweets showed to me an questionable personality for a CEO who doesn't understand the law or how investors might regard such childish behavior.

https://www.flickr.com/photos/expd/31097613108/in/photostream

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9 hours ago, Kovac said:

Fidelity and T Rowe Price dumped 20% of their holdings earlier this year and so many top "executives" have quit I think we may be seeing the beginning of the end for Tesla.  My niece is an engineer there but Tesla never made a profit and Elon Musk is just a promoter with numerous money losing ideas that appeal to nice naive folks who want a better world.  BEV's are only a niche product at best and the original founders were forced out by Elon Musk in 2008 anyway.  His "lighting up" on the Rogan show didn't do much for his image and his Tweets showed to me an questionable personality for a CEO who doesn't understand the law or how investors might regard such childish behavior.   I think the bankers backed him as a promoter of EV's because when California brought in EV's made in China Americans refused to buy them so BYD just builds electric buses in Ca.  I see Tesla as a market test the major auto makers watched and possibly they have decided the "test" is over.  BEV's being a niche product and hydrogen fuel cell EV's offering a real alternative which major energy companies will embrace and offers a sensible no waiting for recharging and zero pollution?  Long term hydrogen is one real solution for many reasons but oils will always be required and Tesla's probably use more fossil fuels than ICE's do.  Tires, plastics, manufacturing energy costs, electricity generation, lithium production, etc.   Comes down to cost and Telsa's cost too much and doesn't generate a profit.  Then you have his other companies like the Boring Company, Solar City, the Tile company, and Space-X which seems to be the only one that might survive.   Hydrogen technology is here right now but requires infrastructure investment. Comes down to cost and political will so hydrogen will be phased in gradually.  Perhaps Icahn could pick up the pieces when it implodes?  Dynegy, the Trump Taj or TWA and Tesla?  I don't think so and Buffet invested in BYD.

That is the problem with the pushers of alternative energy and alternative electric vehicles etc., they are not the "clean", "green" environmentally friendly, safe and what not they are claimed to be by the peddlers. He was backed and funded by tax payer dollars and tax payer funded bail outs. I dont even know how this company has kept up the charade this long while making massive losses and being a public company!!! its been paying off investors with money not form actual profits but more borrowing and debt and bailouts. If anything is a ponzi it seems Tesla has a blessed and cherished leader of a PS. No one wants to talk about the enviro impact of REEs' extraction and processing and the fossil fuel intensive process at each and every level. Then as you state everything that goes into these EV's comes from fossil fuels directly or indirectly. Never bought a Tesla and wont. Rather drive a Lexus Hybrid, much more reliable!!! without the hype and smoke and mirrors!

http://www.bbc.com/future/story/20150402-the-worst-place-on-earth?

 

http://www.chinawaterrisk.org/resources/analysis-reviews/rare-earth-black-market-an-open-dirty-secret/

 

https://www.theguardian.com/environment/2012/aug/07/china-rare-earth-village-pollution

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4 hours ago, Jan van Eck said:

Well, my prediction just came true, Elon Musk is forced out of Tesla by the SEC.  He also pays a $20 million fine in "settlement" of their Complaint.  You heard it here first, folks:

https://globalnews.ca/news/4500636/elon-musk-resigns-tesla-chairman-sec-settlement/?utm_source=notification/

He got off easy!!! I dont know the precise fine calculation formula but seems that 20mil$ is nothing when he cost investors a lot more!!!!

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(edited)

Elon has stepped down as Chairman of Tesla. He will now only be CEO. Wise move for all involved.

Natural gas will eventually take over as the trucking fuel because it is so much cleaner and cheaper than diesel. California is against "fossil fuels and it has greatly damaged its clean air effort. Los Angeles has had very bad air pollution recently. 

https://www.yahoo.com/news/elon-musk-steps-down-tesla-134021468.html 

Edited by ronwagn
reference

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On 9/30/2018 at 1:53 AM, Jan van Eck said:

Well, my prediction just came true, Elon Musk is forced out of Tesla by the SEC.  He also pays a $20 million fine in "settlement" of their Complaint.  You heard it here first, folks:

https://globalnews.ca/news/4500636/elon-musk-resigns-tesla-chairman-sec-settlement/?utm_source=notification/

And it's only for three years, and Tesla is already up 14% from Friday's close. This is hilarious. Not for everyone, obviously, but I happen to share your opinion of shorts.

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Another option would consist on having rechargeable batteries to pull in the truck to replace empty ones so the truck stills up and running.

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(edited)

On 10/1/2018 at 1:26 PM, Georges Drouet said:

Another option would consist on having rechargeable batteries to pull in the truck to replace empty ones so the truck stills up and running.

Yes, you can do that, but remember, the current design has the batteries slung underneath with a protective metal plate under that.  The battery pack would be so heavy, at least 10,000 lbs., that it would require a very sturdy forklift to take out, and you have the issue of removing the metal plate and the various connectors.  Could it be built for a quick-change?  Presumably, the engineers could do that. 

But you cannot do that just anywhere.  It would require a specialized facility with some form of ramp or place with various hydraulic lifts and hydraulic change-tables, plus skilled mechanics.  All that costs a ton of money.  And you have the issue of ownership of the battery packs, liability, and depreciation charges.  These things add a lot of complexity to the ownership picture of that truck.

The other option is for some hedge fund with very, very deep pockets buy all all the trucks, building all the change-out stations, and renting the tractor on a charged basis for so much a mile, basically a wet lease.  I don't see anyone doing that simply because the whole deal is so uncertain, nobody has cost profiles, and Musk is not a reliable source of information on his product. 

A lot easier to build a nat-gas or a fuel-cell truck, don't you think?  Then you don't have all these institutional barriers that cost so much and have these intractable problems.

Edited by Jan van Eck
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Musk may well not be to great on communication but betting against him so far has been a losing game. The history of SpaceX is a good point in case. First all Musk wanted to do was send a small "green house" to mars, he couldn't afford a normal rocket so set off to Russia to buy an old nuke missile to convert it. Twice he was insulted by the Russian officials, so he decided to teach himself rocket science and build rockets himself. Of course he wanted to make them as reusable as possible, according to most experts this was impossible. Well SpaceX is doing the impossible now and at a fraction of the cost of anyone else. Now Russia's space industry is in deep trouble as they can't compete.

Then theres Tesla, from the start "experts" having been saying at every stage that the next stage is impossible well so far the impossible has been possible. They keep wheeling the bitter old man of Nuts Lutz out every six months saying this year they go bust, so far they still are going. Much of the problem is people don't understand what Tesla is, only concentrating on cars and comparing it with old fashion manufactures. Tesla is so much more than cars, theres energy storage, solar, computer hardware, AI, data, manufacturing tech and so on.

The reason for Tesla is  "to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible" and they have with the model3 and other car manufactures are trying to catch up.

Seems to me Tesla scares many people as it reminds them they are the past and that generates hate. And also courses many organisations to try and take them down, maybe they will but the writings on the wall.

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