Elon Musk sued for fraud by SEC, Tesla electric car company stock tanks

U.S. securities regulators on Thursday sought to force Tesla Inc. TSLA -0.67% Chief Executive Elon Musk out of the company he helped get off the ground about 15 years ago, alleging he misled shareholders when he tweeted he had funding for what would have been the largest-ever corporate buyout.

The complaint filed by the Securities and Exchange Commission came after a last-minute decision by Mr. Musk and his lawyers to fight the case rather than settle the charges.

The filing by the SEC in federal court in Manhattan threatens to deal a severe blow to the Palo Alto, Calif., electric car maker. Its brand and Mr. Musk are closely intertwined, and analysts have said the company’s roughly $50 billion market value is driven by Wall Street’s appreciation for Mr. Musk’s vision and skill as an innovator.

Tesla wasn’t named in the suit as a defendant, but the SEC is seeking to bar Mr. Musk, Tesla’s largest shareholder and its top executive, from serving as an officer or director of any U.S. public company. Tesla shares, which have been under intense pressure amid questions about the firm’s financial strength and Mr. Musk’s behavior, tumbled 9.9% to $277 in after-hours trading Thursday on Nasdaq.

The SEC said that contrary to the statements he made in several Twitter messages on Aug. 7, Mr. Musk “knew that he had never discussed a going-private transaction at $420 per share with any potential funding source.” The agency said the statements and omissions of fact caused disruption to the market for Tesla shares—which rose more than 10% the day of the tweets—and harm to investors.

“It’s an easy case,” said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. “He said in the tweet he had financing, and apparently he didn’t. … It’s about as straightforward as you can get.”

Full story here

0 0 votes
Article Rating
130 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
September 28, 2018 12:48 am

Is this the beginning of the collapse of “Green” equity in the same way the collapse of subprime mortgages triggered the financial crisis?

TinyCO2
Reply to  Mike Haseler (Scottish Sceptic)
September 28, 2018 1:43 am

There is a bit of the Madoff’s, DeLorean’s and the dot com bubble about this. His company has relied on a lot of subsidies, investments and deposits for stuff that is taking years to arrive and isn’t the most reliable when it does. I imagine that there are loans too? There is a lot of hype and not a lot of substance to the company. If buyers start to think ‘umm, maybe I’ll wait until cars are rolling off the production lines and I don’t have to risk my deposit on a company that may fold’ then the flow of cash will dry up and it will crash very quickly.

I did wonder if his talk of moving was about securing more subsidies either from the US (‘don’t leave us’) or from a new country.

Damian
Reply to  TinyCO2
September 28, 2018 2:11 am

Tesla did have a huge loan which he repaid with interest of over 20mill. 2 other car company’s had their loans wiped which were about the same amount as Tesla’s, around the same time because they couldn’t repay them.
His car production has been a bit slow though. But remember it’s not about now it’s about the future.

Bill Toland
Reply to  Damian
September 28, 2018 2:52 am

I don’t think Tesla has much of a future. Tesla has debt of 10 billion dollars which I cannot see Tesla ever repaying.

tsk tsk
Reply to  Bill Toland
September 28, 2018 7:36 pm

The tax credits they received more than offset the 20 million in interest. They substituted private equity for taxpayer subsidies (and why couldn’t they go to the private equity market in the first place?), and they had to do so because they were in breach of the covenant of the original loan. DOE was getting ready to call them, although I’m sure the extra-legal Obama administration would have found a way to ignore those laws too.

And none of this addresses the billions in subsidies Musk has received. But remember, it’s not about some hypothetical future, it’s about what he has taken in the past.

RockyRoad
Reply to  Damian
September 28, 2018 7:55 am

Didn’t automobiles start out as electric then moved to gasoline?

Tesla isn’t the future; it is the ancient past!

saveenergy
Reply to  RockyRoad
September 28, 2018 12:40 pm

“Didn’t automobiles start out as electric”

No, it was steam.

Early powered vehicles
• Steam-powered –
Nicolas-Joseph Cugnot is widely credited with building the first full-scale, self-propelled mechanical vehicle or car in about 1769; he created a steam-powered gun carriage.
see replica – https://youtu.be/XsEbeCrPcA8

In 1801, Richard Trevithick built a steam-driven vehicle (Puffing Devil) &
two yrs later the London Steam Carriage – https://www.youtube.com/watch?v=Dx_5hE4aGBQ

Steam-powered bus services were pioneered in England in the 1830s by Walter Hancock Sir Goldsworthy Gurney

• Internal combustion –
the granddaddy of internal combustion vehicles was a ‘de Rivaz ‘ 1807/8 Swiss four-wheel machine that ran on hydrogen and oxygen
https://en.wikipedia.org/wiki/De_Rivaz_engine

1886 three-wheeled Benz Patent Motor Car, model no. 1,

• Electric –
first electric (tricycle )April 19, 1881 – Gustave Trouvé Paris.

1884 the first 4 wheeled production electric car in London; Thomas Parker,

saveenergy
Reply to  RockyRoad
September 28, 2018 12:44 pm

“Didn’t automobiles start out as electric”

No it was steam –

Early powered vehicles
• Steam-powered –
Nicolas-Joseph Cugnot is widely credited with building the first full-scale, self-propelled mechanical vehicle or car in about 1769; he created a steam-powered gun carriage.
see replica – https://youtu.be/XsEbeCrPcA8

In 1801, Richard Trevithick built a steam-driven vehicle (Puffing Devil) &
two yrs later the London Steam Carriage – https://www.youtube.com/watch?v=Dx_5hE4aGBQ

Steam-powered bus services were pioneered in England in the 1830s by Walter Hancock Sir Goldsworthy Gurney

• Internal combustion –
the granddaddy of internal combustion vehicles was a ‘de Rivaz ‘ 1807/8 Swiss four-wheel machine that ran on hydrogen and oxygen
https://en.wikipedia.org/wiki/De_Rivaz_engine

1886 three-wheeled Benz Patent Motor Car, model no. 1,

• Electric –
first electric (tricycle )April 19, 1881 – Gustave Trouvé Paris.

1884 the first 4 wheeled production electric car in London; Thomas Parker,

Richard Bell
Reply to  Damian
September 28, 2018 12:42 pm

Tesla has all but bet the farm that the lithium-ion cell is the cell technology of the future, despite its alarming track record. Because the energy is stored in the electrode as lithium atoms and there is no way to ensure that lithium ions return to where the came from, while recharging, defects happen and defects grow, so lithium-ion cells are as sure to eventually fail as the filaments of quartz-halogen lamps. Poor quality control can allow a new lithium-ion cell to fail while it is being shipped.

Fires from faulty lithium-ion cells nearly moved the FAA to revoke the Boeing 787 Dreamliner type certificate (grounding ALL Boeing 787’s). The Sept. 3, 2010 crash of UPS flight 6 was caused by the spontaneous combustion of lithium-ion cells. South African Airways flight 295 was lost, on Nov. 28, 1987, to a fire that resembled the fire aboard UPS flight 6, and the cargo manifest did include laptop batteries. Faulty lithium-ion cells in e-cigarettes have cost vapers hands and lives. Top Gear’s Richard Hammond went off the road in an electric supercar and the vehicle consumed itself in an unquenchable battery fire, and a Tesla model 3 that was part of a demonstration for EU bureaucrats just erupted in flames. All of this begs the question:

Has a lithium-ion powered electric vehicle undergone crash testing with a real lithium-ion battery in the battery bay, instead of a dummy battery of the correct mass and structural characteristics?

Lithium-ion cell fires are metal fires, which are very difficult to extinguish, because they burn hot enough to dissociate both water and CO2 into oxygen plus the other element. The heat released by the internal discharge of the large energy stored in the cell, contained within the small mass of the cell raises the temperature past the point where oxygen is released from the electrolyte and the electrode will start to burn in the presence of oxygen. While the burning electrodes are hot enough to continue liberating oxygen from the electrolyte, the fire cannot be extinguished, at all.

Electric transportation will probably need to wait for a cell technology that does not store the energy in the electrodes. Vanadium redox batteries store the energy in the electrolytes, which can be stored outside the cell. Even if vanadium redox batteries had the same risk of fire of lithium-ion batteries, it is not a metal fire of so high a temperature that all water does is give the fire more oxygen. The Tesla Semi faces the difficulty of needing a battery bay that keeps out collision damage, while not presenting any hindrance to the gases evolved from a battery fire. How freely the evolved gases can exit the battery bay will determine whether a Tesla Semi battery fire more resembles the magazine fire of the HMS Khartoum (1 dead, 3 injured, out of a crew of 183 and the ship was beached to prevent its sinking) or the HMS Hood (immediately sunk with only 3 survivors).

I do not believe that lithium-ion cells have any place in a structure that allows for brief accelerations as high as 50 g (the most severe collisions that people ever walk away from).

Peter R
Reply to  Richard Bell
September 28, 2018 5:28 pm

Also what do you do with 7,000 Lithium-Ion batteries, from each car, when they become of age?

Coeur de Lion
Reply to  Richard Bell
September 28, 2018 5:33 pm

You recycle them much like the millions of lead-acid batteries currently recycled from automobiles today.

Don K
Reply to  Richard Bell
September 29, 2018 12:20 am

Note that Prius hybrids which have been around for 20 years used NiMH batteries until recently. NiMH is better behaved than Lion in many ways. But it has lower energy density. Toyota has switched to Lion I believe, so maybe modern Lion technology isn’t all that bad. Toyota generally doesn’t screw up their engineering.

t’s not like gasoline and CNG fueled vehicles are immune from combustion.

beng135
Reply to  Richard Bell
September 29, 2018 6:11 am

Richard Bell, nice summary. I’m reminded of the magazine article (Hot Rod or something) of a garage guy that built a rear-wheel-drive electric Camaro using 20 standard lead-acid batteries and a 40 or so HP, 240V DC motor. He was stating in the article, “What’s all this hub-bub about EVs? I can make one out of standard, off-the-shelf items.”

Sara
Reply to  TinyCO2
September 28, 2018 5:12 am

Smart people saw this coming a while back and shorted Tesla’s stock. Fat profits for them. It was always about ‘Look At Me!’ by Elon Musk. If This didn’t work then try That. Slow production on Product (electric car) delivery? Do a sidestep and go to Rockets! Man!!!

At least carney barkers didn’t charge you an arm and a leg to see the show.

D. Anderson
Reply to  Sara
September 28, 2018 8:19 am

It’s always a bad sign when they start blaming speculators for their troubles.

Tesla “under massive attack” from speculators says boss

http://thechargingpoint.azurewebsites.net/news/Tesla-under-massive-attack-from-speculators-says-boss.html

MarkW
Reply to  D. Anderson
September 28, 2018 12:36 pm

“Speculators” can’t attack Tesla, or any other company. All they can do is marginally influence stock prices.

Reply to  Mike Haseler (Scottish Sceptic)
September 28, 2018 1:45 am

California will take a hit for sure when Tesla folds. Will it ripple to the rest of the country?
I would say “no” if we can keep oil at or under $70/bbl. Arounf $80 now and that makes the Saudis worried because that plus a stronger dollar slams the rest of the world on demand and could push a global recession.
And it is high fuel prices that sucks the wind out of the US consumer confidence and buying here at home.
So its up to Permian, Baken, Eagle Ford shale producers as well as Marcellus shale gas producers to keep energy prices low so Eastern steel mills and truckers can keep their costs down.

Drill baby drill.

Don K
Reply to  Joel O’Bryan
September 29, 2018 12:31 am

I’m not sure that petroleum prices are especially relevant to Tesla cars. To hybrids and mainstream electrics like the Nissan Leaf, yes. But Tesla is building electric sports cars. If you can contemplate buying one of the silly things, you probably have more money than sense anyway.

I’m told that they are pretty good for what they are, but I can’t see them as mass market vehicles unless they can deliver them at competetive prices (30K or so) and make a profit. The semi seems more viable if it can deliver the promised performance — which seems to me to be unlikely. I suspect that it competes with CNG powered semis which also pretty much require dedicated fueling facilities. That’s maybe not that big a deal for fleet operators like Walmart who will presumably run them on fixed routes.

Non Nomen
September 28, 2018 12:48 am

Musk taken to Midden.

September 28, 2018 12:49 am

Well, another stupid mistake by Musk…let’s hope he concentrates his efforts on SpaceX instead. At least the various Falcon rocket iterations he’s developed are useful.

Red94ViperRT10
Reply to  Alastair Brickell
September 28, 2018 3:48 am

AIUI, the first generation Falcon, even after he got it to fly without crisping another astronaut, didn’t do what the contract said it was supposed to be able to do. I think what he delivered was worth less than half what he got paid for it. And AFAIK, nearly all the income of Space X is government (taxpayer-funded) money, just like his car company. Well, that and debt.

Don K
Reply to  Red94ViperRT10
September 29, 2018 12:40 am

You’re not wrong. But SpaceX’s competitors in the space launch have a decades long history of overpromising and underdelivering. That’s the way the business works (sadly) and to a great extent, massive overruns are baked into everybody’s planning. I haven’t looked at the details as much as I should, but I think SpaceX is no worse than its competitors.

Dave Fair
Reply to  Alastair Brickell
September 28, 2018 8:25 am

If the SEC prevails, Musk won’t be allowed to be an officer of ANY company.

Roger Knights
Reply to  Dave Fair
September 28, 2018 10:26 am

No, only of any PUBLIC company—one listed on a stock exchange.

tsk tsk
Reply to  Alastair Brickell
September 28, 2018 7:39 pm

I hope not. I’m fairly convinced that the SpaceX team is operating independent of him but letting him wear the big hat and push the big, disconnected buttons on his desk.

September 28, 2018 1:20 am

Musk has made some severe errors of judgements recently. His ‘pedo’ comments were unfair and unpleasant.

A pity now that the model 3 has left BMW, Merc et. al. trailing in the dust

Reply to  John Hardy
September 28, 2018 1:47 am

Lots of quality problems in the new Model 3.
BMW et al. would never ship so many defects.

michael hart
Reply to  Joel O’Bryan
September 28, 2018 3:52 am

That’s the take home message I got from watching owner videos on t’internet. Many of them freely admit they are enthusiasts but still emphasize the poor build quality.
No one builds a volume Toyota-quality car manufacturing business from scratch in a short space of time.

Crispin in Waterloo
Reply to  michael hart
September 28, 2018 7:41 am

Can space-time be shortened?

Just askin’.

MarkW
Reply to  Crispin in Waterloo
September 28, 2018 8:59 am

Yes, if you go fast enough.

Reply to  John Hardy
September 28, 2018 4:15 am

The biggest fiction going is that Tesla “outsold” various gas powered competitors from BMW, Mercedes, etc. Only Tesla fans are dumb enough to swallow that bit of propaganda – the number “sold” was actually the number delivered to customers last month. I doubt that more than a few of those customers actually bought the cars last month – they were on a waiting list which has been around several years and which customers paid $1000 deposit. Tesla never provides any data concerning sales or much of anything else. Tesla’s biggest govt subsidies come from the $7500 Fed tax credit for buyers (now phasing out) and selling ZEV credits provided by CAlifornia and several other states (credits are losing value as other automakers produce electric cars and don’t need to buy any credits). Tesla’s performance against gas powered cars is irrelevant – electric competition is already here and will become an avalanche over the next several years – over 250 electric cars models from all of the world’s automakers
over the next several years. Already reviews of several competitors have punctured the bubble that Tesla has any kind of long term (or even short term) advantage in EV technology.

Tom Abbott
Reply to  kent beuchert
September 28, 2018 4:53 am

If I could find an electric hybrid that I could use to power my house during a power outage, I would buy it.

That would sound like a good value to me. Just plug my house into the automobile when needed. That would work a lot better than a small generator, which is noisy, and requires freqent refueling if the power outage is for an extended period of time.

Latitude
Reply to  Tom Abbott
September 28, 2018 6:58 am

Now that would be a great idea…

…if they can get around that self igniting issue

jorgekafkazar
Reply to  Latitude
September 28, 2018 8:12 pm

Picky, picky, picky.

steve case
Reply to  Tom Abbott
September 28, 2018 7:01 am

And if you do need to refuel you don’t have to lug a trunk full of “Jerry Cans” to the gas station just drive your car there and gas up.

Tom Abbott
Reply to  Matthew W
September 28, 2018 12:34 pm

Thanks for that article, Matthew W.

If I were in the market for a $60,000.00 ice/electric car and I had a choice between one that could be easily hooked up to my house to power it during a power outage or one that could not, then I would buy the one that could, all other things being equal.

Yes, it would be handy to be able to drive to the gas station to fill up the car rather than wrestling with a bunch of gas cans to fuel a generator.

Plus, have you ever had to go for an extended amount of time on a small gasoline generator? It’s not a pleasant experience and it takes a little ability and effort (the oil has to be changed grequently). Starting a car and plugging it in would be a whole lot easier..

Flight Level
Reply to  Tom Abbott
September 28, 2018 7:43 am

Yeah, you’re right. Electric hybrid cars run on hot air.

MarkW
Reply to  Tom Abbott
September 28, 2018 7:44 am

How does the generator in a hybrid compare in power to your average home generator?

rocketscientist
Reply to  Tom Abbott
September 28, 2018 9:01 am

A poor application to a well understood issue.
A far more efficient home generator could be fitted with mufflers and sound deadening surrounds much more inexpensively than a vehicle that could suffice as an after thought. And you could run your generator on CNG without needing to fuel up on gasoline.
I could use my car to heat my house or light it up with head lights, but I don’t for the same reasons as I mentioned.

Ernest Bush
Reply to  rocketscientist
September 28, 2018 5:49 pm

I have operated around large generators that could power several houses, AC included, for extended periods. They were so well sound-proofed you could just tell they were running. Smaller units of such quality are surprisingly cheap for what they do. They are certainly way cheaper than the cost of a hybrid capable of doing the same job. Also, a large standard propane tank would certainly run the generator for days.

jaymam
Reply to  Tom Abbott
September 28, 2018 3:13 pm

I can already run my house for several hours off my rather large car battery and a 1500 watt inverter. For cooking I have a camp stove.
The longest power outage we have had was 3 days, for which I started up the petrol generator several times a day. The inverter is quiet and takes only a few minutes to plug in.

Don K
Reply to  Tom Abbott
September 29, 2018 12:49 am

If you were sufficiently motivated, you could probably rig up a treadmill hooked to a generator that you could drive your car — however powered — onto and use to power your house in an emergency. It’d probably only take you 3 to 5 years of weekends, and cost maybe five times what a used generator would cost.

If you live somewhere where building codes are enforced, you’d probably have no small difficulty getting your wiring accepted.

But it could be done — probably.

Tired Old Nurse
September 28, 2018 1:23 am

Maybe this will get him out of the way at SpaceX. While he deserves credit for building the company his recent behavior is a distraction.

My GF’s teenaged son idolized Musk until he watched the circus act that was the moon launch announcement. Now Christos can’t figure out how Musk could have accomplished what he has.

rocketscientist
Reply to  Tired Old Nurse
September 28, 2018 9:05 am

He didn’t. The talented engineers at Space-X did.
All he brought to the party was a big bucket of $$.

tsk tsk
Reply to  rocketscientist
September 28, 2018 7:41 pm

Bingo.

Roger Knights
September 28, 2018 1:37 am

“tumbled 9.9% to $277 in after-hours trading Thursday on Nasdaq.”

At the end of AH trading (4 hours after the regular close) it was down $33.82 (-11.00%). To follow the ongoing Tesla/Musk drama visit the Seeking Alpha Tesla page at https://seekingalpha.com/symbol/TSLA

Roger Knights
Reply to  Roger Knights
September 28, 2018 1:39 am

PS: In today’s pre-market it is up a tiny bit, to $272, down 10.9% from yesterday’s close.

William Astley
Reply to  Roger Knights
September 28, 2018 9:29 pm

TSLA $264.77 -42.75 (-13.90%)

Tesla closed at Friday at $264. Down 14%.

A high tech car built by a bankrupt company will become worthless almost as quickly as the shares of the bankrupt car manufacturer become worthless.

Where do you go to fix a software problem or a sensor problem for a car that was built by a bankrupt car company?

Where does one got find parts for a bankrupt car manufacturer?

Reality is reality. Tesla shares where and still are dot.com too expensive, for dot.com like reasons with a market cap of $45 billion.

esla is a company that has never made a profit, that has an 11 billion dollar loan coming due.

General Motors ended Friday’s session with a market cap of about $47.5 billion, while Tesla’s was at $45.17 billion, according to Bloomberg data.

(Bloomberg) — The cost of protecting Tesla Inc.’s junk bonds against default reached a fresh high on Friday after the Securities and Exchange Commission sued Chief Executive Elon Musk for fraud and sought to remove him from his job.

The upfront cost of insuring Tesla’s debt for five year rose 1.1 percentage point to 22.6 percentage points at 11:15 a.m. in New York, according to credit-default swaps prices from CMA. The CDS reached the highest since it began trading earlier this year. For every $10 million of bonds protected, an investor would pay $2.26 million upfront. At that level the market is effectively pricing a 47 percent chance of default.

Don K
Reply to  Roger Knights
September 29, 2018 12:57 am

One should note that SeekingAlpha seems to have determined that its purpose in life is to denigrate Tesla. Not that it’s reporting seems inaccurate. Just don’t expect to find any mitigating circumstances in their discussions unless they are pretty overwhelming.

By all means read their stuff, but keep in mind that you may or may not be getting the whole story.

Rujholla
September 28, 2018 1:43 am

Sad but appropriate…Tesla is a glorified battery company, I’ve never thought they had a chance to break into the car market.

knr
September 28, 2018 2:03 am

Its was clear for some ttime that once those whose business was making cars , rather than making ego’s , decided to move into the market , Musk would be in trouble . That the only thing he has ever made money out off , the flame thrower , tells us a great deal about this classic case of ‘hype driving share value ‘ not product .

Paul
September 28, 2018 2:04 am

I saw a tesla this morning on the way to work here in adelaide (sth aust). They look so much like jaguars it’s not funny.

Khwarizmi
September 28, 2018 2:09 am

…analysts have said the company’s roughly $50 billion market value is driven by Wall Street’s appreciation for Mr. Musk’s vision and skill as an innovator…

Billions worth of mere “appreciation” can evaporate overnight…

They grew slowly at first, but eventually raised serious amounts of venture capital, which at one point valued the company at $9 billion. Holmes’ on-paper net worth at one point was in the billions as well. Theranos partnered with drug companies and retailers — including Walgreens — and was for a time the toast of the tech media, with Holmes appearing on numerous magazine covers.

Theranos later attracted a board that consisted of various establishment luminaries, including
former Secretaries of State ► Henry Kissinger and George Shultz,
as well as now ► Secretary of Defense James Mattis.
► Rupert Murdoch and ► the Walton family, founders of Walmart,
and another current cabinet member, ► education secretary Betsy DeVos,
were among the nine-figure investors.
https://appleinsider.com/articles/18/07/06/steve-jobs-theranos-elizabeth-holmes-and-when-the-reality-distortion-field-fails

https://www.google.com/search?&q=Theranos
“People also searched for Tesla Inc.”

Ron Long
September 28, 2018 3:14 am

Maybe for punishment he’ll get the Electric Chair?

H.R.
Reply to  Ron Long
September 28, 2018 9:22 am

Nope. The gas chamber.

Ron Long
Reply to  H.R.
September 28, 2018 9:53 am

H.R., you’re worse than I am. I like it.

drednicolson
Reply to  Ron Long
September 28, 2018 4:51 pm

I vote for the Comfy Chair with extra Soft Pillows.

beng135
Reply to  Ron Long
September 29, 2018 6:32 am

One of these days, Elon. One of these days! Bang! Zoom! Straight to Mars.

MrGrimNasty
September 28, 2018 3:15 am

Tesla no longer promises to provide anything unique.

Mainstream car companies are now producing super-car accelerating electric vehicles like the top range Teslas (which aren’t actually greener than IC fossil fueled cars on full life cycle anyway).

And decent, more modest, electric cars are also widely available from mainstream car companies. All with none of the quality and production problems of Tesla.

Yet all of these electric vehicles are still too expensive and not really in demand from car buyers.

So Tesla is trying to succeed in a relatively small niche market, with a product that has quality and delivery date issues, against established car companies offering similar/better products reliably.

I don’t even agree that his rocket s are brilliant. The main selling point, the supposed re-usability? It’s obvious that the vertical descent to a pad – it’s inherently a crazy risky idea that will never work reliably.

michael hart
Reply to  MrGrimNasty
September 28, 2018 4:13 am

I loved watching the successful rocket descents as much as anybody else. Then I later read that they were going to be abandoned because the extra fuel consumption decreased the maximum possible payload so much that the economics were ruined. It’s almost like a pattern is emerging.

Reply to  michael hart
September 28, 2018 8:51 am

I was just going to say this. The MAIN concern with rocket technology is payload. For every pound of payload you need about 20 pounds of fuel. All the fuel used for vertical landing is essentially payload, and you will need 20x as much fuel just to get the landing fuel up.

MarkW
Reply to  Jeff in Calgary
September 28, 2018 9:02 am

It takes 20 pounds of fuel to get a pound into orbit. The boosters aren’t going into orbit.
Regardless, the fuel needed for landing takes away from payload.

That’s why the shuttle was designed to do unpowered landings.

Ernest Bush
Reply to  Jeff in Calgary
September 28, 2018 6:21 pm

If you can refurbish a booster and put it back on the pad days later, fuel concerns aren’t so great. Launching to orbit over the long term is about saving money and making a profit, as for any business. SpaceX has the cheapest rate in the industry by far. SpaceX has spare boosters they will not re-launch because they are old models.

I’m not a great fan of Musk, but he is a visionary who has a company running ahead of the competition in his effort to put men on the Moon and Mars. Yes, most of the credit for making it happen goes to the well motivated employees. NASA is the biggest user of any company who is successfully launching payloads to orbit. SpaceX is doing more commercial launches to orbit as time goes by.

tsk tsk
Reply to  Jeff in Calgary
September 28, 2018 7:47 pm

Fuel cost is an almost negligible part of the total cost of a launch. Less than $1 million per launch. The cost is all in the hardware and labor, so saving that hardware is a much bigger deal than the small reduction in payload fraction.

Dr. Bob
Reply to  MrGrimNasty
September 28, 2018 7:48 am

In reality, only in California is a Tesla actually emitting less CO2 than a conventional gasoline vehicle. California has GHG emissions of 0.75 lbs CO2 per kW-h whereas states like Colorado have emit 1.368 lbs CO2/kW-h. https://oaspub.epa.gov/powpro/ept_pack.charts
With an EV emitting only 40% less CO2 than a gasoline vehicle in CA, using power that has higher GHG emissions makes the Tesla emit more CO2 than a conventional vehicle. So claiming that these cars are GREEN is pure hype and nothing more. Why are we subsidizing this?

Don K
Reply to  Dr. Bob
September 29, 2018 1:37 am

Greater Los Angeles has a more or less unique air pollution problem — 18 million people in a West facing basin backed by a substantial mountain range with moderate prevailing winds from the West much of the year. That’s 6% of the US population — enough to worry about. They have major air pollution problems and by far the greatest source of the air pollution is vehicle exhaust. What little public transportation existed there pretty much died out in the 1940s and 1950s, Reinstating it would be so difficult that switching much of the transport to electric actually seems a viable alternative.

That doesn’t mean that subsidizing an expensive electric sports car makes much sense.

Don K
Reply to  MrGrimNasty
September 29, 2018 1:08 am

The misbegotten Space Shuttle was reusable also. It set all sorts of records for failure to meet targets and keep performance promises. SpaceX is better than that. Way better. But that’s an extremely low bar.

I think Mush deserves credit for putting together a viable, competetive launch business from scratch. But it doesn’t seem revolutionary. And it’ll be a few years before we know how reliable it is for manned flight. After all the Space shuttle was 98.5% reliable (2 failures in 135 launches) and that was considered to be a disaster.

September 28, 2018 3:28 am

I really don’t care much about Elon Musk or his battery driven contraption.
What does bother me is that when the this thing hits the mud, the name of one of the greatest inventors and engineers from the end of XIX and early XX century it will be in the mind of many linked to the failure of Musk’s enterprise, rather than the inventions that revolutionised the world electric industry bringing incalculable benefits to people all around the globe.
https://en.wikipedia.org/wiki/Nikola_Tesla

Warren
Reply to  vukcevic
September 28, 2018 4:02 am

Amen.

Retired_Engineer_Jim
Reply to  vukcevic
September 28, 2018 2:30 pm

Yes, and why is an inherently DC car named after Tesla?

Ernest Bush
Reply to  Retired_Engineer_Jim
September 28, 2018 6:23 pm

Took me a few seconds to catch that one, lol.

Reply to  Retired_Engineer_Jim
September 29, 2018 12:26 am

Tesla car uses 3-phase modulating inverter drivers, and the Tesla Roadster uses an AC induction motor.
It just shows that more than 100 years later Tesla’s inventions are unsurpassed !

commieBob
September 28, 2018 3:32 am

Going public and issuing stock is tempting. The down side is that you now have thousands of interested parties plus the SEC. The SEC went after Musk. It could just as well have been PO’d investors who got the ball rolling. Both cases have the same result, you can end up in jail.

Conrad Black managed to irk some of his investors. It was they, not the SEC, who got the ball rolling but he ended up in jail anyway. link

michael hart
Reply to  commieBob
September 28, 2018 4:21 am

In the end, it seems like his desire to punish short-sellers (aka “skeptics”) got the better of him. I recall articles describing his gloating tweets. Even the BBC article talking about it acknowledges that his words and actions condemned him to only one outcome. Of course, they were never so honest beforehand.

drednicolson
Reply to  michael hart
September 28, 2018 5:04 pm

Tell the world to watch you dance, and it will be waiting for the slip.

bonbon
September 28, 2018 4:06 am

Now with litigation, what will discovery dig up I wonder?

September 28, 2018 4:21 am

Climate delusion, exploding rockets, spontaneous combustion Teslas, nuke Mars, pot smoking, securities fraud. What’s next? Pedo porn?

comment image

Tom Johnson
September 28, 2018 4:35 am

Tesla Motors had been floating around the same market value as Ford Motor Company. Tesla has been struggling mightily to achieve an annual production rate of 60,000 vehicles per year. Ford sells close to 7 million per year. Tesla has never made a profit, last year Ford’s profit was around $8 billion. There is only one thing that can account for such a major difference: CAFE, Corporate Average Fuel Economy.

Obama era mandates require a CAFE of 54 miles per gallon by the early 2020s. That’s CA as in Corporate Average. These cars are all on the drawing boards today. There is not a car in existence which fulfill the needs of an urban family which comes even close to that. There won’t be any in the early ’20s, either. These mandates also artificially ignore the true “pollution” of electric cars, and give cars like the Tesla a calculated fuel economy of infinity (zero gallons per mile). The only way Tesla can be worth even close to it’s market cap is to merge with a real car company and thus average it’s cars of infinite miles per gallon with cars of honest miles per gallon.

This “advantage” evaporates completely as soon as Trump eliminates the 54 mpg mandate as expected. When that happens, Elon Musk becomes another Preston Tucker.

Stewart Pid
Reply to  Tom Johnson
September 28, 2018 7:47 am

Tom: Tesla is right around 200,000 cars a year. Check it out if you don’t believe me and look for current data.
Re your claim “There is not a car in existence which fulfill the needs of an urban family which comes even close to that” Check out the new 2018 Honda hybrids – both the Accord and Civic and especially the Clarity plug in hybrid. All are over 50 mpg and on sale now.

Ben of Houston
Reply to  Stewart Pid
September 28, 2018 9:28 am

The claimed mpg is quite different from actual mpg on hybrids. The only way to get that number is through accounting tricks (you get +5 mpg for certain A/C refrigerants) and bad assumptions that make a joke out of the whole thing.

And Tesla did reach that valuation when it was only 1% of either GE or Ford. That’s probably where Tom got the number. The conclusion doesn’t change at 4% production. It’s vastly overvalued.

Michael Jankowski
Reply to  Ben of Houston
September 28, 2018 10:19 am

I’ve owned a Prius for over 4 yrs and have no problem coming close to, meeting, or exceeding the advertised mpg ratings if I don’t drive like an absolute maniac (which I do from time-to-time).

Mark Gilbert
Reply to  Michael Jankowski
September 28, 2018 12:19 pm

Maniac in a Prius? Is that like Pedo in an old folks home?

Stewart Pid
Reply to  Ben of Houston
September 28, 2018 10:56 am

Ben …. my 2008 Camry hybrid would routinely get between 48 – 52 mpg on the highway, although I admit the 52 was a 300 km trip shortly after we got the car and I was trying to get the max mpg with the cruise set at the speed limit.
The only time the hybrid takes a serious mileage hit is when our temperatures drop to the -30 C range and the gas motor runs all the time to supply heat for the cabin.
I have no idea what u are talking about re accounting tricks.
I sold the hybrid to my daughter when she graduated and it continues to run trouble free in it’s 11th year and still gets the same mileage as new. Both the hybrid battery and the lead acid battery are the original ones.

Re the Honda I found this which are real world numbers …. what the tester got while driving the Honda – ‘ “In city and suburban driving, I saw as much as 55 mpg, and had no trouble keeping the Honda above 50 mpg. My highway mileage hovered around 47 mpg, two better than the EPA rating. And I ended up with 49 mpg overall”.
From here http://www.thedrive.com/new-cars/23078/2019-honda-insight-test-drive-review-with-a-hybrid-like-this-why-would-anyone-buy-a-prius

MarkW
Reply to  Stewart Pid
September 28, 2018 12:40 pm

My Fiat 500 routinely gets better than 50mph just driving around town.

Coeur de Lion
Reply to  Stewart Pid
September 28, 2018 12:52 pm

Your town has 50 mph speed limits on it’s roads?

George
Reply to  Stewart Pid
September 28, 2018 7:00 pm

Heck my Dodge Durango gets 29 mpg on the highway and has a range of 700 miles.

Michael Jankowski
Reply to  Stewart Pid
September 28, 2018 10:13 am

Not to mention the Prius…

Steve O
September 28, 2018 4:48 am

This is actually good news for Tesla.

He was clearly not the right guy to run a mass-production car company but the Board knew that many of their shareholders viewed Musk as some sort of magical wizard, and the stock price would see a downward adjustment if they even suggested replacing him.

Now the Board can proceed with what they need to do and Musk himself gets the blame.

Oatley
September 28, 2018 5:02 am

Imagine being a board member having this mess dumped in your lap. Talk about trying to put lipstick on a pig!

Tom in Florida
September 28, 2018 5:35 am

Modified “pump and dump” scheme.

Bitter&twisted
September 28, 2018 5:42 am

I have been referring to “Enron” Musk as a con-artist for at least 3 years.
Finally the Authorities have cottoned on.
But only because of Enron’s own stupidity.

hunter
September 28, 2018 5:46 am

Few visionary founders are able to transition to running the actual long term company successfully.
Musk, and his egregious and bizarre intrusion with the Thailand cave rescue. His recreational drug use. His irresponsible (criminal?) tweeting and inability to actually build the cars. Clearly Musk is not one of the few who can start and run a visionary company.

simple-touriste
Reply to  hunter
September 28, 2018 8:24 am

“egregious and bizarre intrusion”

Or future crazy defense in a criminal trial with defrauded customers? It isn’t my fault, I was disturbed, smoking weed, in overdrive…

DonM
Reply to  simple-touriste
September 28, 2018 4:41 pm

“I was disturbed, smoking weed, in overdrive…”

… hence the generous SEC proposed settlement.

Now it will be necessary that he will surround hisself with those that tell him what he wants to hear. As such he can also be taken advantage of (lawyers fighting a losing fight are expensive … but the lawyers don’t mind)

Trebla
September 28, 2018 5:51 am

What is the barrier to entra in making an electric car? The Chevrolet Bolt is the answer to that question, and so is the Leaf, the i3 etc.

Rob
September 28, 2018 6:47 am

The guy has lost it big time. He has been quoted as saying he picked $420 because he thought it would impress his girlfriend who was into pot!

The question I have not seen answered is whether he sold any shares after the announcement and therefore made money out of the tweets. There have been people sent to jail for deliberately spreading fake information for profit (not by the SEC – they don’t have that power). As an officer of the company, it probably doesn’t affect the SEC charges whether he made money or not, but it would affect other possible charges and leave him open to suit by shareholders who lost money.

Rob
Reply to  Rob
September 28, 2018 6:59 am

Apparently the DOJ are also investigating:

https://www.bloomberg.com/news/articles/2018-09-18/tesla-is-said-to-face-u-s-criminal-probe-over-musk-statements?srnd=premium

The DOJ would be able to bring criminal charges if they found Musk had defrauded anyone, but the story says that they are just information gathering at the moment.

Derg
September 28, 2018 7:01 am

Oh what a tangled web we weave when first we practice to deceive.

Gary Pearse
September 28, 2018 7:38 am

I know someone with two of his cars, one~ 5 yrs old and they work very well. He drives a lot, and there were free charging stations all over the place and at hotels etc. Did Musk ‘unlearn’ how to make them?

simple-touriste
Reply to  Gary Pearse
September 28, 2018 8:34 am

“it’s a good Tesla car”

Yes but what was the price tag?

Michael Jankowski
Reply to  Gary Pearse
September 28, 2018 3:29 pm

Those two may “work” well (although that is quite a small sample size). My friend’s is regularly suffering from annoyances such as breaking door handles, rearview mirror falling-off, etc. Hasn’t broken-down by the side of the road…yet. But plenty of things that should not “fall apart” on a 2-yr old car.

MarkW
September 28, 2018 7:39 am

Musk seems to be coming apart at the seams.

Cluebat
September 28, 2018 7:58 am

He should have sold this company years ago. Success was predicated upon high prices for fossil fuels. The only chance for this type of product to succeed is a major increase in battery power density and low electricity prices. I do not begrudge any manufacturer taking advantage of subsidies which are available to all. If we want to cut subsidies, we should start with agriculture, and not focus on some new tech which was subsidized for a fixed period of time in order to help with the success of the new technology. Musk did not receive anything that others were also not entitled to. Same goes with SpaceX. If they did not get these contracts, it would be other more entrenched cronies.
Looks bad for Musk right now, and the failure of his automobile venture will have a knock-on effect for orbital services. It is in our national interest for that business to succeed. If Tesla goes belly up, what does that mean for the most successful private space company ever? Sell it to the Chinese? I don’t think so. It would need to be a trusted American company with very deep pockets. Amazon? Google? I know that many Americans trust those outfits, but I do not.
Better to take care of the crony who can be most trusted, no matter how eccentric he may be.

Robert W Turner
September 28, 2018 8:12 am

Was this tweet made right after toking up on the Joe Rogan Podcast?

Lokki
September 28, 2018 8:24 am

I have to say that Musk has done an amazing job of making a dream into a reality. He’s sold hundreds of thousands of cars – something that almost no one thought possible in today’s global marketplace. I have to admire that.

However, the Tesla cars are more of a fad and a fashion statement than the future of all vehicles. I think that Mini might be a reasonable comparable. They started out very strong, and they were able to make several variations, but ultimately the steam is slowly going out of the brand. As they become common they lose their uniqueness and are viewed as ‘just another car’.

When the fashion changes and the fad cools, sales will drop for Tesla. How soon and how far? Those are the questions. Certainly much of Tesla’s appeal is wrapped up with Elon’s image. If he damages his image, he damages the company. As for the fashion, there are going to a lot of options by other makers in the marketplace in the next few years along with a couple of hundred thousand Telsas. I still see more Model S than Model 3’s (And Model X are very rare) but I probably see two or three Model 3’s a week now.

When “anyone can have one” the status of owning a Tesla fades. Additionally, right now, the conversation goes, “Oh, you bought a Tesla! How cool! Isn’t Elon amazing?” If that changes to, “Oh, you bought a Tesla – my cousin has one just like it. It’s a pretty good car but don’t you think Elon’s an assho a jerk?” The thrill will wither and sales will drop off

simple-touriste
Reply to  Lokki
September 28, 2018 10:34 am

Like Apple Macintosh, who was believed by millions of fan to be superior when it was extremely inferior to even the very defective Win95!

The level of autism was on display when during a Apple event, the MacOS 7 file manager was compared to… MS-DOS’s “dir” command.

September 28, 2018 8:28 am

Are his batteries about to get leapfrogged by the billionaire owner of the LA Times?

https://www.cnbc.com/2018/09/27/cheaper-battery-is-unveiled-as-a-step-to-a-carbon-free-grid.html?__source=sharebar

Ernest Bush
Reply to  Canman
September 28, 2018 6:48 pm

Not at $100 per kilowatt hour for storage. This storage is still too expensive to put on the nation’s power grids. Also, there is still the pie-in-the-sky dream of cheap renewable energy in this article. All I read in this article is another excuse for the “affordable renewable energy” lie that manufacturers of wind turbines and solar schemes keeps putting out there. I’m interested in the blade lifetime of the growing number of turbines on the desert at Ocotillo, CA. They are being blasted by sharp micro-grit sand that is always in the air in that region.

September 28, 2018 9:23 am

“Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups.” – LA Times

MarkW
Reply to  Jon O Beard
September 28, 2018 12:45 pm

If even the LA Times is bailing on Musk, he doesn’t have a lot of running room left.

Windsong
September 28, 2018 9:44 am

Awhile back for some forgotten reason, I signed up for email alerts on TSLA from Seeking Alpha. Do not do that unless you have loads of free time to read the fire hose stream of articles pouring into your inbox. The problem for TSLA fans is that the majority of the analysts covering Tesla/SolarCity are reporting very serious production, supply chain, logistic (delivery/service), quality, competitive, financial and regulatory issues for the company. One analyst has an article stating they are functionally bankrupt. Upcoming 3rd Quarter results will be interesting to read.

Roger Knights
Reply to  Windsong
September 28, 2018 10:43 am

“I signed up for email alerts on TSLA from Seeking Alpha. Do not do that unless you have loads of free time to read the fire hose stream of articles pouring into your inbox.”

Funny! Here’s where to sign up: https://seekingalpha.com/symbol/TSLA

Windsong
Reply to  Roger Knights
September 28, 2018 11:39 am

Thanks, Roger. I actually had not opened my email when I posted the original comment. Oh, man! Must have been close to a dozen articles from the last 24 hours. (Note: my Yahoo email account where I get the SA stuff sends most of them to the spam folder.) Not a good day for TSLA; some big players, like Citi, recommending “Sell.” As of now, the stock is down over 14% today.

Jeff Labute
September 28, 2018 11:05 am

Surely there are electric vehicles in the future and I hate to see an American company fail. I’d wouldn’t like to see my children driving Chinese electric vehicles. At the same time, let free market reign and when better battery tech comes along, and vehicles can be made with fewer moving parts and sensors, and maybe cheaper than gas vehicles, then good for them. I’ll be too old to drive before that happens 😉

Peta of Newark
September 28, 2018 11:20 am

So Leon cracks a joke, about and while patently under the influence of Mary Jane.

And a legion of humourless, selfish & greedy money grubbers take him at his word.
They subsequently ‘get’ the joke but meanwhile have lost money.

And its everybody else’s fault but theirs.

Boys & girls, you ever heard the adage: “Don’t gamble if you can’t afford to lose”?

Wake up, get a life, get a sense of humour. Be a ‘good loser’
Apart from slowing the reckless gambling, may also stop your wife putting on those walking boots – think of the money you’ll save on lawyer’s fees and alimony.

Jeff Labute
Reply to  Peta of Newark
September 28, 2018 11:49 am

Elon Musk isn’t a greedy money grabber? Of course, he did tweet he was taking the company private and buying up stock for $420. Good opportunity for anyone to make $$$ if it were true. This caused TSLA stock to go up by ALOT… only to discover it was a lie. Short sellers lost billions trusting what Elon tweeted. Not allowed to influence the market in such ways. Time for this child to get a spanking. $263 at time of posting.

Michael Jankowski
Reply to  Peta of Newark
September 28, 2018 3:52 pm

It’s hard to tell if that was a sarcastic effort at being funny or if you just really meet the standards of both PETA and Newark.

The Leon (errr, Elon) tweet was one month before he smoked pot on Joe Rogan’s podcast. And the tweet was not a joke about Mary Jane. He had another tweet within a week that implied a private buyout was in the works…but it was actually a firm considering an investment, not acting as a broker.

On the podcast in question, Rogan asked if Elon had ever smoked, and Rogan said, “I don’t think so.” He caved like a 7th grader under peer pressure, took what wouldn’t amount to a puff in any dictionary, and shrugged his shoulders like he was too cool for school because that minute toke didn’t affect him in that first millisecond. He’s no pot smoker.

John Tillman
September 28, 2018 11:46 am

TSLA is down about 15% at the moment, but still above its 52-week high.

Shorts are getting their revenge for his taking private stunt.

The SEC case is strong.

John Tillman
Reply to  John Tillman
September 28, 2018 11:46 am

I meant low, of course. Miss the edit function.

Brian Johnston
September 28, 2018 4:59 pm

Elon Musk sold a massive battery which was installed in South Australia. The govt. at the time headed by Jay Weatherill were Green Whackos. It is alleged to be able to supply electricity to a large number of houses for four hours. I believe the houses were never disconnected from the grid to prove the battery works. It was reported that the owner of the battery earned something like $800m in 48 hours when electricity soared to $14,000mw. It would appear to me something is terribly wrong. I suggest fraud and that an investigation should be held.

Brian Johnston
Reply to  Brian Johnston
September 29, 2018 12:01 am

The last article by Brian Johnston should read $800 thousand in 48 hours. The battery allegedly cost $300m

Don K
Reply to  Brian Johnston
September 29, 2018 1:59 am

I’ve never found a good technical explanation of the Jamestown battery. It’s clearly too small (100MwH) to handle a major power failure. What I THINK it does is buffer the burstiness of wind power, and if that’s the case, it’s a good thing and every grid with substantial wind contribution should probably have one or more of them — at a cost of $90M (AUD?) each.

As for South Australia’s electricity pricing scheme. Some things are too demented to waste time trying to figure out. Best to simply ignore the numbers I think. I’m pretty sure they are meaningless as long as one does not have the misfortune to be in South Australia and paying for electricity.

Jaakko Kateenkorva
September 29, 2018 12:29 am

Shareholders can invest in whatever they want, including the faith of man-made apocalypse by 0.01%, 0.01 °C, 1 millimetre etc. I’m more concerned about the taxpayers’ funds being defrauded.

Brian Johnston
September 29, 2018 2:53 am

Don K. I believe the battery is a con and useless. Stop These Things – not a credible group – claim the battery will last 4 minutes. I have it on good authority the battery won’t last 4 seconds. Won’t work. It will not have the capacity/grunt/oomph to supply real energy into the grid. I just have to wonder if Musk is a con man. If only they would test the battery.

William Astley
September 29, 2018 12:14 pm

This sounds like a tragedy about to happen.

This sounds like a dead company, not a dying company.

An observation to support that concern is it is a fact, to ensure a $10 million loan to Tesla (to protect against the risk of Tesla going bankrupt) as of Thursday this week, costs $2.6 million.

The above means Tesla will need to pay more than credit card interest say 22 percentage to service their debt. Tesla needs loans to purchase parts, pay employees, and so on.

With super high debt costs it sounds like it will be impossible for Tesla to be profitable.

Tesla has 11 billion dollars in upcoming debt to service.

Tesla is a one product, bet the farm type company with astronomical large liabilities if Tesla were to fails.

Tesla series 3 cars look like airplanes and like airplanes are not safe to run\operate\turn on without the original manufacturing company fixing normal bugs – software, connections, sensors, smart modules, and so on.

It is absolutely normal to have costly bugs to fix in the first generation of any product.

The first generation of bugs are fixed by an in house engineering team and the fixes are sent to the field maintenance staff how fix the cars,

The costs to find and fix bugs are absorbed by future increasing sales.

Particularly in this case as the new model was rushed and 20 percent of the staff where laid off to save costs, it is seems very possible that there will be bugs.

If Tesla goes bankrupt all of the original engineering staff and software staff will leave.

Normally, customer issues are fed back to the engineering staff and resolved.

If Tesla goes bankrupt there will be no one who understands how the car was designed and fix the problems.

In the best case the Tesla cars which have zero company engineering support, will fail safe.

Just stop operating which will be a sever issue to customers but no risk to the general public.

Based other manufacturers experience some failures will likely cause damage.

If Tesla cars cause damage due to unresolved bugs, insurance rates will rise and likely you will not be allowed to operate/turn on the complex machine.

A Tesla car that can be turned on is just a pretty box.

https://www.bloomberg.com/news/articles/2018-09-28/tesla-default-insurance-jumps-to-new-high-after-sec-sues-musk

The upfront cost of insuring Tesla’s debt for five year rose 1.1 percentage point to 22.6 percentage points at 11:15 a.m. in New York, according to credit-default swaps prices from CMA. The CDS reached the highest since it began trading earlier this year.

For every $10 million of bonds protected, an investor would pay $2.26 million upfront.

At that level the market is effectively pricing a 47 percent chance of default.

simple-touriste
Reply to  William Astley
September 29, 2018 6:48 pm

“It is absolutely normal to have costly bugs to fix in the first generation of any product.”

Not when you sell essentially a drone on wheels.

Deliver garbage and fix later (or never) was bad enough for personal computers.

Edward Giugliano
September 29, 2018 1:13 pm

CNBC reported that if Tesla is under SEC investigation, it cannot access the capital markets. They have a huge loan repayment due early next year. They are in a lot of trouble unless Musk can settle this quickly.

simple-touriste
Reply to  Edward Giugliano
September 29, 2018 6:45 pm

What do you mean? An investigation (that could drag on potentially forever) could freeze the capital? That does NOT sound right. Something seems rotten in America (the land of the bureaucrats, kingdom of the never accountable).

simple-touriste
September 29, 2018 4:39 pm

The Securities and Exchange Commission has settled securities fraud charges with Tesla CEO Elon Musk, who will remain at the head of the company, while stepping down as chairman of the electric-car maker, according to a news release from the SEC.

Within 45 days, an independent chairman will replace Musk, who will be ineligible for reelection for the next three years. Tesla will also be required to appoint two new independent directors to its board, in addition to putting into place controls to oversee Musk’s communication. The settlement is still subject to court approval.

Musk and Tesla will also be required to pay $20 million in penalties each.

https://www.foxbusiness.com/markets/teslas-elon-musk-sec-settle-fraud-charges

%d bloggers like this: