Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[shlokavica22]

 

[humbaba]

Nathan also appears skeptical about Hueston's argument that she should defer to Tesla. "If you prevail today, your argument is that I have no future role?" she asked. Not necessary, Hueston responds, adding Tesla's view deserves deference.

Latching onto the contradiction, Nathan deadpans: "I do apply it myself, but I defer to Tesla?"

I find it reassuring that the judge took Musk's lawyer to task as well. It is clear that she is not taking sides. At the same time, the SEC have unambiguously lost their case. Prior negotiations determined that muzzling Musk was unacceptable to Tesla and I can't see how that has changed.

What I would like is for the SEC to get a clue and drop this case, but they have dug a hole and are unwilling to climb out. So I expect that in two weeks time the SEC will return to the court complaining that Tesla and Musk are "unwilling to compromise" despite the SEC's best efforts. Musk's legal representation will point out that the SEC is unwilling to agree to anything reasonable and... the judge will vacate the settlement.

Following which the SEC will have to determine whether to pursue their case. Despite the lack of having any actual case, I suspect that they will. Tesla is hurting financially and they will use pending legal action in an effort to force Tesla to capitulate. After all, the SEC has essentially unlimited funds.

Unfortunately, I think this nonsense will continue until the SEC exhausts all appeals on the 420 tweet case or a new administration takes over and tells them to cut out their personal vendetta.

 

[lklundin]

I don't see why either side would be willing to "work it out". Elon certainly doesn't want more restrictions on his free speech after they removed those attempted restrictions from the settlement.

SEC will not want to add anything that removes their right to bother.

How can this be resolved other than by a judge?

One possibility is that the SEC realize that going back to judge Nathan will be worse.

 

[Causalien]

But she is right, it was just yesterday or the day before that the CNBC host on "Squawk Box" speculated on the possibility that Elon Musk would lose his position as CEO,

Tasha Keeney is like the new Andrea James

 

[lascavarian]

What apology?

EM: Sorry I made fun of your name.

SEC: Sorry I told teacher when my feelings got hurt.

Lets be better friends and work to have the best Prom ever!

Seriously, if a better agreement is worked out then all will benefit. That agreement cannot remove EM but it can require some regular followups and it should have an end date. There should be an attempt to define what constitutes "material" specific to this agreement so there is a common understanding. Worst case, have the court choose which side has the better definition. Just my view...

Glad we are now beyond this hearing with a pretty reasonable path forward.

 

[larmor]

This is incredible. Bloomberg sent several reporters to the courthouse and yet this one guy on Twitter delivers a 100x better quality and more accurate report.
Let me clarify, he was actually reporting, while Bloomberg used the time - mainly during Musk's lawyer's time - to post pre-written judgmental and snarky comments on Musk and Tesla and only occasionally went back to the live action... until the SEC lawyer came back. They spent most of the time basking in the light of their own smug commentary instead of reporting on what was happening in the court.

State of the media for you in a nutshell.

Someone should complain to the SEC that bloomberg is not a news source but in fact an entertainment company, you know, just looking out for the investors...

 

[sparcs]

Much better summary in this twitter thread:
Adam Klasfeld on Twitter

Wish I had found this earlier. Instead I got subjected to the Bloomberg propaganda farm.

 

[Lessmog]

I'm amazed at how bullish they are with Nvidia fully know they are being dropped by Tesla, while Stadia can potentially disrupt Nvidia's graphics business. They are being attacked from all fronts since they charge an arm and a leg for their hardware so now inhouse ASIC is beating them at their own game

But it seems ARK SOLD Nvidia? And BOUGHT TSLA? Maybe I misunderstood your point.

 

[humbaba]

One possibility is that the SEC realize that going back to judge Nathan will be worse.

I would like them to realize that. However, I think their personal grievance is overriding any common sense

EM: Sorry I made fun of your name.

SEC: Sorry I told teacher when my feelings got hurt.

Lets be better friends and work to have the best Prom ever!

Seriously, if a better agreement is worked out then all will benefit. That agreement cannot remove EM but it can require some regular followups and it should have an end date. There should be an attempt to define what constitutes "material" specific to this agreement so there is a common understanding. Worst case, have the court choose which side has the better definition. Just my view...

Glad we are now beyond this hearing with a pretty reasonable path forward.

Well, I would like it to be settled as well -- but given the SECs unwavering unreasonableness I just can't see that happening. As to the judge selecting a "material" definition? Not going to happen. It is a settlement between the parties. Materialness is already legally defined, the ambiguity arose from "reasonably could be" and there is no way to improve on that without either discarding the requirement or defacto muzzling Musk. Which, in fact, demonstrates on its face that the settlement was unsatisfactory from the outset.

The problem arises because Musk is already legally constrained from making off the cuff material statements. For example, the real fault with the 420 tweet is that it was material, during the trading day, and the exchange was not notified before hand so that trading on $TSLA could be suspended -- that is pretty much the extent of what Musk did that was wrong.

If the SEC had just gone for a settlement of a fine then things would have been alright, but they had to go and try to have Musk removed and, failing that, to have him defacto removed through censorship. Remember, they wanted him banned from all speech in any media without preapproval. No one could function as CEO with that restriction, twitter or not.

Their overreach is what brought us here and now they are back to square one (well, they got the fines). If they're smart they'll just let this go, but they don't seem particularly smart. They were willing to go before a judge and present a foolish argument.

 

[mad474]

I'd suggest everyone read Adam Klasfeld tweets, much better reporting than Bloomberg's.

Kicked BOOMBLERG out of my bookmarks, I'm not amused. Thanks for the Adam Klasfeld hint.

 

[Freder Reeve]

Adam Klasfeld on Twitter
@KlasfeldReports
Crumpton: "Tesla has, for whatever reason, thrown its lot with Mr. Musk."
Nathan interjects later: "If that's right, has Tesla done what is required of them?"
Crumpton calls the company's conduct "troubling."

the judge didn't respond very favorably in this script. Seemed like a made-for-headlines drama with elon as the villainous ceo tryng to make his own rules.
"I must and I will ensure that court orders are followed, regardless of whether you're a small potato or a big fish." And the dramatic "That's the rule of law." [end Scene]

 

[Fact Checking]

For example, the real fault with the 420 tweet is that it was material, during the trading day, and the exchange was not notified before hand so that trading on $TSLA could be suspended -- that is pretty much the extent of what Musk did that was wrong.

Note that while it's recommended to notify the NASDAQ of pending material news, I'm not aware of it being illegal to release material news during market hours.

So I don't think it was a legal problem.

 

[PhaseWhite]

I usually guess 50m so I can't be more than 50m too high

I may have this wrong. I said they'd be offset by drops in Model 3 deposits. But relative to Q4 results the Y deposits are an incremental source of cash. I'll have to think on that more.


I'm 99.9% sure it cannot. Some say Tesla had to move 600m into China as the "equity" portion of their $2b overall deal. I question that, they should have already had cash in China. Maybe the 10-Q will shed some light.


Guidance is 600m/quarter. My 200m is pretty bare bones. They can't keep starving capex if they want a growth company valuation. Unless they ditch Musk's whole dreadnought fantasy and go capital-light. Which I absolutely think they should, but do not expect.​

Or they could raise capital... anyone ? No ? ok I’ll go back to the corner...

 

[EVMeister]

You know. I had my first experience with Bloomberg when I was about 10 years old. I was on a computing course one summer, when the internet was a newish thing, and I managed to sign up to some Bloomberg thing without even realising. I clicked an advert that promised to make me rich (or something to that effect, can't remember exact wording). I filled in my details. A few days later, I got a phonecall at home. It took the guy who phoned me a good few minutes and my mum grabbing the phone to understand that I was just a 10 year old kid with no will or ability to actually invest with them.

Ever since that day, I've hated the company and joked about what clowns they are.

 

[lklundin]

On what basis do you make this claim?

They already crammed 1,152 more 18650 cells (16%) in the existing pack casing when they built the 100kWh packs. What makes you think they can add another 826 cells in there and/or have a cell with 10% volumetric energy density hiding somewhere they haven't used?

Are the 18650 cells already using the chemistry of the 2170 cells?

If not, there should be a gain there.

 

[Lucky_Man]

And what if Elon now happened to have some more evidence that he had the funding and were to win the original case?

Would the SEC then have to ask to shorts to send the money back?

And what if Elon now happened to have some more evidence that he had the funding and were to win the original case?

Would the SEC then have to ask to shorts to send the money back?

A better question IMO would be:

Does the judge vacate the original settlement and demand the SEC RETURN THE $40,000,000?

 

[MartinAustin]

The Model 3 Tracker will remain a work in progress for now. After five quarters of producing cars, however, it may have passed its peak usefulness.

Bloomberg - Are you a robot?

Sounds like the tracker may be on its last legs.

There will almost certainly be a Model Y Tracker.

In other news... not totally related to sales but definitely Tesla stuff -
"Crisis averted" Texas Tesla owners say after amendment to state bill

 

[humbaba]

Note that while it's recommended to notify the NASDAQ of pending material news, I'm not aware of it being illegal to release material news during market hours.

So I don't think it was a legal problem.

I think I didn't say that well, but the point was the underlying failure was not notifying the exchange because it was during business hours. Not that you can't make material statements during market hours, but there are procedures to follow.

Definitely leaving the reader with the impression that it was illegal was wrong. But I believe I am correct in saying that it violates exchange rules?

My underlying point is that the only thing Musk did that was clearly wrong was not notifying the exchange beforehand. The rest of it, "what does 'funding secured' really mean" is far more ambiguous and it is far from clear that he was wrong. The complaint about a $420 buyout price was just silly.

Arguably, the fine in the settlement was justified. I doubt the SEC could get anything further -- other than through successfully pressuring Tesla to capitulate through abuse of their government granted power.

 

[Sean Wagner]

the judge didn't respond very favorably in this script. Seemed like a made-for-headlines drama with elon as the villainous ceo tryng to make his own rules.
"I must and I will ensure that court orders are followed, regardless of whether you're a small potato or a big fish." And the dramatic "That's the rule of law." [end Scene]

I disagree with your dramatization. It wasn't the "end Scene" either, of course. The judge is doing what I expect a judge to do, and proclaiming it unambiguously too.


@KlasfeldReports
"Regardless of the standard the court uses," Crumpton said, Musk's tweet was material "any way you cut it."


Golden. Just... golden. The judge wraps up by urging the parties to come to an understanding. It's worth reading the entire twitter report, not really very long. Should take substantially less time than catching up with postings here most days!


Edit: the SEC is holding the court in contempt.

 

[lascavarian]

Materialness is already legally defined, the ambiguity arose from "reasonably could be" and there is no way to improve on that without either discarding the requirement or defacto muzzling Musk.

Agreed that the "reasonably could be" standard is ticket back to see Judge Nathan. I think the SEC would be wise to rethink that language. They got their fine and day in court so they should feel they have room for some give backs IMO.