THREAD: Guys, several things that must be considered re: this SEC action on $TSLA. In my opinion, equity should be heading much lower and this pushes company to brink of discussing bankruptcy. Just think about these few things.
2/ The company had a chance to settle and they said no. Forget about speculating as to why they may have said no (something hidden under the rug?) but think about how this changes the demeanor/attitude of SEC/DOJ. Tesla has publicly called them out now. Who will be made a fool?
3/ SEC has already said we're willing to go after Musk publicly. So what steps would they make to ensure they are not publicly made fools out of now that everyone in the world knows Musk told them to take their settlement and shove it.
4/ The SEC press release yesterday said their investigation is "continuing". The exact words were "The SEC’s investigation, which is continuing, was conducted by..." - this means those celebrating that Tesla wasn't named may not have to wait much longer.
5/ It would be nuts to think SEC would go after the Tweet but then decide to ignore other obvious low hanging fruit like the SCTY acquisition, Model 3 production numbers, etc. These problems just more complex and I believe there is ANOTHER investigation ongoing still.
6/ The SEC just needs time to sort through the rest of that shit. Now back to the BOD sticking by Elon. They are either extremely incompetent or they are hiding something. Further, the SEC complaint yesterday, to me, also implicates the CFO, who went along.
7/ This action will undoubtedly affect how/if the company can raise capital. It will also likely put suppliers on COD-style terms. EVERYONE is going to be worried they can't get their money from company. And I'd bet some fanboys/customers also are siphoned off b/c of this.
8/ Lest we forget the DOJ is also hard at work here. DOJ is the body would could theoretically send Elon to jail if they wanted to try. What happens if Musk leaves, voluntarily or as part of settlement/other? The Musk call option disappears from the company. (cont'd)
9/ With the Musk call option gone, what do you have holding up a company with a $50B valuation? Brand equity? You have then $10B in debt with poorly made cars and a visionary who has pissed off regulators. Co. may post "good" Q3 but you must consider they have used all resources.
10/ Further, none of the numbers that come out of this company are trusted by me. The corporate governance is a WRECK, as shown in the SEC complaint. How do regulators not oust the Board? Will we really see no resignations?
11/ Risk has increased significantly and if the Board is not at least starting to consider the benefits of a Cha. 11 for TSLA's creditors, they are not upholding their fiduciary duty in my opinion. The Q3 numbers may be the last "bounce" this company ever sees IMO.
12/ Consider the fact the last time the equity was at 250 nothing was different operationally and the CEO had not been sued by the SEC, the equity here at 270 is still far too high IMO. Not investment advice, just my opinion.
13/ Legal costs alone will skyrocket. The SEC's complaint helps validate tons of outstanding lawsuits. More employees will likely leave. Morale may get crushed. What's the attitude at Fremont today? "We're going to fight the SEC?" - that works for a little, but not long.
14/ By acting again, DOJ/SEC can stop the next "solar roof tile" or "factory gated" duping of shareholders before it happens. Elon is unfit to be CEO and will be ousted at a minimum. Oh, and we still don't have a $35K Model 3. YMMV, good luck to you all, have good weekend.
