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SEC Charges Elon Musk With Fraud Over His Statements To Take Tesla Private (bloomberg.com)
U.S. securities regulators have sued Elon Musk for allegedly making false statements related to his abandoned efforts to take Tesla Motors private. Bloomberg News broke the news Thursday, citing docket entry in Manhattan federal court. Last month, Musk had expressed his intentions to take Tesla private, and that he had secured the funding. Taking Tesla private, which would have helped the company avoid making short-term commitments and goals, would be the "best path forward," Musk had said at the time. Even as investors had shown agreement to Musk's move, a few days later, he announced that after further discussions, everyone believes that Tesla should remain public. Amid all of this, some argued that Musk made the "false" claim just to hurt short-sellers. From the lawsuit: This case involves a series of false and misleading statements made by Elon Musk, the Chief Executive Officer of Tesla, Inc. ("Tesla"), on August 7, 2018, regarding taking Tesla, a publicly traded company, private. Musk's statements, disseminated via Twitter, falsely indicated that, should he so choose, it was virtually certain that he could take Tesla private at a purchase price that reflected a substantial premium over Tesla stock's then-current share price, that funding for this multi-billion dollar transaction had been secured, and that the only contingency was a shareholder vote. In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source. During a press conference, Stephanie Avakian, co-director of the SEC's division of enforcement, said: A chairman and CEO of a public company has important responsibilities to shareholders. Those responsibilities include the need to be scrupulous and careful about the truth and accuracy of statements made to the investing public, whether those statements are made in traditional forms such as a press release or an earnings call or through less formal methods such as Twitter or other social media. Neither celebrity status nor reputation as a technological innovator provide an exemption from the federal securities laws. In a statement to CNBC, Musk said, "This unjustified action by the SEC leaves me deeply saddened and disappointed. I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way."
It was probably more an act of stupidity under influence than a premeditated attempt at a short squeeze, but if you're wearing the CEO hat, you have less leeway for stupidity.
So, fraud charges secured.
Hardly shocking. He said he'd secured the funding for the buy, but he hadn't. Looks cut'n'dried, at least to this ignorant layman.
That will teach Musk to attack the president.
With the amount of money I have made from shorting this company, Iâ(TM)ve started naming the windfall after the idiots who have facilitated this opportunity.
A Musk hate thread to distract me from the Kavanaugh heardings. Well done, /. Well done.
What about the longs who bought at 375, thinking it's a "dip"? It is 275 now, who knows what it will be tomorrow. Do they deserve protection from the fraudulent claims about "funding secured"?
Thinking out loud (or on the internet) is a bad idea when people have their money tied up in your decisions.
On the other hand, I do enjoy the cartoon-ish idea of stock investors frantically shifting their shares back and forth as a CEO wavers back and forth on decisions.
Fucking owned lol
He'll pay a fine. He'd rather pay the SEC fine than let the short sellers win. Smart play by Musky.
Slashdot article is wrong. It's only against Musk, not Tesla
It appears to have since been edited to correct this error. When I first loaded this article, the HTML title element was
but its headline was (with my emphasis of those words that differed)
I reloaded again and the new title also appeared as the headline. This calls to mind both of Phil Karlton's two hard problems in computer science: cache invalidation and naming things.
They're just jealous because he can fuck hot godesses like Amber Heard and they can't.
what about when clinton was president? supposedly he raped a woman among his other activities
It's funny how Musk gets attacked all the time for any reasons they can find. If they succeed, control of the company will be taken from him and will close shortly after. It almost looks orchestrated ... oh well. I guess this is what happens to anyone that threatens the energy status quo.
Short sellers do provide a service by counter balancing the voice of shareholders who only have an incentive to see share prices increase.
Male = guilty. That's the story. That's the conclusion.
The lawsuit, filed in federal court in New York, seeks to bar Mr. Musk from serving as an executive or director of publicly traded companies. Tesla, which Mr. Musk co-founded, is publicly traded.
One of our competitors trademarked the term "hypothesis". From now on, we will call them "boneheaded ideas".
This makes me wonder what would happen if there were no rules about fraudulent claims.
Wouldn't that result in basically all claims being thought of as fraudulent until they were proven otherwise? Companies with a track record of consistently telling the truth over the long haul might gain some credibility, but everyone else is the liar that they are now.
The idea that companies are honest now because they skate on the edges of the rules is laughable.
Just look what happened before we had these laws to see. Everyone made whatever claim they wanted, people frequently bought in on it, and they lost everything. Now at least a much smaller population is willing ot make false claims, and when they do we can punish them for it. The system isn't perfect, but its better than no system at all.
I still have more fans than freaks. WTF is wrong with you people?
the law says otherwise. your silly immature view of sort selling and lack of understand of markets is of no relevance. Musk broke the law.
were false claims made by company executives that caused that dip? no? then you have no point. Musk lied and manipulated market price, that's against the law.
Charged by the SEC is a very different best to civil litigation. Rich people sue each other every day, it's no big deal.
what would happen if there were no rules about fraudulent claims
You can probably look at the stock market decades ago to get an idea. Reading stock market history from the perspective of the science of economics is fascinating.
The idea that companies are honest now because they skate on the edges of the rules is laughable.
You misunderstand the motivation for the rules. The general idea is that punishment reduces the incentives to be dishonest, not to eliminate dishonesty altogether. It is less than ideal, but it is better than nothing.
Take it easy, Rei, the DOJ will be bringing criminal charges anytime now.
Agreed. In Trump's America the fact that he's building electric cars and promoting clean energy guarantees they'll throw the book at him, irrespective of the merits. They probably would have anyway, but tweeting the way Elon Musk did sure gave them a wide opening for attack. Not his smartest moment by a long shot.
You can just look at Elon Musk's previous tweets and public communications to see that he tends to get excited about things and make promises or statements about them that are a bit optimistic.
I have no reason to believe what happened here was a snap decision on his part that going private would be a really good thing for Tesla in the long-haul. And when he got word that some of the folks in Saudi Arabia were about to dump serious money into investing in an EV, he made a bet they were referring to HIS company and made the statement he made.
Unfortunately, the Saudis sunk $1 billion of capital into "Lucid", a wanna-be Tesla competitor that doesn't even have a single finished product yet available to the public. It remains to be seen how that will turn out for everyone.
1. There is no guarantees on the stock market. You buy at the price you buy, and you sell for the price it's currently at when you sell. If people bought at 375, then they bought right before the closing bell on the day of the highest close TSLA has ever had ($379.57). That's not a good move regardless of the stock issue, or any tweets sent by anybody.
2. If the reason they bought a stock issue is because of a vague tweet, especially when that tweet came several hours before they pulled the trigger on that purchase (see timing in #1), then they are not smart investors, and this would be far from their only loss on the market. Being as there is no guarantees of investment on the stock market (see #1 again), then they are proving themselves to be the "greater fool" that every investor is looking for when they purchase stock.
I think I speak for a whole lot of people when I say that Elon should just delete his twitter account, and never log into social media again for his own sake, his companies sake, and his employees' sake. Also, this particular tweet as well as several others of the last few months are really fucking stupid and should have never been posted. But that doesn't mean that he was manipulating or defrauding the markets via Twitter.
IIANAL, but fraud means there must have been ill-intent to deceive investors, and as I understand it that intent of deception will need to be proven in a court of law.
Wouldn't it be delicious if this derailed humanity's path to the stars long enough that we didn't make it as a species?
I honestly can't think of a worse group of folks than financial lawyers, or a better group of people than SpaceX.
A government is a body of people notably ungoverned - AC
...it seemed like a bait to try get Apple to buy him out. He's getting bogged down with Tesla and really wants to liquidate and concentrate on SpaceX. Sadly for everyone it didn't work.
Seriously. They bring *nothing* to the table, and they're incentivized to shit on Tesla at every opportunity to keep the stock price down. I wish Musk would have taken it private just to spite them.
Do you have ESP?
Why would a conservative judge be nominated? The president wants a Republican judge. Good luck finding people are who are on both of those teams.
True. I'm not a Republican anymore, though I was raised that way. My point was that Kavanaugh was conservative enough for me until I found out he was a rapist. I believe in forgiving and forgetting but not when the guy denies it, is unrepentant, and shows no remorse.
On the one side, we have someone who could be humanity's best hope for escaping extinction.
On the other side, we have a bunch of rich assholes trying gambling that he'll fail, and expecting to pull some money out of thin air if they're right.
Part of me wants Elon to fail. We don't really deserve to spread our seed throughout the galaxy.
A government is a body of people notably ungoverned - AC
Charges are merely another name for accusation. YOU could be sued for fraud over Musk's statements to take Tesla private. It won't win, but it shows how meaningless "sued" is in the USA.
But, yeah, I get it, you need to sell your shorts. Truth be damned.
Next up: Corey Booker, admitted groper! Why is he even allowed to sit in judgment of Kavanaugh in the first place? Maybe the Democrats believe it "takes one to know one"?
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Cool. Then impeach Kavanaugh. Judges can be impeached - why not go that route?
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Short sellers do provide a service by counter balancing the voice of shareholders who only have an incentive to see share prices increase.
Next, tell us that HFT provides needed liquidity, because I need my other leg pulled.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Next up: Corey Booker, admitted groper! Why is he even allowed to sit in judgment of Kavanaugh in the first place? Maybe the Democrats believe it "takes one to know one"?
We know beyond the shadow of a doubt that Trump is a rapist. Granted, it wasn't considered rape to force sex on his wife in the state he was in at the time, but it would have been in any civilized place. Better not throw stones at Democrats, eh?
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Jail him now. He can share a cell with Trump.
??? Has Melania charged him with that? Is the "victim" not aware of her status? In the meantime, we have Booker openly proclaiming he did what Kavanaugh is accused of doing - and no one cares. Start with the admitted 'rapist' first...
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> We know beyond the shadow of a doubt that Trump is a rapist.
No we don't. Your insistence is not compelling.
Nah, actually, I'm sticking to balogney! Quick, sue me for fraud because you lost money on Peanut Butter futures because you're a fucking dimwit!
Maybe the SEC should sue itself too?
Wouldn't it be delicious if this derailed humanity's path to the stars long enough that we didn't make it as a species?
I honestly can't think of a worse group of folks than financial lawyers, or a better group of people than SpaceX.
Here's something you people don't understand, Tesla is owned by investment funds that pool a lot of people's money. Some of it retirement money of little people.
Do you people understand that?
Those Wall Street people are working for us in the end.
Do you understand?
Elon Musk has proven himself to be a liar and unstable - possibly mentally ill or a drug addict. Outside of the Slashdot echo chamber of Musk fanboys, Investors are quite concerned about him and horrible leadership of Tesla.
This whole Shorts vs. the Longs is a delusional fantasy Musk cooked up to rally the fans and make him seem like an underdog.
Tesla is a money losing, debt ridden cash burning train wreck and it's all Musk's incompetence that caused it. I hope the SEC looks into the Solarcity deal. That has fraud written all over it. To burden Tesla and her shareholders with that failing company was incredibly dishonest. That fantasy of Tesla owners having solar cells on their roofs and charging their Teslas is not happening. (Yeah, yeah, yeah, the fanboys will discount this story as a "hit piece" because they are all just like Creationists in their denial of facts.)
If you people would stop this worship of Musk, you'd see who he truly is.
And as far as Space X is concerned, the sooner Musk is gone the better for that company.
WTF? What service do they provide? Stock prices go down without short sellers.
Can you not?
The SEC isn't some random "rich people". It's the organization charged by the people with enforcing laws which govern investment activities and corporate governance. This is a much bigger deal than a random lawsuit.
Elon Musk is a liar and a fraud. He's gonna be ousted any day now.
I've got dry powder and it's right before the Q3 deliveries numbers ;)
Model S sales have tanked; you know the model that is much more profitable than the Model 3. Then there is all that Solarcity debt coming due.
And Tesla hasn't delivered enough 3's to make any difference.
Lying would require that he knew, at the time that he said it, that the statement was untrue.
Never attribute to malice that which can adequately be explained by stupidity.
You may have grounds to say that he's incompetent, but there is no reason to think that his claims were anything but something said in haste that was not given appropriate consideration before saying aloud.
Legally speaking, it is literally impossible to commit fraud unintentionally.
File under 'M' for 'Manic ranting'
PERIOD
FULL STOP
So the CEO of the company you invested in said something stupid? Maybe you'll learn your lesson next time. Piss off ya wankers!
*I own stock in Tesla. I'm in it for the long haul. If I lose it then oh well.
Musk will win, handily, and someone at the SEC will get fired.
Damn it. Now my wife is telling me that she believes Kavanaugh. I listened to his testimony and I think that they're both credible. I probably shouldn't have accused him of being a rapist. I honestly don't know either way. I believe both of them and don't know how to reconcile that.
??? Has Melania charged him with that?
It wasn't Melania. You do know he's been married repeatedly, right?
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
This makes me wonder what would happen if there were no rules about fraudulent claims.
How would that work out? Would it be okay for a company to outright lie about, say, their profits?
If I lie on a loan application about my income, I could conceivably be criminally and/or civilly liable. If Iie about certain facts about a car I am trying to sell you (e.g. I claim just had the brakes fixed, when my mechanic just confirmed my suspicion that the brakes were failing and I did not bother to have them fixed), I could conceivably be criminally and/or civilly liable.
What is so different about a CEO of a company who is offering one millionth ownership of a company on the public market if the CEO lies about everything? What can't that be criminally and/or civilly actionable? What is gained by allowing unlimited leeway for what is fundamentally no different from any other kind of fraud?
The idea that companies are honest now because they skate on the edges of the rules is laughable.
The rules are not expected to achieve some generic state of consistent trustworthiness. They are to prevent outright lying about certain things, so that the marketplace is honest enough to consistently attract divers investors. In the long run, that can be a win-win. More access to capital for businesses. More access to different kinds of investments to the general public.
A President and leader of a country has important responsibilities to citizens. "Those responsibilities include the need to be scrupulous and careful about the truth and accuracy of statements made to the..." "public, whether those statements are made in traditional forms such as a press release or an..." memo "or through less formal methods such as Twitter or other social media. Neither celebrity status nor reputation as a..." business moghoul "provide an exemption from..." laws.
Reasonable framework ya got there Steph...
Because preventing rapists to be appointed in the first place saves time and money, dipshit rape apologist Rapepublicans.
So you have evidence then? Why haven’t you gone to the police? Oh that’s right because you have zero evidence. In the US we have a legal system that requires evidence. Without evidence people are innocent.
Seriously, this stupid Kavanaugh hearing is asinine enough that I'd rather all the tickets were drowned in a rainbarrel.
This is a much bigger deal than a random lawsuit.
But whole premise of the lawsuit is stupid! Does the SEC really want to claim that it's illegal for a CEO to say that he might take the company private?
Would that be the SEC that enforced the laws following the financial crisis of 2008?
Remind me, how many bankers went to jail for that? Some or all of those responsible?
The FBI is on the case now. You blew it, rapist faggot traitors. He committed perjury.
Don't be evil.
Remind me what law they broke? Oh mean they didn’t break any laws.
[ Citation Needed ]
I hope Musk shuts up shop and relocates to Europe. Modern America doesn't deserve him.
So Marla? Ivana? Which one charged him with rape? Citation needed... Or is this another way of you distracting from your false claim of Tesla making money on each Model 3 they sell?
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You're assuming that shorts have some personal vendetta. They don't. In a story from May 17th 2017 when the stock was 310.18, Musk himself even says “I do believe this market cap is higher than we have any right to deserve.”
(Source: https://www.vanityfair.com/news/2017/05/even-elon-musk-thinks-teslas-stock-is-insanely-overvalued)
A few months later Tesla went on to sell 1.8 *billion* dollars worth of bonds through Goldman Sachs.(source: https://www.cnbc.com/2017/08/11/tesla-debt-offering-raised-to-1-point-8-billion-300-million-more-than-planned-on-high-demand.html)
Not to mention the acquisition of Solar CIty which so far hasn't provided much to the company. Musk has some big ideas, but I don't think shorts are being personal - from their perspective at this point it must just be good business?
Him taking it personally and making all the mistakes he's been making.. That's his fault. The smartest revenge would have been success.
Grow up
I'm a lifelong straight ticket Democrat voter... Never again. This was fucking disgusting.
Seriously. They bring *nothing* to the table, and they're incentivized to shit on Tesla at every opportunity to keep the stock price down. I wish Musk would have taken it private just to spite them.
Yeah, he wished that too, but the problem with Musk is that he can't keep his mouth shut.
The entire legal system needs to abandoned. Trivial and childish would be the most appropriate description.
tImECuBE is rEAL
When the Sun shines upon Earth, 2 â" major Time points are created on opposite sides of Earth â" known as Midday and Midnight. Where the 2 major Time forces join, synergy creates 2 new minor Time points we recognize as Sunup and Sundown. The 4-equidistant Time points can be considered as Time Square imprinted upon the circle of Earth. In a single rotation of the Earth sphere, each Time corner point rotates through the other 3-corner Time points, thus creating 16 corners, 96 hours and 4-simultaneous 24-hour Days within a single rotation of Earth â" equated to a Higher Order of Life Time Cube
And on this day, the TSLA shorts masturbated furiously.
Ivana did during their 1992 divorce. The courts, however, didn't charge him with anything (which is what your retort was gonna be). All you have to do is google it, but then you couldn't keep pushing your bullshit points.
If you want to know what would happen, just take a look at the Shanghai Stock Exchange.
Astrology fails: You didn't work "trine" in there somehow. You didn't mention GMOs, either.
He was impeached, but acquitted by the Senate.
I don't know how many women Clinton actually raped, let alone how many he screwed, but Trump is screwing all of us.
Elon, on the other hand, has only screwed all of the Tesla investors---both long and short. The stock price will go up and down a great deal before it settles down to where it should be.
As described, the book was appended with a statement from Ivana Trump disavowing that she intended to use the word “rape” in its commonly understood manner (i.e., forcible sex without consent):
During a deposition given by me in connection with my matrimonial case, I stated that my husband had raped me.
I wish to say that on one occasion during 1989, Mr Trump and I had marital relations in which he behaved very differently toward me than he had during our marriage.
As a woman, I felt violated, as the love and tenderness which he normally exhibited toward me, was absent. I referred to this as a ‘rape,’ but I do not want my words to be interpreted in a literal or criminal sense.
Oh, you mean that rape that wasn't rape per the person who supposedly made the charge, and which even Snopes says wasn't rape? That rape?
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It was the 'funding secured' lie that has Elon Musk (sounds like a Revlon perfume, doesn't it?) in trouble.
She changed her story later, probably in response to threats from Trump. And maybe she'll reveal why at some point in the future. But he clearly raped her, and you're clearly trying to make excuses for rape. That makes you rapey AF.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
So Ivana recanted, no charges were pressed, and no physical evidence. Of course you believe it was rape! Just like you believe Tesla makes a profit on each car they sell! You'll believe anything as long as it validates your world-view, facts be damned! Where are the numbers that say Tesla makes a profit?
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Sorry bro, but YOU guys are losing this upcoming election and likely the 2020 one as well. America is tired of not getting shit done in congress while the rich fucks continue to rob people every day. We don't need opinions and orange man bad thoughts provided by anyone. It is visibly evident. He outright admits stuff. He digs his own grave.
And in cases where they were accused of lying and found to have done it, were they usually banned for life from working in the same field? In that normally how the SEC handles executives?
Given that they're asking the equivalent of the death penalty (it is the worst penalty they can ask for and ends the person's career) it would look pretty bad if other executives have been found to do much much worse, and weren't banned.
I didn't say it was personal - it's just business. I don't think Soros really wanted to destroy a lot of people's retirement back in the 90s, but that was the result of his actions. Yeah, not personal, but that doesn't really mean much.
Do you have ESP?
Rich boy didn't understand that other people have rights. That's fine for a private citizen, but never a judge. And absolutely not the highest judge.
go to hell you soulless satanic son of a bitch
Score: 0, Troll
It's just like real life - the short sellers get all the mod points and exercise them to legislate against people who complain about them destroying things.
A colony on mars would Ensure this, Lets help with this endeavor. :)
[($)]
The whole reason short sellers are shits is that their mere presence devalues the stock, hurting actual investors. They sell things they don't have (from the accounts of the investors) which drives down the stock, in the hope that it will go down even further. In turn they have a motivation to push propaganda suggesting the stock will fall even further or otherwise disrupt the company at the industrial and regulatory scale (something which happens all the fucking time for large scale hedge funds who want to be more proactive about their short positions - which due to the social networks involved is almost impossible to track down and stop in spite of being highly illegal - this is basically what made Soros all his money "hedging" against political unrest around the world and then starting actual riots where people died for it to happen.) It's even happening right now - all the longs took the tact of reality (as proven by this article) by saying the SEC would sue Musk - all the shorts have been advertising and screeching about how they would sue Tesla directly (in another attempt to drive down the value of Tesla.) Don't get me wrong, Tesla is overhyped as fuck, but most of the value losses (and in turn their real-world ability to produce things based on that value/liquidity getting fucked sideways) is due to short sellers - if not for the shorts they would legitimately be likely to be profitable by now.
Musk really needs to get a president into Tesla to handle day-2-day stuff.
I prefer the "u" in honour as it seems to be missing these days.
Waah Waah I bought TLS stock without knowing a thing about investing and now its value is going to evaporate into thin air due to its CEO. I blame the shorts who saw it coming because I can't admit I didn't have a clue.
A disappointing day for America. The SEC which is paid for by American tax payers to protect investors, is now trying to destroy their investment. In the filing it says that the lead representative of a sovereign fund had agreed to fund the go private deal on reasonable terms, Elon was going to discuss this with some Tesla investors and he thought it would be unfair to do so without announcing it publicly. However, the SEC filing is written in a way that is attacking Elon. The SEC don't want fairness or justice, they want to win, you can see them clearly avoiding a question about why they moved unusually fast to investigate Tesla.
There are so many other countries that would welcome Elon, Tesla, SpaceX, Solar City and the Boring Company without all the bureaucracy, lawyers and haters that are against innovation. No wonder all the other car companies left America.
Hang in there Elon, don't let the haters get you down. Take a break and travel a bit, you'll feel a lot better.
#BelieveVictims ... unless they say what you don't want. Then calling someone else a rapist. You are pathetic and ought to be banned from slashdot the way creimer was.
Stock holders need effective management, not criminals with impulse control problems.
That's pretty impressive. He has to be the Chuck Norris of rapists.
LOL. You're as much a Democrat voter as Rei is a rich and slender Icelanding whore. That is, not at all.
This morning I googled this again to see if articles had any other comments. One of the top ones that showed up on my work PC was (I forget where from) simply titled: "SEC says 420 was a pot reference." Ummm....... ok? I think most everyone already thought/assumed/knew that. Not quite sure why it was the entire subject of an article.
Don't tweet. There. That's it. Put down your phone, get some sleep, and don't tweet.
Make love, not reality television.
Wow. I can see your example is IDENTICAL! How insightful you are. Many people's financial future is obviously affected your choice of basement cuisine.
How about all the people the bought the stock on the promise of a buyout at a significant premium?
Keep believing that. #WalkAway is real. Iâ(TM)ve voted blue my entire life. No more.
IMHO, (from all the news I read) it is clear that some people keep trying really hard to force Elon Musk out of Tesla company management! (Which would be the end of Tesla!)
I am guessing they must be the people of some other car company, trying to take down Tesla as their competitor!
I think SEC should/must not allow itself to be used by any company to attack their competitor!
If a really innovative company like Tesla ends because of SEC, it would be a historical embarrassment for SEC (and in turn US federal government) for all future times!
sure it's real, it just mostly is used by folks tired of democrats being right-wing, not by folks who think they aren't right-wing enough
The shorts did nothing; Musk did everything. Thus the charges, and thus the ~12% drop (as of right now) in stock price, from yesterday. There is exactly one guilty party here, and his name starts with Elon and ends with Musk.
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Nelson laugh
An enigma, wrapped in a riddle, shrouded in bacon and cheese
"straight ticket Democrat voter"
Every vehicle is doom to fail if the driver is competent enough to make only left turns.
Off topic this is, part of the problem you are!
~ People that think they are better than anyone else for any reason are the cause of all the strife in the world.
Oh please. Give me a break. Kavanaugh is the disgusting one.
The shorts did nothing; Musk did everything.
Are you kidding? They placed a bet on a corporation aiming to produce something that it would fail and rallied against it in the hopes of bringing down the value. ALL short sellers are parasites, without exception. Every massively successful short seller does it by manipulating the market and the small guys just stir up shit to achieve the same effect to their maximum ability. It's not a fucking game, short sellers devalue corporations to the detriment of everyone but themselves.
If someone's financial future depends on comments on TWITter, they are dim-wit.
You generally don't start with the smallest possible action when you are planning more than one.
You tear down a man's defenses brick by brick. Winning the easy cases early on yields big dividends down the road. Lose and you learn from your mistakes. Why do you think every criminal prosecutor begins with the small fry?
Manipulating the market? You mean like Musk did, and why he's being charged with fraud by the SEC?
And how does placing a bet cause harm to a company? Does betting against a horse cause it to run slower? Does betting against one football team cause it to fumble more balls? Shorts betting against the company can do nothing - management leading a company can do everything.
Shorting a stock may cause the stock price to temporarily fall a bit, but unless the company is continuously selling shares to fund operation, the short-term price of the stock does zero harm to the company. If the company needs to sell shares to continue operations, then shorts only make money if the stock was significantly overvalued. The company is only hurt if their shares were overvalued to begin with and they needed to sell shares at those inflated prices to fund continuing operations.
Consider that Tesla was worth more than Ford, GM, or BMW, all who sell an order of magnitude or more vehicles, AND all of whom not just make a profit but pay a dividend. Tesla was - and in my opinion, still is - massively overvalued. Shorts are betting against Tesla in record numbers not because they hate Musk or Tesla or electric vehicles (on the contrary, other companies selling electric vehicles, including those who ship the most EVs, do not have much if any short action), but because the fundamentals said the company was massively overvalued and due for a tumble.
Tesla has about 4-5 months of capital left; they have major bond payments coming due in November and February. They are far from profitable. They have a very high stock price, and they are going to have to sell a lot more shares to continue funding operations for at least 2-3 years before any semblance of profitability can come about. A new share sale will be greeted skeptically, and the share price will most likely tumble quite a bit beyond just the dilution of the market from new share issuance (why are they selling more shares? To pay off debt so they can continue running at a loss? Not a big-time winner).
At the end of the day, shorts only hurt a company if it's quite overvalued to begin with (meaning lots of upside to shorting) AND that company is losing money and needs to issue more shares to continue operations. Basically only when the price of the share can negatively impact your operations. Ford's seen its stock price tumble 40% over the last 5 years and they've not had a single issue with deliveries, paying dividends, and such. The falling stock price has not hurt their operational ability - because they do not need to sell shares to keep operating.
The ONLY reason a short can hurt a company is when management needs a high price for the company to survive - like Tesla. That's a management failure, not a short issue.
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Wow, victim blaming at its finest
How's life in the hypocrite lane?
Shorting is selling stock owned by others sharing your brokerage at a rate under where it would be sold in a market free of short sellers with the aim of it going down further to buy back in the future. The act of selling alone drives down the price by increasing volume on the ask side of the ledger. There is no way to short-sell and not actively drive down the value of a company as a result, but the overwhelming majority of short sellers (Soros is effectively the patron saint of this) take it further by vomiting bullshit about the companies they're shorting, and in extreme cases manipulating politics to the point of starting actual riots and getting people killed in the process. They are self-serving parasites, they aren't skilled, they don't fulfill a valuable role, they just leech off of people aiming to be productive. Short sellers are everything wrong with the modern economy.
IIANAL, but fraud means there must have been ill-intent to deceive investors
The intent, many times voiced by Mr. Musk, was to "squeeze the shorts", that is to manipulate the price up so that they would be forced to close. It also made some people buy at a very high price, because they believed they'll get the tweet offer.
The first effect Musk actively sought, and this class of victims of his lie were indeed defrauded, as subsequently it was shown quite obviously that there was no offer with secured funding to buy back the stock at $420. The second type are collateral, harmed by the half-witted attempt of the "genious" to "squeeze the shorts".
Who is Elon Musk?