SEC Sends Subpoena To Tesla In Probe Over Musk's Take-Private Tweets (bloomberg.com) 273
The U.S. Securities and Exchange Commission sent Tesla a subpoena regarding Elon Musk's effort to take the company private, "indicating the regulatory scrutiny of his statements have reached a more serious stage," reports Bloomberg. Last week, Musk tweeted he was considering taking Tesla off the market and had "funding secured" for the deal. From the report: Musk exposed himself to legal risk by tweeting Aug. 7 that he had the funding for a buyout. Almost a week later, the chief executive officer said the basis for his statement was conversations with Saudi Arabia's Public Investment Fund, which first expressed interest in helping take the company private in early 2017. Tesla's board has since clarified that it hasn't received a formal proposal from Musk, who's also chairman, nor has it concluded whether going private would be advisable or feasible. Tesla may face potential regulatory challenges beyond the SEC investigation. The company probably will need approval of U.S. national security officials if Saudi Arabia finances the effort to take the company private, and President Donald Trump's administration has been stepping up scrutiny of foreign investment in American technology.
Musk sent out pair of shorts to a short trader (Score:5, Funny)
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Did Musk do anything different that Trump? Trump says things and takes no action.
Where is the drug price reduction? Where are affordable universities?
What about the investment to combat the infrastructure that is crumbling, or has crumbled?
All that Musk did was think aloud. You don't have to believe him and you do have to analyze and take / make your own decisions.
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At least the trader won't have to cover his arse every time he takes a shower.
So who will end up buying up Tesla? (Score:2)
The last time a car manufacturer tried its luck too much on the stock exchange (earning there intermittently more than from its production) it ended up being bought up by a competitor. Someone still remembers Porsche 'buying' Volkswagen [automobilemag.com]?
This also included 'interesting' communication of the CEO to the market. Maybe Musks wants to step into Wiedekind's steps?
Didn't I tell you? (Score:3, Informative)
I'm not one to say, "I told you so", but if you look at the comments from when this story first came out, you will see I commented that his obvious attempt to manipulate stock price could get him in serious trouble with the SEC. A long thread of Musk fans and the Anonymous Coward telling me that was nonsense and nothing Musk did was improper followed. Matter of fact, the thread is still active with back-benchers arguing with me about how Musk doesn't need to do any of this because he's a billionaire and really doesn't care about the stock price of Tesla.
Well...
https://youtu.be/9AajslFuPro [youtu.be]
Here is the thread. I told you so.
https://slashdot.org/comments.... [slashdot.org]
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Being asked for information when the public is wringing their hands, as you are, is not "serious trouble." It is just the expected next step, no matter what the legalities are.
If the media is fretting for a whole fucking week, yeah, the related regulatory agency is going to send some subpoenas. That means a request for information. That is all it means.
Also, you used the phrase "back-bencher," but you don't seem to comprehend the meaning. It means you. Not just them.
Re:Didn't I tell you? (Score:5, Insightful)
A subpoena is not "asking". It is demanding, and to get one you have to convince a judge that there is probable cause. You can consider it a search warrant, except for documents, testimony and information instead of physical evidence.
Re:Didn't I tell you? (Score:5, Informative)
A subpoena is one step below a warrant, and one does not generally have to convince a judge of anything to obtain one. They are often issued by the clerk of the court, or even by the lawyers themselves. Or, as in this case, it was directly issued by a federal agency.
If one is served a subpoena that they believe is invalid, they must file a formal objection with the court. Simply ignoring a subpoena, even an improper one, is grounds for penalty.
A warrant, in contrast, is an authorization by a judge or other "competent official" for an officer to perform an act that would otherwise be illegal, most frequently to arrest someone or to perform a search, but is also used for executions and myriad other things.
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That's right. No judge needed in this case. Just the SEC. But it's the first step.
If this private buyout from Musk fails to materialize, the FBI will get involved, I guarantee.
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and to get one you have to convince a judge that there is probable cause. You can consider it a search warrant
So you need to say pretty please?
Re:Didn't I tell you? (Score:4, Funny)
Bitch, here on Slashdot, I am the very definition of a front-bencher. I got a motherfucking bench down in front all to myself. It's possible that nobody wants to sit near me, but nonetheless, the bench is in front. I'm like goddamn Jack Nicholson at a Lakers game up in here.
Re:Didn't I tell you? (Score:5, Interesting)
Not true. The SEC initiates formal investigations by issuing what's called a Well's Notice to a company. These are not public and companies aren't necessarily obligated to report receiving one. There is some debate on whether its legal for a company to sell more stock without disclosing a Wells Notice, however. There was some suspicion that Tesla already received one looking into the truthfulness of past production/financial guidance claims.and how that would adversely effect their ability to raise more capital (that they desperately need) - it would also explain Musk losing his mind lately. Disclosing the existence of a Wells Notice obviously hurts a stock's price. Actual subpoena's usually mean the company is not complying with the requests outlined in a Well's Notice.
I'm not sure if the reports of a "subpoena" in the buyout tweet case refers to a Wells Notice or actual subpoenas. That is yet to be seen. I believe they would have to disclose subpoenas as a material event in an 8K.
Re:Didn't I tell you? (Score:5, Funny)
Protip: if you don't know whether the apostrophe should be there, just go 50:50.
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It's Wells Notice, no apostrophe. Named after John Wells. I didn't catch it.
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Correction: you didn't catch them.
Re: Didn't I tell you? (Score:2)
Don't bother responding to the apostrophe Nazi; it just encourages him.
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Don't bother responding to the apostrophe Nazi; it just encourages him.
Surely you should have used a colon rather than a semi-colon there?
Re: Didn't I tell you? (Score:2)
I don't care how you abuse your colon; I'm quite familiar with how to use mine.
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No, Wells notices are at the *end* of an investigation. Saying "You fucked up, we're bringing charges"
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It depends. Wells Notices signal the intent to bring formal enforcement actions which is usually the only notice of a formal investigation a company receives. The SEC asks questions all the time but that doesn't necessarily mean a formal investigation is taking place. I could'e been clearer in my description though. The SEC is very vague and rarely publicizes anything until they bring charges as simply asking questions can decimate a stock if it becomes public.
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The rules have changed dramatically since then to eliminate naked shorting. It is very much a conspiracy theory at this point. Anyone who blames naked shorts for their stock woes are either completely ignorant or lying to your face (or both).
Requests were a long time ago. Probable cause (Score:2)
The SEC "requested* documents related to probable securities law violations by Musk some time ago. A subpoena is a demand by or on behalf of the court and you can go to jail for ignoring it.
Because it falls under "search and seizure", the fifth amendment requires probable cause or other appropriate justification under the 5th. Just as with searching a vehicle, that can happen to ways - a court can rule *ahead of time* that there is probable cause, or an officer can, in some situations, conduct a search if t
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The SEC is the regulatory agency with subpoena powers. One does not get to simply ignore their requests for information. Doing so is guaranteed to bring the stiffest enforcement action.
/|\ found the DeVry grad. (Score:2)
If it's a request why does its name translate as "under penalty"?
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Because what you submit in response to the request needs to be true, or it's perjury / violation of a court order?
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Because what you submit in response to the request needs to be true, or it's perjury / violation of a court order?
So it's not a "request" in any normal sense of the word then is it?
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Actually, he's been cleared by the SEC for tweeting information like that in the past. Turns out that his twitter account is more widely read and re-reported than most press releases are.
This investigation is probably looking into the "funding secured" bit. You can't really say things like that unless they're actually true without people starting to think "market manipulation"
Re:Didn't I tell you? (Score:5, Informative)
Couple things:
The SEC has their own subpoena powers. No judge necessary. Companies agree to comply as part of the process of going public.
The SEC only has civil jurisdiction, not criminal. The only thing the SEC can do is levy fines and bar company officers from being officers. The DOJ (FBI) will have to get involved for indictments to happen.
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But what the subpoena is not is a "request". I'm pretty sure that CEOs generally don't want to get a subpoena from the SEC.
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Correct. However, any request from the SEC is pretty much a "subpoena" especially in the context of the anonymous reports we're discussing. Formal SEC investigations are very technical and words matter, a lot. Specific wording mean little to "journalists" nowadays.
We really don't know much given the reporting so far and probably won't unless the company tells us or the FBI gets involved.
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Couple things:
The SEC has their own subpoena powers. No judge necessary. Companies agree to comply as part of the process of going public.
The SEC only has civil jurisdiction, not criminal. The only thing the SEC can do is levy fines and bar company officers from being officers. The DOJ (FBI) will have to get involved for indictments to happen.
While they are not able to do criminal prosecutions they do refer cases they think require criminal prosecutions to the DOJ.
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Yes, just like every other federal regulatory agency. The DOJ is free to choose whether to pursue prosecution or not.
Criminal stock manipulation cases are notoriously hard to prosecute. They pretty much have to have that exec admit to whatever they want to charge on tape or in writing. Exchange-listed execs usually have exponentially more resources at their disposal than the SEC or DOJ prosecutors. Teams of lawyers filing for years of delays, etc. Plus the criminal burden of proving intent. The SEC ha
Re:Didn't I tell you? (Score:4, Interesting)
Musk made a fraudulent tweet to manipulate his stock price. It's both illegal and unethical. Now imagine if, say, an oil company executive pulled this shit. The exact same people who are defending Musk would be screeching for the oil company exec's immediate imprisonment and being fined into starvation.
Welcome to 2018, where facts don't matter and right vs. wrong are a function of political correctness. Enjoy your stay.
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Better still, imagine the CEO of Microsoft or Zuckerberg pulling this shit. You'd be able to see the torches and pitchforks on Slashdot from space.
Re: Didn't I tell you? (Score:2)
Musk made a fraudulent tweet to manipulate his stock price.
Nice allegation. Be a shame if someone asked you to prove it.
Re: Didn't I tell you? (Score:2)
In context, this means precisely one thing: that Mr.
Musk, at the time when he made the said statement, had on himself the full amount needed to buy the stock that could potentially end up for sale (about $80 billion), or that he had a contract for this amount coming from elsewhere.
It means no such thing. His tweet merely implies that he had received an offer for the funding, and was considering it. No part of the tweet implied either that he had the money in his possession, nor that any contract had been signed.
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Days I find myself wholeheartedly agreeing with Jim on something make me fear the Apocalypse has finally arrived, but what the hey... pass the popcorn. I've been waiting a long time for reality to catch up to this modern-day Music Man.
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You sound like a fag and your shits all retarded
Take it easy, Elon.
I don't think that's Elon. Sound's more like Dr. Lexus [youtube.com] to me.
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Ah, that's where Elon got it.
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You must be new here.
In the age of Trump Tweets. . . (Score:5, Interesting)
However, I do agree with the Musk critics that say he should not be the CEO of a public company. . . that is why Tesla needs to go private.
Let good engineers quietly build stuff (and occasionally vent on Twitter, without regulatory consequence) and the do-nothing CEO's of public companies continue do nothing and look good in the name of shareholder value.
I just want to drive their cars. . . the rest just seems like a silly distraction.
Re:In the age of Trump Tweets. . . (Score:5, Insightful)
There are so many different theories of what a CEO's behavior should be, it is pretty funny when critics talk about their own preference as if it might be the One True Way. It should be clear that there isn't any such thing.
In other years, or with CEOs having a different name, it is often stated casually that part of their job is to spin everything that happens in the light that best boosts the stock price. And then if his name is Elon Musk, the same people freak out because he didn't file an 8-K, even though the rules are really clear and explicit that an 8-K filing would be needed after the company consummated a deal to privatize. That's how far the critics are from reality, generally. It is highly comical.
Which is it, do you want CEOs to do nothing, or to do something? The stock price went up after his comments, because people believed them, and now it is a week later and we know that a deal is in fact being negotiated. That's verified. People want to chase him around with handcuffs over their narrow parsing of the word "secured," even though the standard for truth is not that every single possible dictionary definition of the word are all simultaneously true. In fact, if any of the common meanings of the word are true, then it is obviously true. People don't even remember the difference between truth and lies while they're chasing him with their imaginary handcuffs. And they certainly don't remember it while they're bloviating about how much they know about the job of a CEO. They don't even know that most companies would prefer to have a controversial CEO who can keep their company in the news! And if the public thinks he's some brilliant engineer, there is almost no way that it hurts the company; even all the nonsense of people chasing him with their imaginary handcuffs, it benefits Tesla immensely. They're a bigger part of the public mindspace than BMW or Mercedes Benz! Not only has he made his tiny car company the absolute center of public thought about his industry, he even has them associated with the engineering of fuckin' space ships! He's like, knocking it out of the park with a Galaxy-class performance as CEO, and the supposed "nerds" on slashdot are too busy sucking their own herpaderp to notice the difference between "I don't like him" and "he's doing a bad job."
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If it's being negotiated now it clearly can't have been confirmed at the time he tweeted that it was assured.
Negotiated? (Score:2)
First people believed that "funding (was) secured" and now people believe that a deal is being negotiated?
Re:In the age of Trump Tweets. . . (Score:4, Informative)
How the CEO of a publicly-traded company should act are not "theories". There are laws regulating it.
A CEO is breaking the law if he makes false statements to manipulate his stock price. A.K.A. "Funding secured" (to burn the shorts). CEO's are also not allowed to buy or sell their own stock while privy to non-public material information. A.K.A. a buyout at 40% above the current price with funding secured.
There are several other laws regulating behavior that officers of public companies must abide by but those two are pretty basic.
Re: In the age of Trump Tweets. . . (Score:2)
Re:In the age of Trump Tweets. . . (Score:5, Insightful)
I have had Wall Street types find out I own a Tesla and go into some kind of rant of why the company is doomed, that "everyone I talk to is shorting them", and all their cars catch on fire. That is not normal "car" talk. That is crazy "they faked the moon landings" type shit. It is like the entire industry is acting like some kind of cult because a public CEO had the gall to stand up to them.
That is why I think Tesla should go private. Not because Elon Musk is crazy, but because Wall Street is. . .
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Well, I think in the end, this is a cultural war between those in the wealth creation business (Elon Musk/Tesla) and those in the wealth transfer business (Wall Street).
I agree there is a culture war, but I think the reason is different. There are several different things that motivate people. I'll name a few of the main ones:
Wall Street is HEAVILY motivated by greed. They want a cash return above all. Musk's investment in Tesla seems to be driven largely by a desire to improve life for other people. This conflict of motive seems to be the issue at hand.
Re:In the age of Trump Tweets. . . (Score:4, Informative)
But, specifically, which party is gaining wealth at the expense of which party in Tesla's case? Keep in mind, if Tesla goes private at $420 a share, everyone who has ever bought long and held to that point will realize a significant return. Where did that wealth come from? It was created turning boring, commodity materials into the best car I have ever owned.
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That has only been the "basis for Wall Street" since the tech boom (and subsequent bust) leading up to 2000. For decades prior buying and selling stock was a way for established companies to generate funds to expand allowing those willing to share the risk to profit from the gains. The rigged casino that it's turned into the past 20 years was never the intent of regulated markets.
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Note that I said "regulated markets". The ones that emerged following the 1929 crash and Depression caused by stock manipulation that people like Musk are repeating now in contravention of those regulations.
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Capitalism exists because good ideas for creating new wealth need funding before they become self-sustaining. Regulations are tangential to this point about the fundamentals of capitalism . . .
Comparing Tesla to the types of securities fraud that led to the Great Depression is a low bar to disprove. . . Most fraud from that period was simply making up fake companies [slashdot.org] for people to invest
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You do realise that Wall Street now on
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losing billions to sell thousands... When does it stop?
The first "stop" occurs when you get your facts right. . . 2018Q2 Rev: $4B, Net Loss; $0.7B, YTD Rev growth:43% [sec.gov]. Go find me a mature company that is always profitable that increased their revenues by 43% in the last year. . .
The second "stop" occurs after Tesla goes private, and all the crazy short sellers go after some new victim (if they have not already killed themselves off after their bad bet against Tesla). At that point, you will have less public information to (mis)-inform yourself with, so your
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Tesla has NEVER been profitable. Even though it's existed since 2003 doesn't necessarily make it mature either.
Yes, so you are agreeing with me that Tesla is in the "growth" [blogspot.com] stage of its business life cycle?
creating a cult of incredibly naive
I think "naive" people tend to write confusing posts where they seem to be both insult you and support your point at the same time. . . why not learn some basic finance before complaining about other people being naive?
people who believe they are going to save the planet by destroying the environment
I bought a Tesla because its a kickass car, and I love to effortlessly smoke old-timers like yourself when the light turns green. Saving the planet is a side benefit. . . and the fact that you thin
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Learn to grow a pair. . .
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"But Musk is already saying that shareholders who don't want to sell should be able to convert their stock to some form of private equity."
And that proves that Musk pulled the entire LBO story out of his ass. First, only accredited investors are allowed to hold private stock (google it for the requirements). Institutional and investment funds virtually never hold private equity. It is illiquid - meaning it can only be bought or sold once or twice a year and valuations swing wildly. Funds aren't in that b
Re:In the age of Trump Tweets. . . (Score:4, Insightful)
losing billions to sell thousands...
Yes, and $4B x 4 is $12B/year. So they are losing billion to sell BILLIONS (not "thousands").
Revenue growth is up - and so are costs, and the losses.
Yes, sacrificing profitability to increase market share might sound crazy, but it is business as usual in . . . business. For Tesla, it is a small price to pay to start dominating an entire segment of the car market. . . [forbes.com]>, and its marketcap would tend to agree. . .
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However, you are still inaccurate with your statement because if you are comparing "annualized" losses, then you should also post the "annualized" sales of "hundreds of thousands of cars."
I kind of miss when the short sellers still had hope and were posting here. There was still a lot of bs, but the debates tended to be a little more intellectually engaging. . . Don't know what your beef is with T
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Bloviating (Score:2)
Bloviating? Comical?
I think you left out "cherry picking" and "spewing."
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Feature request... (Score:2)
I think twitter needs a feature called "executive override" that routes tweets from CEOs to through their lawyers first... and they can choose to release or suppress the tweet. Seriously... It's a billion dollar idea. I love Musk and his antics, it's entertaining as hell, but this is crossing the line.
Bloomberg called it (Score:5, Informative)
Re:Bloomberg called it (Score:4, Informative)
Bloomberg ran an article titled Elon Musk's Funding for Tesla Wasn't So Secure [bloomberg.com] where they pointed out when Musk said "funding is secured" there was no actual agreement in place. His statement being factually untrue risked causing this SEC investigation.
Per recent discussion concerning fake news, I'd mention that the article linked is an opinion pice by Matt Levine as noted in the headline and it comes with a disclaimer at the end. Imho it's a worthwhile read.
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What's fake? The content of the tweet is a matter of public record, as is the relevant law (17 CFR 240.14e-8).
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What's fake? The content of the tweet is a matter of public record, as is the relevant law (17 CFR 240.14e-8).
I'm not claiming It's fake news. My claim is that the link OP provided is to an opinion piece and a worthwhile read (not a Bloomberg news article). If you wish to discuss the relevance of making this distinction there is an ongoing debate https://news.slashdot.org/stor... [slashdot.org] where consensus seem to me that it is a relevant distinction to make.
Musk never said there was an agreement in place. (Score:3)
In all likelihood, he will take Tes
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In all likelihood, he will take Tesla private, and most likely under the terms he sketches out in his initial tweets... he pretty much does what he says he's going to do, no matter how fantastical it sounds...eventually.
I don't think you can claim it until that "eventually" comes to pass. I seem to recall him promising a $35,000 full electric car, LEO launch costs of $5-6 million, and Mars one-way ticket for $200,000... none of which has happened yet.
Note how all of those are promises with actual dollar amounts. The stuff he says he'll do for X will simply not be done for X, which in cases such as reusable rockets might be fine, but not when it pertains to the stock price.
Re: Musk never said there was an agreement in plac (Score:2)
"He also promised an all electric car with a 200+ mile range which hasn't happened yet!"
- Djinn, 2003
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Note how all of those are promises with actual dollar amounts. The stuff he says he'll do for X will simply not be done for X
Re: Musk never said there was an agreement in pla (Score:2)
"He also promised an all electric car with a 200+ mile range for under $100,000 which hasn't happened yet!"
- Djinn, 2003
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Re: Musk never said there was an agreement in pla (Score:2)
"Under $100,000 would be very impressive! It'll never happen!"
- Djinn, 2003
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Re: Musk never said there was an agreement in pla (Score:2)
"If I only had a brain ..."
- Djinn, 2018
Words mean things (Score:2)
No, it's not open to interpretation - secured has a fairly specific meaning. (In this case, that funding is committed and available.) There is no reasonable way to extend "funding is secured" to mean "we don't actually have funding but we're in serious discussion" and still be speaking English.
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As to whether or not the courts have decided this, I don't know, but given you so severely fucked up your initial assertion, I'm not terribly inclined to give your second one much consideration.
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Musk explains at greater length in a blog post (Score:5, Informative)
Here [tesla.com].
Key points:
* This had been discussed with the board before the announcement
* The board agreed that the next step was to discuss with large shareholders.
* It would be unfair for the big shareholders to know of this proposal but not the small shareholders, hence a public announcement. (It isn't clear to me whether the board specifically agreed to this announcement, or whether Musk felt it was a logical consequence of the previous point.)
* "Funding secured" means the Saudi Arabian sovereign wealth fund has been eager to do this for quite some time, although Musk would like there to be other investors too.
I feel somewhat but not completely reassured by this explanation.
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Prediction: it's all a misunderstanding (Score:2, Funny)
During the investigation, it will emerge that Elon had secretly changed his legal name to "Funding secured." He will argue those words were his signature, not an assertion of fact.
Would be funny if... (Score:3)
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Totally agree. I don't know why they aren't just teleporting the cars from California to the customer instantly. What the fuck, Tesla?
You know that the cars have to actually go from the factory to the destination where the customer receives it, right? And that they purposefully delayed some deliveries into Q3 in order to get another quarter of the full EV tax credit for customers, right?
This isn't software, it takes time to load them all up onto trucks to take them to trains, and time for those trains to
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It's not bullshit, it's how the Federal tax credit works. With Model 3 sales increasing, they were going to ship their 200,000th car in the US in June, which would mean missing 3 months of additional tax credits for customers. They already had over 80,000 vehicles sold in the US in 2016 and 2017 [statista.com], which doesn't include any vehicles sold previous to 2016, or the first six months of 2018 which in july had them producing 3x as many vehicles per week as in 2017.
If you think it's complete bullshit, show your ma
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Re:This is what happens when you enter the stock (Score:5, Insightful)
Well, sort of - but you went to the stock market to *get other people's money*, it's not at all unreasonable to expect them to have some say in how you conduct yourself.
If you want to retain full control, as you say, don't take it public. You can't have your cake and eat it, too.
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Then they aren't very consistent then, because they argue against anything else governments do.
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Yeah, there's droves of Republicans that are always speaking out against law enforcement, prisons, military spending, and the armed forces.
No wait, those are all things they can't get enough of, and they're all done by government. You aren't even building straw men and knocking them down, you're just completely wrong.
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Shame about Elon kicking your dog.
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https://www.vox.com/2018/8/16/... [vox.com]
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This always-musk-defending Rei? https://slashdot.org/~Rei [slashdot.org]
how do you know is really a she?
She doesn't exactly leave a light digital footprint. See, for example, here [model3ownersclub.com].
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Or here: https://www.dailykos.com/user/... [dailykos.com]
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13k comments on Daily Kos? Holy smokes -- I could be excused for thinking she spends all her spare time posting around here. That Icelandic government job must be cherry indeed.