Slashdot Mirror

← Back to Stories (view on slashdot.org)

Elon Musk Should Be Held In Contempt For Tweet, SEC Tells Judge (fastcompany.com)

Posted by BeauHD on from the now-he's-done-it dept.

The Securities and Exchange Commission has asked a federal judge to hold CEO Elon Musk in contempt for breaking terms of a settlement agreement with a tweet. The SEC cited an "inaccurate" February 19 tweet about production. Musk tweeted alongside a photo: "4000 Tesla cars loading in SF for Europe." He replied to the tweet adding: "Tesla made 0 cars in 2011, but will make around 500k in 2019." Fast Company reports: It's that "will make around 500K in 2019" part that angered the SEC, which had this to say in legal papers filed with a Manhattan federal court: "He once again published inaccurate and material information about Tesla to his over 24 million Twitter followers, including members of the press, and made this inaccurate information available to anyone with Internet access." The SEC says the tweet violated an agreement that was part of a settlement Tesla made with the regulator last year. Musk promised to consult with Tesla's board before he made any statements on social media that could affect the stock price of the company. Tesla also agreed to pay $40 million in penalties and Musk agreed to step down as chairman of the board.

3 of 274 comments (clear)

  1. Fake News by SuperKendall · · Score: 5, Informative

    As Elon pointed out, he gave that figure in the last earnings report way before that tweet....

    Like Musk said - how embarrassing for the FCC! It sure does seem like someone there has it in for Tesla, very likely someone at the FCC is compromised by some large short holder that is sweating bullets.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
    1. Re:Fake News by _merlin · · Score: 5, Interesting

      You're confusing options with delta 1 instruments. If someone was betting that the stock price would collapse, the easiest way to make a profit on it (i.e. requiring least initial outlay, margin and maintenance) is to buy a put option. You do that, and if the price falls below the strike price you make some money. If it doesn't fall below the strike price, you just lose the premium you paid for the option. No need to sweat bullets - you've already paid, you're not up for any other losses.

      Now if you want to post a bit more margin, you can write a call option. In this case, you're paid the premium, and if the stock ends above the strike price, you pay the difference. In this case you want to hope that the premium you got when you wrote the option is going to be bigger than the difference between the stock price and the strike price at expiry. But if you're writing options without delta hedging, you're basically gambling, so if you lose you got what was coming to you.

      If you want a short delta 1 instrument, the lowest initial outlay is a contract for differences (CFD). With this you get a delta 1 position, but you pay maintenance each month. The stock price needs to fall at rate faster than the maintenance you're paying on your CFD position. You're not going to be shitting bricks in this case either. You've been paying the whole time you've had your position open, and if the stock price isn't falling fast enough you just swallow the loss so far and close the position.

      Actual short stock positions require an arrangement with a security lender if you want to hold them for more than a day. The lender is going to charge you maintenance on the position and require you to post margin. So as with the CFD, you'd cut your losses at some point if the stock price isn't falling as fast as you'd like.

      I'm not going to try and give an overview of futures here, but as with the other delta 1 strategies there's no strike price involved. The only people who'd be shitting bricks would be people who wrote deep in-the-money calls and didn't hedge their positions. But they should've known what they were getting into.

    2. Re:Fake News by No+Longer+an+AC · · Score: 5, Insightful

      I think Steve Jobs was an asshole, but I also consider him a hero and more importantly a genius.

      And I think Elon Musk is an idiot, but he's also a genius...and a hero. Okay, maybe not a hero, but I'm jealous of his success and I really do wish I had a Tesla and also a rocket that could launch me to Mars.

      I'll get a Tesla sooner or later. As soon as the transmission falls out of my 20 year old Detroit garbage which the "Check Engine" light tells me is due to happen any mile now.

      I do keep hearing horror stories about Teslas, but most of them sound overblown and I've been hearing horror stories about cars all my life. Did you ever hear the one about the Pinto?

      I only say Musk is an idiot because he sometimes blurts out stupid stuff that he probably wouldn't say if he weren't so stoned (kind of like me). All the problems with Tesla...quality control, production numbers, whatever...those are all expected from a relatively new car manufacturer and when was the last time a new car manufacturer ramped up to the level of Ford or GM?

      Tesla still has a long way to go, but when Ford recalls nearly 2 million vehicles.... I dunno...I guess when Ford recalls 2 million vehicles I'm glad I drive a Chrysler.

      So Ford just recalled 1.8 million vehicles which nearly equals their annual production of 1.9 million vehicles. Holy shit! Can you imagine the bad press that would ensue if Tesla had to do that? But with Ford, hardly anyone blinks an eye.