I hadn’t paid much attention to Elon’s margin loan for a long time because he was so far from a margin call, but someone nudged me to take a look. Here is a quick analysis. Musk could be pretty close to a margin call. Notes: March 31, 2022 numbers are from the most recent proxy. I adjusted share quantity for stock split. Max loan value is based on Tesla’s 25% max LTV policy for officers.

1/ Elon Musk is openly defying his SEC fraud settlement and violating a federal court order. @SECEnfDirectors @SEC_Enforcement, are SEC settlements optional now? Elon Musk is required to get tweets about $TSLA financial condition pre-approved by an experienced securities lawyer. 2/ Yesterday, Elon Musk updated Tesla revenue projections by responding to a tweet within 3 minutes or less. There is no possible way his tweet could have been reviewed in 3 minutes or less. I attach the relevant portion of Musk’s SEC fraud settlement for handy reference.

1/ Putting myself in Alameda official shoes, I think they absolutely must establish their authority over the Tesla reopen. They can do so via compromise including one that allows Musk to save some face, but they simply cannot afford to let Musk just call the shots. 2/ There are still a lot of innings left in C19 restrictions and they can’t permit Musk and Tesla to defy their authority. That would destroy their authority in general over others, and over Tesla in the future.

1/ Here are key reasons why I think the short risk/reward is great RN:
A. Musk burned many baggies on Friday. Some percentage will never come back.
B. Musk torched brand with C19 tantrums. Many supporters of lockdowns (esp. wealthy liberals are key customers). 2/ C. Very good chance Musk meltdown was triggered by horrifying condition of business and/or other terrible news.
D. C19 has devastated auto business, and global economy. Expensive cars will be particularly hard hit. Stretch M3 buyers will be mostly gone for a long time.

1/ Here’s a lesson in financial incentives and sociopathic billionaires.
Elon Musk pledged about half of his shares as of 12/31 when the stock closed at $418.
On March 16, Alameda issued shelter in place order clearly requiring to close its Fremont factory. 2/ By March 18, we learned that Musk was defying the order and keeping the factory open. Why? Because the stock had dropped into the $350s, and it was dropping fast. To maintain the value of his share pledge, Musk would have had to pledge over 60% of his shares in the $350s.

1/ My take on $TSLA Fremont factory situation, having followed it pretty closely: I think it is likely that the Bay Area lockdown order is going to be extended beyond May 3, but modified to permit auto manufacturing with safeguards to protect employees. 2/ That is the most sensible way to reconcile statements from officials indicating the lockdown order will likely be extended and Tesla’s behavior, which indicates confidence $TSLA Fremont will be allowed to reopen May 4.

1/ Here is my take on some key underlying drivers of the timing of Fremont re-opening, after some reading and poking around. 2/ A consensus is developing that shelter in place orders can be eased gradually, after active C19 cases drop low enough that available testing resources can be aggressively deployed to identify new infections, and then any new cases can be tracked and quarantined.

1/ Thank you @TroyTeslike for the bold and thought-provoking 95,000 Q2 deliveries forecast. A few thoughts and questions for team . 2/ Troy assumes demand is down ~25% from where he thinks it would have otherwise been. US car sales have pretty much ground to a halt, and eyeballing new and used car prices, I think 25% is a better estimate of the price cuts we will see on many cars. I would think -50% demand.

1/ $TSLA Fremont shutdown thoughts and questions. My base case is that Fremont is now shut down through at least Apr 7 (current end date for lockdown absent extension). Musk could go to court, but that would be a bad idea. The public blowback would be huge. 2/ I think it is more likely than not that the lockdown order is extended beyond Apr 7. Covid19 is not likely to peak in US until the latter half of April, at the earliest. I have a hard time picturing a decision to allow the lockdown to expire pre-peak. So May 1 base case?

1/ My quick take on short selling ban news. Regulators around the world have extensive powers to ban or limit short selling. Korea just banned all short selling for 6 months, and short selling of certain stocks was banned in certain parts of Europe. 2/ During the financial crisis, the SEC banned short selling of certain “financial stocks.” Fun fact: In 2008, many (who were in denial about causes of the crisis) blamed short sellers for loss of confidence in banks.

1/ I always like to stress test my thinking when I feel really confident about a view, so here goes and please shoot at it. COVID19 is out in the US. Very few people have been tested due to very limited testing capacity. That is about to change. 2/ Last I heard/read, US testing capacity is about to increase to thousands per day by next week, substantial NY testing capacity is coming online tomorrow, and private labs will be (already are?) testing very soon.

1/ Tesla deliveries announcement said, "Orders generated during the quarter exceeded our deliveries, thus we are entering Q3 with an increase in our order backlog. We believe we are well positioned to continue growing total production and deliveries in Q3." 2/ This is brilliant linguistic backing away by Musk from prior full year guidance. Prior guidance "reaffirmed" a "forecast" of 360-400k deliveries. Likely due to pesky lawyers reviewing his statements carefully and new fact, he can't say that anymore.

1/ Mini-Tweet storm on my Musk personal margin loan calculations: As of 12/31/18, Musk had pledged 13,394,056 shares with a market value of $4,457,541,837. At yesterday's close of $185.16, Musk would have to pledge a minimum of 24,074,000 shares for the same $ value. $TSLA 2/ Per Musk's latest form 4, he owns 34,102,560 shares outright and has options to buy another 5,099,901. I am going to (not) go out a limb and predict that there is NFW that Musk's loan balance has gone down, so he has at most ~10,028,560 shares left before dipping into options.

1/ My updated quick take on SEC v Musk: It is highly likely that there are meaningful ongoing settlement negotiations. The chances of settlement are quite high at this point. I think there is a good chance the settlement will include Tesla as a party. 2/ I would not be surprised to see simultaneous settlement of new allegations, such as a $TSLA Reg FD violation. I remain of the view that the SEC won't settle except on terms that ensure Tesla will control Musk written communications.

1/ My quick take on Musk response to SEC contempt motion: His lawyers did an excellent job, as I predicted they would. Also, as I predicted, there were no olive branches. Musk is fighting tooth and nail. 2/ In particular, Musk's counsel did a good job of glossing over the inconsistencies between the shareholder letter, the earnings call, and the offending Tweet.

1/ Here is my quick take on the SEC contempt filing against Musk. It is a very big deal that the SEC took this step. After letting Musk off easy, and giving him a second chance, they clearly recognize that he is pissing all over them. $TSLA. 2/ This is going to take a while to play out. Musk and Tesla will need to make a filing; there will be a hearing. The judge will need to take time to decide. This is going to be a big overhang on the stock and make it very difficult to raise capital any time soon.

1/ So, the SEC wussed out and is looking to finalize settlement with Musk and $TSLA. I am surprised the SEC is letting Musk get away with publicly casting doubt on the merits of the settlement. This is the path of least resistance and they are giving Musk special treatment. 2/ Putting myself in the SEC's shoes, I can certainly understand why it would have been awful to have to go to war with a national hero (I just vomited in my mouth), and it would have made the SEC look bad to back out of the settlement. (Think skin, indecisive, etc.)

1/ Time for a procedural recap on SEC v. Musk, since I get a lot of questions and comments when I Tweet about the settlement, which is now on life support. $TSLA. 2/ The SEC filed a lawsuit against Musk in federal court. Among other remedies, the SEC complaint sought a full officer/director bar against Musk. The SEC and Musk signed a settlement agreement, filed that agreement with the court and asked the court to approve it.

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.

1/ To those who claim that Musk can avoid public co reporting by taking Tesla private through a fund structure, and keep most Tesla shareholders without exceeding SEC 500-2000 shareholder cap for non reporting companies, I present to you SEC Rule 12g5-1(b)(3). $TSLA. RT. 2/ "If the issuer knows or has reason to know that the form of holding securities of record is used primarily to circumvent the provisions of section 12(g) or 15(d) of the Act, the beneficial owners of such securities shall be deemed to be the record owners thereof."

1/ I think that the Tripp whistleblower complaint will likely doom Tesla, even assuming the best case outcome for the company. $TSLA. Retweet. 2/ Nowadays, the SEC rarely ignores a credible inside whistleblower, represented by strong counsel, particularly if the complaint is highly publicized like this one. Even assuming that the SEC has its doubts, it is too risky not to investigate.