Back on August 7, 2018, Elon Musk tweeted, “Am considering taking Tesla private at $420. Funding secured.”
That tweet was an attempt, and a momentarily successful one, at manipulating Tesla’s stock higher.
In
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.
Now,
to back out of the regulatory prison he’s found himself in, Mr. Musk announced on
a Tesla blog on Friday, “I believe the better path is for Tesla to
remain public.”Does
Elon Musk really think reversing course and remaining public is his
Get Out of Jail Free card?
Does
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.”Does
he think that he’s too big to fail and too important to be subjected
to petty securities laws?
Well,
there’s only one way to tell.And
today I’ll break it all down for you.
This
is going to come back and haunt him all the way to jail where he
belongs…
He’s
Not Above the LawDoes
Elon Musk think we’re all stupid?
Yeah,
he thinks that.He’s
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.
SEC
regulations are clear on what constitutes manipulation and fraud
applicable in this case.Mr.
Musk knows he’s in trouble. He and Tesla’s other board members have
been served SEC subpoenas.
Here’s
what Mr. Musk posted
on Friday and what’s manipulative and
fraudulent about what he’s trying to spin. (My comments are beneath
the quotes.)- “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.”
What
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.
If
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:”
- “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.'”
- “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.”
- “That said, my belief that there is more than enough funding to take Tesla private was reinforced during this process.”
- “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.”
- “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.”
- “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.”
If You Thought Mr. Musk Was Corrupt…
Let’s face it: Mr. Musk’s brilliance is outweighed by his crookedness.And
the corruption doesn’t end with him getting subpoenaed.
There’s
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.
Right
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.
Because
decades ago, corrupt money managers and politicians buried a $6
trillion time bomb at the very heart of the U.S. economy.
Now,
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
year.
And
when this bomb goes off, the average stock traded on Wall Street
will plunge by at
least half. Probably even more.
Millions
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.
And
in 2007, he warned his readers that a handful of subprime mortgage
companies were about to fail and bring the economy to its knees.
Now,
it’s happening again.
Stocks
are about to suffer one of the most extreme crashes in history, and
millions of investors don’t have a clue.
It
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.
And
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
the pieces.
Halloween’s
only 64 days away… And the results of this crash will be far scarier
than any ghosts or goblins or creatures of the night.
Courtesy
Shah Gilani, Wall
Street Insights & Indictments (More
by Shah here)
The views and opinions expressed
herein are the author's own, and do not necessarily reflect
those of EconMatters.