Posted on 08/14/2018 8:51:24 PM PDT by logi_cal869
Full title: Pressure mounts on Tesla as it gets hit with a third securities fraud lawsuit in wake of Elon Musk's 'funding secured' tweet
Tesla is facing another lawsuit accusing CEO Elon Musk of manipulating the company's stock price. The suit follows two lawsuits filed against the company last week by investors alleging securities fraud.
A complaint filed on Monday in US District Court in California alleges that some investors purchased Tesla stock "at artificially inflated prices and suffered significant losses and damages once the truth emerged" that Musk had not secured the funding necessary to convert Tesla into a private company for $420 per share, as he said on August 7.
"Am considering taking Tesla private at $420. Funding secured," Musk said via Twitter.
"Investor support is confirmed. Only reason why this is not certain is that it's contingent on a shareholder vote," he later said.
Tesla's share price surged after Musk's first tweet, rising by as much as 12%, to over $381, before settling at $379.57 when trading closed on August 7. But by the end of trading on August 9, it had fallen to $352.45 as reports emerged that the Securities and Exchange Commission made an inquiry into Tesla about whether one of Musk's tweets regarding the possibility of taking the company private was truthful.
According to the lawsuit, "Musk's tweets were an ill-conceived attempt to manipulate the stock price of Tesla upward in order to burn investors who had sold Tesla stock short," and, "had the desired effect of creating a massive one-day increase in the price of Tesla stock and causing short sellers large losses."
(Excerpt) Read more at businessinsider.com ...
When Fakebook lied about number of honest actual accounts as they approached their IPO, I must have missed that securities fraud lawsuit.
At this point, one has to assume that any federal prosecution is politically motivated. Like in the old USSR.
“A complaint filed on Monday in US District Court in California alleges that some investors purchased Tesla stock “at artificially inflated prices and suffered significant losses and damages once the truth emerged” that Musk had not secured the funding necessary to convert Tesla into a private company for $420 per share, as he said on August 7.”
judge should throw the lawsuit out based on the fact that everyone knows that Musk constantly shoots his mouth off about everything and that no one in his (or her) right mind takes what he says seriously ...
When Fakebook lied about number of honest actual accounts as they approached their IPO, I must have missed that securities fraud lawsuit.
There simply is no funding available to take Tesla private. What fool would put up the $60-80 billion necessary for a private $420 stock buyout just to become Elon Musk’s powerless junior partner in a company that heretofore has squandered huge amounts of capital and continues to lose money. Dreams are not reality. Current investors are delusional if they really believe they will shortly receive $420/share. Tesla is far more likely to file for Federal bankruptcy protection and the share price will go to 0, seconds after the filing.
Excerpts from Musk’s letter:
Why did I say “funding secured”?
Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private. They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil. They then held several additional meetings with me over the next year to reiterate this interest and to try to move forward with a going private transaction. Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction.
Recently, after the Saudi fund bought almost 5% of Tesla stock through the public markets, they reached out to ask for another meeting. That meeting took place on July 31st. During the meeting, the Managing Director of the fund expressed regret that I had not moved forward previously on a going private transaction with them, and he strongly expressed his support for funding a going private transaction for Tesla at this time. I understood from him that no other decision makers were needed and that they were eager to proceed.
I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to “funding secured” in the August 7th announcement.
Following the August 7th announcement, I have continued to communicate with the Managing Director of the Saudi fund. He has expressed support for proceeding subject to financial and other due diligence and their internal review process for obtaining approvals. He has also asked for additional details on how the company would be taken private, including any required percentages and any regulatory requirements.
Another critical point to emphasize is that before anyone is asked to decide on going private, full details of the plan will be provided, including the proposed nature and source of the funding to be used. However, it would be premature to do so now. I continue to have discussions with the Saudi fund, and I also am having discussions with a number of other investors, which is something that I always planned to do since I would like for Tesla to continue to have a broad investor base. It is appropriate to complete those discussions before presenting a detailed proposal to an independent board committee.
It is also worth clarifying that most of the capital required for going private would be funded by equity rather than debt, meaning that this would not be like a standard leveraged buyout structure commonly used when companies are taken private. I do not think it would be wise to burden Tesla with significantly increased debt.
Therefore, reports that more than $70B would be needed to take Tesla private dramatically overstate the actual capital raise needed. The $420 buyout price would only be used for Tesla shareholders who do not remain with our company if it is private. My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla.
https://www.tesla.com/en_GB/blog/update-taking-tesla-private?redirect=no
“Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote,” he later said.
...
Musk owns 20% and the Saudi fund owns 5%, so that’s 25% in favor for starters.
Ping.
How about all those tax credits Odumba gave them?? Or living off the tax payer’s teat with the space travel development?
“If investors want to throw away their money on a serial prevaricator, that’s their business and I will happily take the other side of the trade and the profits bound to come with it. But the SEC is supposed to police securities fraud and Mr. Musk is laughing in its face by producing one lie after another with impunity. If he were a coal producer or a member of a politically unprotected class rather than a purveyor of green cars for rich people, the SEC would be investigating him for his incessant market manipulation. This is another example of the collapse of the rule of law in America and it is going to cost investors tens of billions of dollars. Short sellers again are performing a public service by calling attention to this travesty of a company and failure of the regulators to police a serious abuse of the system.”
Actually, take 2. I expect nothing to come of it, but the comparison to VW under Hitler is interesting.
The seem to
Own many large buildings on 880
Musk removed any dobut this being a stunt when he announced the buyback price of $420 (4/20, get it ?) a share ...
They lied, knowingly, and defrauded people.
I hope Musk has been keeping his nose clean - despite the fact that he relies too much on government subsidies, I admire his willingness to swing for the fences. While the rest of Silicon Valley sits around these days designing social media sites to intrude on your privacy and get you to provide them with free content, Musk comes up with OTA software updates for cars, pushes hard for self-driving technology, and builds powerful booster rockets. We need more tech leaders with his ambition - he might be a nut with a monstrous ego, but that describes more than a few of the men who have driven innovation in the last 100 years.
Tesla gets a subsidy for each vehicle out the factory door. Which explains fields of undeliverable teslas.
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