
Elon Musk faces investor lawsuit - osrec
https://www.bbc.co.uk/news/business-45155268
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jacknews
Did no-one pick up on the proposed price, 420 ?

Maybe he should have settled for 419

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F_r_k
Curious question: what's wrong with 420$/share ?

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crunchlibrarian
Well he was going to sell for $69 a share but then he tried $666 a share but
that was too high so they settled on $420.

The point is Musk is looking increasingly like a joke, which is not what you
really want in a massive company that is hemorrhaging money and could actually
collapse if Model 3 demand doesn't pick up.

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jmpman
The backlog of Model 3 reservations is rumored to be over 400,000. Of course
I’ve never seen the split out of reservations for $35k variant versus the
currently available $50k+ variety. (Yes it would be possible for Tesla to
calculate the demand signal even though people waiting for a $35k variety look
like customers that haven’t use the configurator) My hypothesis is that his
financial model needs more customers of the $50k variety, isn’t seeing the
demand, and needs to quickly go private before the cash flow becomes
problematic again. The evidence I have to support this hypothesis is the lead
time for recent dual motor Model 3. It’s very short. Once that demand dries
up, all that’s left is a horde of angry masses waiting for their $35k car that
they were expecting to arrive with a $7500 tax credit. Of course my hypothesis
is ignoring international sales, which may provide a large enough buffer of
premium model demand to keep this ship afloat.

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Qworg
The recent push to get Model 3's out with hand labor is going to wreck them in
about six months as the recalls and repairs start to roll in.

Tesla had all sorts of tolerance problems early and moving to hand assembly in
a tent won't improve it.

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bogomipz
As someone who doesn't follow Tesla development very closely I am curious is
"hand labor" still how Teslas are being produced?

I remember hearing this a while back but thought maybe some of the delays in
ramping up production might have been due to switching to an automated/robotic
process. Is this not the case?

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sergers
To hit the 5000 in one week (technically took them 8 days), they setup
additional assembly lines in tents, and additional hand labor.

Hand labor, working extra shifts, is how they hit their mark.

They continue to use it while they address the automation challenges

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bogomipz
Oh wow. That doesn't sound sustainable. Is there any concern about quality and
consistency of cars produced by "hand labor" in tents? Or is that a non-issue?

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Qworg
Definitely. Robots aren't used in factories for speed, primarily. They're used
for consistency and quality control.

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davesque
It's surreal to watch Musk throw away his reputation and success so quickly
and casually. Then again, a lot of things have seemed pretty surreal lately.
Welcome to the brave new world of post-reality.

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nickik
He still has his success, unless you actually believe that this lawsuit will
bring down the whole company. Also, SpaceX will not be effected.

In terms of his reputation we will see, but most people don't care about
obscure stock manipulate rules that he might or might not have violated.

You are way overstating your case.

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davesque
I'm really not. Anyone who's been paying attention lately has seen his
behavior become more erratic. It doesn't matter if you're familiar with the
vagueries of securities law.

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csomar
Even if the funding is secured, isn't this what "Inside Trading" is about? I
really wonder if Elon is aware about what he is exactly doing.

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unmole
Insider trading is trading using non-public information that you had a duty to
protect. So, whatever Musk is (allegedly) doing is not insider trading. It
could however still be securities fraud.

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csomar
He is using non-public information to liquidate shorters. Isn't that it?

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nickik
No. He is allowed to announce company plans on Twitter. When he said it, it
became public and that is legal.

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Leary
Funding secured

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jiveturkey
there is a small chance he’s playing a game. by not saying more about the
funding , he’s fishing for a lawsuit that he expects to win.

unlikely but possible.

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gamblor956
I know techies like to think that Elon is somehow getting out of this, but
legally, if the funding was not secured in full at the time of the tweet, he's
fucked under US and EU securities law.

And no one in their right mind tries to fish for a lawsuit. They are
expensive, time consuming, and distracting.

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talltimtom
Why would it have to be secured in full? He wrote “funding secured” that just
implies a non-zero level of funding.

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gamblor956
No, it implies that all the necessary funding was secured because he didn't
qualify his statement. Not announcing that they did not have full funding
would have been a material omission under securities laws and would have been
just as actionable legally speaking.

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londons_explore
His claim that existing shareholders can keep their stake could mean the
projected amount of funding required is very small.

It could mean his personal bank account could cover it.

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baybal2
>Plaintiff Kalman Isaacs alleges the announcement was aimed at "completely
decimating" short-sellers.

So, what's the point? I think it very well did, but how that's a crime?

It is like music companies suing Napster for them going bankrupt. Or for a
person who bet on a losing horse to sue the winner for making him "loose
money."

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malshe
The point is actually in the next line :"His lawsuit, and another filed by
William Chamberlain, accuse Mr Musk and Tesla of violating federal securities
laws and ___artificially_ __inflating Tesla 's share price."

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wand3r
Short sellers artificially devalue Tesla’s price (and many companies that ate
shorted) and thats part of the game. Tesla is actually structured as a
financial company, especially with SCTY being combined. The easiest way to
destabalize a financial company is destroy counterparty trust. There was a
video about the Tesla shorts doing this to other smaller less well known
firms. Both media blitzs by Shorts and Musk are questionable but thats how it
works.

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gamblor956
That's not at all how it works.

Musk is the CEO of Tesla and made a public statement. Under US and EU
securities laws, if he lied in the tweet, he's liable for the losses of anyone
who traded (or didn't trade) based on the tweet, whether or not they were a
short seller.

Shorts don't speak for the company. While releasing false information for the
purposes of manipulating stock prices is illegal, none of the Tesla shorts
have been proven to have done so.

