1/ In today's $TSLAQ legal lesson, I will explain why shorts should not worry that Elon Musk has not yet been nailed by the SEC or prosecutors yet, even though his 420 tweets weren't blatantly illegal. RT.
2/ It takes time to investigate a matter involving a lot of people, companies and documents. Regulators review one set of documents, and they reveal new factual issues, and new witnesses. Interview those witnesses, and they reveal reveal new witnesses and docs to seek.
3/ Requesting and reviewing documents, and speaking to witnesses each take time. The recipient of a document request gets at least a couple of weeks, often more, to track down the documents, have their counsel review them, and produce them.
4/ Each new witness is given the opportunity to find and prepare with their own legal counsel, and then there are the invetable scheduling conflicts that need to be navigated when scheduling interviews.
5/ If you are the SEC or a prosecutor, and you are going after a popular billionaire who can afford the very best lawyers, and could fight until the end, you want your evidence to be overwhelming. You want a settlement and a guilty plea, not a trial.
6/ The fact that the SEC investigation is taking time, and is "wide ranging" (according to NYT), and that prosecutors in the US Attorneys office are now conducting a criminal investigation, are very bad news for Musk. The US Attorneys only get involved in bad and big cases.
7/ These investigations appear to be getting worse for Musk, not better. Put yourself in the SEC's shoes or the prosecutor's shoes. They want to dig up lots of great evidence and dirt. Bosses at the top are asking for air tight cases, and quick and dirty won't suffice.
9/ In my view, the best (and pretty unrealistic) outcome for Musk would be a quick and narrow settlement with the SEC that puts this matter behind him for a sizable fine. Counter-intuitively, quick regulatory action would thus be good news for Musk, not bad.
10/ As this drags on for a bit, it is going to become more and more difficult for Musk to stay in his job and for the board to allow him to do so. For now, they can hide behind "we are cooperating" with the investigations, and we didn't know how they would turn out.
11/ As smoking gun after smoking gun surfaces, and as bad news leaks repeatedly, the stench will become so bad, that the board will be unable to keep their heads in the sand. Musk will resign or take indefinite leave. Be patient $TSLAQ. The reaper is coming. <end of thread>
