1/ with departure of its 5th head of autopilot in the last few years, its worth revisiting just how big a FRAUD was committed, and for some reason allowed, when $tsla raised $2.7 billion in registered offerings on promises of robotaxis. @HesterPeirce@SEC_Enforcement
2/ In a broadly disseminated call on the eve of the offering in May 2019, Elon promised imminent functioning robotaxis, $250k appreciating asset cars and a $tsla market value of $500 billion in a few years driven solely by autonomous vehicle technology.
3/ as the offering was beginning to trade, Elon doubles down and claims through an official channel that cross country autonomous driving is coming in 2019. NONE of these MATERIAL STATEMENTS were in the offering documents.
1/ I do my best to provide accurate and informed opinion on $tsla. Sometimes I’m mistaken but I don’t delete old tweets to hide that. For those that are interested, what follows is my current thinking on their ability to raise capital. Happy to answer sincere questions.
2/ Well Known Seasoned Issuers are required to test their eligibility annually with the filing of their 10k. The principal benefit is the ability to go immediately effective on certain registration statements under an existing shelf - precluding an SEC review. $tsla
3/ $tsla claimed to remain eligible in their 2018 10k in February. This was notable because of Musk’s censure under 10b-5 anti-fraud provisions which necessitated a Reg D waiver to prevent exemption disqualification under Dodd Frank “bad actor” rules. Waiver was received in Oct
1/ Seeing some interesting and wrong takes on the MXWL deal delays. I will try to clear up some confusion. The deal was structured as a two-step (w/ a merger sub) exchange tender offer under Delaware law that allows for only majority shares tendered to obtain control. $tsla
2/ As such and per the merger, it has only 2 meaningful deal conditions. A majority of shares tendered and a means by which to register the shares given in consideration... effectiveness of an S-4. It is a very simplified structure available only when both are public co’s. $tsla
3/ used mostly in lightly regulated industries not subject to prolonged regulatory body reviews that would negate its appeal. SEC Aja’s publicly stated its commitment to complete s-4 reviews quickly in such structures to fit the tight time frame constraints of tender offers $tsla
1/ Chicago Westmont $tsla update. More cars than I have ever seen here before. Approximately 400 new cars present without significant movement in the last 7 days. Utilizing 2 overflow lots on adjacent properties.
2/ $tsla inventory. The level of activity compared to September is extremely low. Both at the “dealership” and offsite storage. A large diesel generator is a new addition in the last week. Visible trade-ins are less than 15 total among both sites.
3/ the $tsla inside storage / delivery prep/ rework has numerous cars that have not moved in 10 days. Compare side by side one week ago and now. Not much changing. They are lined up late at night to bring more in. And there isn’t much room.
1/ We have now entered the stage when $tsla cars sold are experiencing expired tags in large numbers. This is the stuff of 3rd rate buy here/ pay here used car dealers and is often a symptom of the oldest and most common form of distressed auto dealer bank fraud.
2/ $tsla utilizes an asset based credit line to finance working capital with significant collateral provided by new car inventory. When collateral is sold, the line is to be repaid by the amount of the collateral sold. Is $tsla “selling out of trust” by not clearing the line?
3/ Failing to file title and transfer the collected sales tax can result in expired tags & $tsla hoarding cash that is not theirs. This is potentially felony level bank fraud and also consumer fraud that subjects customers to citations and can lead to lapsed insurance as well.
1/ Some additional thoughts to share regarding $tsla: I) without a 405 waiver, $tsla is no longer a wksi and can’t go immediately effective. II) there are no “bad actor” disqualifications inherent to S1 or S3 eligibility. III)thus it is possible $tsla remains S3 eligible despite
2/ several missed 8K filings over the last couple of months...could be argued these were FD in nature & thus no impact on eligibility. IV) Assume $tsla retains eligibility. Any potential offering would still be subject to SEC review before going effective. 10 days to 4 months
3/ process depending on what the SEC wants to see in disclosures for $tsla. V) what will be necessary? I view these things as necessary: complete dissection of model 3 reservations (a bears dream) and a discussion of all current regulatory investigations. Massive other hurdles
1/ in an 8k today, $tsla again seeks to mislead the market into believing they can raise equity. $tsla is an “ineligible issuer” by terms of law with Musk’s status as a “covered person” and his sanction under anti-fraud provisions of securities laws.
2/ this disqualification extends to all manner of public and even private offerings (equity or debt) under Reg D per terms of Dodd Frank. Who or what is a “covered person” you might ask? Why Elon Musk is. Does Musk’s settlement constitute a disqualifying event? Yup
3/ Musk’s intention to purchase will be unregistered and legended shares that do not qualify for any exemptions under securities laws. They are nontransferable. And thus bear no weight on any judgement as to whether $tsla can issue publicly or privately to outsiders
1/ $tsla has a “bad actor” as it’s CEO and Chair...sanctioned under anti-fraud provisions of securities laws. Typically, that makes you an ineligible issuer. A spokesperson thought this an important enough issue to get it into the NYT settlement story... preemptively.
2/ Whatever the nature of those “waivers” ($tsla and the SEC won’t say), $tsla is most certainly no longer a wksi and thus can no longer go effective overnight. That equates to a 10 day mandatory comment period IF they remain S3 eligible... which I suspect they do not.
3/ the article hints and sounds like they have received a Reg D waiver only... which would include private issuances only. Unregistered shares and debt. Mandatory 6 month non-sellable. A precarious ask for a company under obvious financial stress. Regardless,comment period takes
1/ The fraud that is $tsla has had many enablers. With the FOIA dump, we can add one more… the @SEC_Enforcement itself. Subpoenas were issued 6/16 to tsla regarding Model 3 production and Goldman Sachs upgrade timing.
2/ Thus $tsla was under formal SEC Enforcement proceedings. Two weeks later on 6/21/16, Tesla makes the offer to acquire SCTY. Insane. The only change in disclosure made was pointed out long ago by @othereaboot in the Q2-16 10Q
3/ The FOIA dump provides evidence of 10/19/16 meeting between $tsla outside Counsel Brad Bondi regarding Matter 9490 in DC at SEC HQ. Numerous emails back and forth to schedule. This is what is known as a “Wells Meeting”. Evidence of that claim to follow