Back on August 7, 2018, Elon Musk tweeted, “Am considering taking
Tesla private at $420. Funding secured.”
tweet was an attempt, and a momentarily successful one, at
manipulating Tesla’s stock higher.
addition to being manipulative, the tweet constituted as fraud.
Not only did Mr. Musk never have a deal to take Tesla private, but
he did not have any funding secured.
to back out of the regulatory prison he’s found himself in, Mr. Musk announced
a Tesla blog on Friday, “I believe the better path is for Tesla to
Elon Musk really think reversing course and remaining public is his
Get Out of Jail Free card?
he think the U.S. Securities and Exchange Commission is stupid enough
to give him a pass because he’s “building products that people love
and that make a difference to the shared future of life on Earth.”
he think that he’s too big to fail and too important to be subjected
to petty securities laws?
there’s only one way to tell.
today I’ll break it all down for you.
is going to come back and haunt him all the way to jail where he
Not Above the Law
Elon Musk think we’re all stupid?
he thinks that.
wrong, and he just dug himself an even deeper hole with his latest
manipulative posting. No matter what he thinks, the law is law – and
he isn’t above it.
regulations are clear on what constitutes manipulation and fraud
applicable in this case.
Musk knows he’s in trouble. He and Tesla’s other board members have
been served SEC subpoenas.
what Mr. Musk posted
and what’s manipulative and
fraudulent about what he’s trying to spin. (My comments are beneath
- “Earlier this month, I announced
that I was considering taking Tesla private. As part of the
process, it was important to understand whether our current
investors believed this would be a good strategic move and
whether they would want to participate in a private Tesla.”
Then how come the process didn’t include asking current investors if
going private was a good idea before
about it? And how could he ask shareholders and not risk them buying
more stock and selling it out at a takeout price?“Our investors are extremely
important to me. Almost all have stuck with us from the time we went
public in 2010 when we had no cars in production and only a vision
of what we wanted to be. They believe strongly in our mission to
advance sustainable energy and care deeply about our success. I
worked with Silver Lake, Goldman Sachs and Morgan Stanley, who have
world-class expertise in these matters, to consider the many factors
that would come into play in taking Tesla private, and to process
all the incoming interest that we received from investors to fund a
go-private transaction. I also spent considerable time listening to
current shareholders, large and small, to understand what they think
would be in the best long-term interests of Tesla.”
does “work with” mean? Silver Lake wasn’t paid, Goldman Sachs wasn’t
officially engaged, and, according to reports, Morgan Stanley wasn’t
consulted or engaged before Mr. Musk’s first tweet and may not be
engaged even now.
the SEC hasn’t already subpoenaed Silver Lake and Goldman, they will
now. They’ll also have to chat up Morgan Stanley. And these banks are
processing all the incoming interest Tesla received? Since when does
Goldman and Morgan Stanley do pro bono work for billionaires and their
companies? And how many current large and small shareholders did Mr.
Musk speak with prior to his initiate going private tweet? I’m sure
the SEC would like to know.
- “Based on all the discussions
that have taken place over the last couple of weeks and a
thorough consideration of what is best for the company, a few
things are clear to me:”
maybe you could go to jail?
- “Given the feedback I’ve
received, it’s apparent that most of Tesla’s existing
shareholders believe we are better off as a public company.
Additionally, a number of institutional shareholders have
explained that they have internal compliance issues that limit
how much they can invest in a private company. There is also no
proven path for most retail investors to own shares if we were
private. Although the majority of shareholders I spoke to said
they would remain with Tesla if we went private, the sentiment,
in a nutshell, was ‘please don’t do this.'”
wonder if Mr. Musk talked to “most of Tesla’s existing shareholders”
before or after his initial tweet. He must have had to take a lot of
time to have so many thousands of conversations; no wonder the Model 3
is behind in production. And if there were talks with advisors and
bankers and shareholders before the infamous tweet, wouldn’t Mr. Musk
know he’d be hurting the retail shareholders and institutions that
can’t be in private deals, because
there’s no liquidity
for them, but considered
- “I knew the process of going
private would be challenging, but it’s clear that it would be
even more time-consuming and distracting than initially
anticipated. This is a problem because we absolutely must stay
focused on ramping Model 3 and becoming profitable. We will not
achieve our mission of advancing sustainable energy unless we
are also financially sustainable.”
to self – Mr. Musk, going private wouldn’t be so hard if you had
- “That said, my belief that there
is more than enough funding to take Tesla private was reinforced
during this process.”
then, the SEC will love to see the firm commitments, and so would we
- “After considering all of these
factors, I met with Tesla’s Board of Directors yesterday and let
them know that I believe the better path is for Tesla to remain
public. The Board indicated that they agree.”
a compliant board. They agreed that remaining public was a good idea
after supposedly agreeing that going private was a good idea. Or, are
they just trying to save their own skins, too?
- “Moving forward, we will
continue to focus on what matters most: building products that
people love and that make a difference to the shared future of
life on Earth. We’ve shown that we can make great sustainable
energy products, and we now need to show that we can be
sustainably profitable. With all the progress we’ve made on
Model 3, we’re positioned to do this, and that’s what the team
and I are going to be putting all of our efforts toward.”
WANT TO PERSONALLY THANK YOU, Mr. Musk, for saving the world, and I
hope the SEC sees you as the savior you are, too.
- “Thank you to all of our
investors, customers and employees for the support you’ve given
our company. I’m incredibly excited to continue leading Tesla as
a public company. It is a privilege.”
a bunch of backsliding, manipulative, reverse narrative, “save our
souls” kind of you-know-what.
You Thought Mr. Musk Was Corrupt…
face it: Mr. Musk’s brilliance is outweighed by his crookedness.
the corruption doesn’t end with him getting subpoenaed.
something even more sinister going on that you need to know about.
Something that even the esteemed Elon Musk doesn’t know about – so we
won’t be getting that tweet.
now – even as millions of investors have begun to believe stocks
will never crash again – the greatest economic catastrophe of our
generation is about to blindside the stock market.
decades ago, corrupt money managers and politicians buried a $6
trillion time bomb at the very heart of the U.S. economy.
my friend and colleague, Money
Morning Chief Investment Strategist Keith
Fitz-Gerald, has been doing extensive research
on this very topic. And his research says that this time bomb will
detonate no later than Halloween – Wednesday, October 31 – of this
when this bomb goes off, the average stock traded on Wall Street
will plunge by at
least half. Probably even more.
will lose everything. But the thing is, this isn’t the first time
that this guy’s predictions have come horrifyingly true. In 2000, he
told everyone that tech stocks were about to crash – and that they’d
take the entire economy down with them when they did.
in 2007, he warned his readers that a handful of subprime mortgage
companies were about to fail and bring the economy to its knees.
it’s happening again.
are about to suffer one of the most extreme crashes in history, and
millions of investors don’t have a clue.
will be – by far – the most painful stock market crash in memory.
But, there’s a way that you can shield yourself when this time bomb
blows everything else to smithereens.
Keith has found, amid this chaos, a way that you could grow $1.5
million wealthier this year while everyone else is left to pick up
only 64 days away… And the results of this crash will be far scarier
than any ghosts or goblins or creatures of the night.
The views and opinions expressed
herein are the author's own, and do not necessarily reflect
those of EconMatters