Tesla Faces U.S. Criminal Probe Over Musk Statements

https://www.bloomberg.com/news/articles/2018-09-18/tesla-faces-u-s-criminal-probe-over-musk-statements

by whatok • 8 years ago

339 377 8 years ago

bloomberg.com

minimaxir• 8 years ago

Notably, this now involves the DOJ, not just the SEC.

tomatocracy3• 8 years ago

That's likely because the SEC does not have the power to undertake criminal prosecutions.

HelloFellowDevs• 8 years ago

I'm assuming non libel related statements and company related statements only.

harryh5• 8 years ago

There are a lot of things to respect about Musk.

But he lied on twitter in a direct effort to cause financial harm to people shorting Tesla stock. You can't do that. He should go to jail.

beaconstudios6• 8 years ago

But he lied on twitter in a direct effort to cause financial harm to people shorting Tesla stock.

Do you have evidence of this, or is it speculation?

tomc1985• 8 years ago

If you read his rants/tweets around this time it is pretty clear he is has it in for short sellers

harryh5• 8 years ago

The "lied on twitter" part is now clear. He said he had funding secured for a buyout at $420 which he has now basically admitted was not true.

The "cause financial harm to people shorting Tesla stock" is a bit of speculation but it seems basically obvious to all observers.

rigsby502• 8 years ago

Are you saying he bought Twitter at $420 and the funding was secured for it? Because that sounded like an outright lie. He also doubled down by making that blog post thereby voicing this in his capacity as Tesla CEO.

It wouldn't be illegal if there was a tender offer for the shares at $420.

atonse2• 8 years ago

As sad as this makes me (because I want Tesla to be wildly successful), I have to agree. This is textbook and brazen stock manipulation, a flat out crime.

crankylinuxuser2• 8 years ago

Isn't "Opening a civil and criminal investigation" without due process, also direct manipulation as well? Surely, prior to a fault/guilty verdict, running someone through the mud is furtherance of that, no?

This reminds me of "perp watches" posed by police departments on Facebook and twitter. No charges, but arrested - and you get to live in the newspaper and social media regardless if you are exonerated. Cause, public shaming?

edit: s/peep/perp/

lgeorget3• 8 years ago

I guess I'm a bit off-topic but sometimes I really fail to understand the USA culture. You can make the most outrageous and racist comments because of "freedom of expression" but making speculators lose their shit with a couple of tweets is a "textbook crime" for which you should "go to jail".

ConfusedDog2• 8 years ago

Why is it a lie? Saudi did not invest Lucid when he posted the twit. You don't know that funding was not secured. As a matter of fact, if the board supported the decision, it would have been Tesla being invested. The statement itself is not necessarily a lie (could be) but it seems to me likely not.

whatok7• 8 years ago

Did you read the statement he put out? He basically said everything was a lie.

32847yjo87tj2• 8 years ago

Except he didn't lie. Funding was secured. So much so that when shareholders objected and Musk retracted, the Saudi wealth fund went out and invested substantially in a Telsa competitor.

This is all drama for drama's sake.

camjohnson263• 8 years ago

A $1 billion investment isn't even close to what it would have cost to take Tesla private at $420.

rootusrootus10• 8 years ago

Guess we'll find out. He'll have documentation for the feds, and then they will not charge him with a crime.

abalone7• 8 years ago

This is a massive oversimplification. Musk may be in peril but this is not as cut-and-dried a case of fraud like you make it seem. Consider this recent comment from the SEC:

“When you talk about fraud,” [Jina Choi of the SEC] answered, “you’re talking about a state of mind, you’re talking about mens rea. We call it scienter. You have to do something with intentionality. The idea of just making a misstatement doesn’t necessarily rise to the level of fraud."

Misstatements can “be the first step to fraud,” Choi had added. “But generally, when we talk about fraud the F word, I think we are talking about a state of mind that’s a little bit higher than that.”[1]

That telegraphs a pretty lenient stance on misstatements that aren't completely fabricated. And there were actual serious negotiations happening here. That's not in dispute.

Without question, Musk made a misstatement. But what was his state of mind? Was there intent to deceive, or was he merely overzealous in his interpretation of the negotiations? If he can argue the latter then it may not rise to the level of criminal fraud.

[1] https://techcrunch.com/2018/09/13/a-tesla-investor-says-he-w...

JumpCrisscross5• 8 years ago

That telegraphs a pretty lenient stance on misstatements that aren't completely fabricated

American commercial law goes out of its way to avoid criminalizing stupidity. At a certain level, the difference between a genius and a madman is the genius was correct. They are indifferentiable without the benefit of hindsight.

The nail in Elon's coffin (or lack thereof) will probably revolve around the degree to which he documented his animus towards short sellers in the days leading up to the misstatement.

SilasX5• 8 years ago

Yes, it can be an oversimplification, but in this case it isn't. He clearly wanted to pump up the stock price and screw short sellers (he threw lots of indicators in the public space), and his statement was clearly and knowingly false. There was no secured funding.

Optimism might justify a statement like "final stages of signing funding" or "almost closed the deal" or even "funding as good as secured" -- there might be ambiguity there. Not for "funding secured".

This is as close to textbook as you can get.

freerobby• 8 years ago

He doesn't even need to do that! The feds need to prove he never intended to take Tesla private, or that "funding secured" was somehow isolated from those intentions and tweeted disingenuously to move the stock price. Good luck with that -- all evidence is to the contrary (talks had taken place and the Saudis have entered the market in earnest, and relevant emails had been sent out across the entire company). It was a dumb tweet for a lot of reasons, and it's reasonable to subpoena emails and investigate (and obviously civil claims and losses are another story), but dwelling on "fraud" of all wrongs here is downright silly.

baddox4• 8 years ago

I'm no expert, but surely there are financial crimes other than fraud.

na85• 8 years ago

This.

I'm sick of people giving high-profile people in the tech sector a pass on their shitty behaviour because of the pervasive hero-worship culture. Jobs, Zuck, Torvalds, etc.

Irrespective of Musk "caring too much" or whatever other justification his fans have concocted, this is exactly the sort of behaviour (lying to manipulate the market) we have laws to prohibit.

We see articles every so often about how Tech as an industry needs to play catch up on the Ethics side of things. Now's the chance.

chollida1• 8 years ago

The sad piece of karma in all of this is that Musk tweeted in an effort to destroy the shorts.

His tweet turned out to:

- give the shorts a big dip in his stock,

- an investigation by the SEC

- an investigation by the DOJ

- the backing off of a deep pocketed investor in the Saudis

- Him potentially being personally liable, which would mean having to step away from SpaceX and Tesla if he was found guilty of fraud.

This could be the biggest thing to come out of all of this. Imagine Elon getting a 2 year ban on begin an executive in a company. Or SpaceX not being able to bid on government contracts because their CEO is a felon.

There is going to be a lot of backroom dealing to do everything they can to prevent Elon from being charged.

- A lawsuit that is seeking class action status for anyone who was short at the time of his tweet.

- this is speculation, but it must have really strained his relationship with the board. I mean you can only fight so many battles at once, you'd think you'd want to have the board on your side

All to screw with the shorts, who really have no power what-so ever to hinder Telsa. If he had just not used twitter he and Tesla would be better off and the shorts would be worse off.

TAForObvReasons• 8 years ago

All to screw with the shorts, who really have no power whatso ever to hinder Telsa.

If Tesla wasn't burning through cash and didn't need an ever-inflating stock price in order to keep the house in order, the shorts would be powerless and in all honestly would back off. The only reason the shorts have power is that Tesla's future is currently heavily dependent on its stock price.

beaner• 8 years ago

Can you explain how that works? I thought that once a company's stock was listed, third parties just trade it amongst themselves. How does that activity affect Tesla in terms of how they're able to execute?

Nasrudith• 8 years ago

Stocks prices are based off of two things really - current earning and perception of potential earnings in the future.

Tech stocks are infamously based largely on the second more than the first. Many do go reinvestment heavy like Amazon did for years before they started to post more profits.

Given the feedback loop impact things get weirdly circular in potential for success based upon others. Not in a something from nothing sense but in a giving what it takes to succeed sense.

rigsby502• 8 years ago

Yes, it's called market manipulation.

simias3• 8 years ago

I'm not super knowledgeable in the stock market, what would he have gained from destroying the shorts? I understand that shorts are effectively a bet that the stock will go down but do they actually damage the company in any way? At a glance it sounds like trying to break the thermometer because you think it's too cold out there, the stock wasn't at risk because of the shorts, instead there were shorts because some investors though that the stock was at risk. What am I missing?

Also even if destroying the shorts was a positive outcome for Must and Tesla how does that excuse his behaviour? Isn't that textbook market manipulation?

zwerdlds3• 8 years ago

Shorts drive the price down, making it more expensive for the company to borrow from the market by selling stock. They have to sell more shares to receive a similar amount.

whatok7• 8 years ago

In addition to what other replies have said, Elon also has pledged some of his stock in order to secure personal loans. He will have to fund margin calls or sell his stock if the stock falls below a certain price.

NickM3• 8 years ago

If you short a stock, you profit when that company does poorly; since Tesla is one of the most shorted stocks out there, we have many people trying to spread FUD via blog posts/tweets/etc in hopes that they can drive the stock price down. (Or in some cases even going to extremes like fraudulently submitting reports to the NHTSA claiming design flaws and problems with Tesla cars.) This has the side effect of damaging public perception of Tesla.

propter_hoc• 8 years ago

Tesla's stock price is very high right now, largely on the basis that many investors expect it to do well in the future. This high valuation makes it easier for Tesla to raise more money to fund its future ambitions. The short sellers are promoting a story that Tesla will not do well in the future, and is overvalued today. If they manage to convince other investors of this story, the stock price may decline and hinder both Musk's personal wealth and prestige, and Tesla's ability to fund its future operations.

So it's somewhat understandable that Musk doesn't look kindly on the short sellers - he would prefer that skeptics stay quiet and stop trying to ruin his company's valuation. You are correct, however, that acting in a deceiving manner to make the shorts lose money is not an acceptable retaliation.

Asparagirl6• 8 years ago

Yes. I saw a tweet the other day that essentially said that the very worst thing you could do to Elon Musk would be to lock him in a comfortable conference room with plenty of food and water and excellent WiFi signal...and his phone.

I can think of a political figure for whom this would be true, too.

nickik7• 8 years ago

The problem I have with statments like this is that is twitter is often awesome as well.

Getting great updates about technologies in SpaceX, Tesla or Boring. He also answers questions of podcasters and journalists.

thedaemon• 8 years ago

Please define shorts. Google was unable to figure it out.

ComputerGuru• 8 years ago

People short selling the stock.

Invictus0• 8 years ago

Short-sellers: people that bet that the price of Tesla stock would go down.

mcbits• 8 years ago

Short sellers. People who sell something they don't own, speculating that they will be able to buy it later at a lower price.

If so, they make money. If not and the price goes up a bit, some shorts are forced to buy at the higher price to limit their losses. That pushes the price up further, forcing more shorts to buy, etc., causing a "short squeeze" where the price rapidly shoots up very high, "destroying" a lot of shorts.

prolikewh0a• 8 years ago

https://www.investopedia.com/terms/s/shortselling.asp

soohyung• 8 years ago

A short, or short position, is selling first and then buying later. The trader's expectation is that the price will drop; the price they sell at is higher than the price they buy it at later. The difference between the sale price and the buy price produces a profit or loss. [1]

[1] https://www.investopedia.com/terms/s/short.asp

Asparagirl6• 8 years ago

It’s important to note that Elon screwed over the “longs” (people holding TSLA stock) too, not just the shorts. Many people and funds bought more TSLA stock in the $350’s range on the assumption that of course the company could/would go private at $420/share. After all, hadn’t the CEO just said so?

danso6• 8 years ago

I was reading r/TeslaMotors that day and a long made the astute observation that shorting the stock after Musk's announcement when it hit around $380 was the most logical thing to do, because at most you'd be out 10% if Musk were telling the truth. If I had a trading account I think I might have gone for that.

staplers• 8 years ago

Longs are not "people holding stock". A long is purchased on borrowed capital paid back with interest. It is a much riskier play.

ebiggs• 8 years ago

Nope, he never said so. He used the word "considering" - to interpret that to mean it's a done deal is stupid, and all the risk you take is your own.

pbreit3• 8 years ago

I would never equate "considering" with "of course".

ProAm• 8 years ago

I think he's out at the CEO of Tesla soon anyways. Regardless of this mess.

Latteland6• 8 years ago

Why? He's succeeded against all odds in making a fantastic car, that's not in dispute, and they'll be profitable almost in q3 and definitely in q4.

mirceal• 8 years ago

Imagine the Lion!

thomaskcr• 8 years ago

I opened my first actual short position that day (instead of just buying puts). He literally set an upper limit on how much money you could lose and I just felt really confident he was full of crap.

Got out of the position at a bit under $310 so left a lot on the table but was happy. He literally handed people considering opening a short position on the stock a gift.

Asparagirl6• 8 years ago

...and those of us who bought puts, because we don't feel comfortable actually shorting a stock. :-)

(Congrats on your successful trade!)

danso6• 8 years ago

The small upside of this is that maybe Musk will be convinced to settle the libel suit that was announced yesterday [0]. For the suit filed in the UK, the max loss would be ~$400K (unless it goes to trial and he ends up paying Vern Unsworth's legal costs), and it would spare us the sad spectacle of Musk trying to prove that Unsworth is a pedo.

[0] https://www.buzzfeednews.com/article/ryanmac/cave-rescuer-su...

polkapolka• 8 years ago

I give Musk a little bit more credit than brutely calling someone a pedo without any proof. If you are as rich as Musk, there must be someone you can pay to dig up dirt on your opponents. Now there may be more trouble in showing that proof than settling. 400k is nothing for Musk, but principles and hurt ego are priceless.

onetimemanytime5• 8 years ago

This lawsuit is peanuts to Musk, money wise. Say he settles it for $20 million, that's nothing. And maybe Musk hires dozens of detectives that find out later that Unsworth went with underage girls (a lot of Europeans with some money do over there.) Still it's very petty of Musk to pick a public fight with a "commoner"

x0x0• 8 years ago

Not to mention the lawsuit for calling that diver in Thailand a pedo.

Right or wrong (the dude certainly seems not to be a pedo), Musk is the ceo of a currently near-failing company unable to produce and deliver cars as promised. And a defamation suit is what he's spending his time on? I'd be livid were I an employee.

saudioger• 8 years ago

I seriously hope that through this Elon Musk learns that he's not an expert at everything and sometimes he needs to shut up and listen, but I doubt it.

If he can't weasel his way out of this, I imagine he'll continue to spiral and lash-out... all this because he just can't shut up.

pmcollins• 8 years ago

Musk tweeted in an effort to destroy the shorts

Is there any evidence that this was his intent? How do you know that he didn't actually intend to take the company private?

dforrestwilson5• 8 years ago

A long list of investors publicly denied any talks with Tesla. All potential banks expressed puzzlement with the tweet as well. One of them would absolutely have to be involved for a deal of this size and none were.

Reporters asked everyone and found 0 evidence.

lmm• 8 years ago

He's said a lot of anti-short-seller things on twitter. Even if he genuinely wanted to take the company private, it's hard to see the "funding secured" statement as anything other than a lie.

bduerst4• 8 years ago

- the backing off of a deep pocketed investor in the Saudis

Musk is responsible for this because he actually rejected this deal, not because the Saudis were involved, but because it involved partnering with VW.

Timmah2• 8 years ago

Such a great land we live in where a CEO is investigated within weeks by criminal justice agencies for making a few tweets, but during the 2008 crisis other kinds of fraud (approving loans without verifying income, robo signing of "contracts") that cost people jobs, homes, and even lives, got CEOs unprecedented bonuses and billions in interest free loans to keep their ships afloat. God bless the USA.

gamblor9566• 8 years ago

The CEO in question may have violated multiple state and federal laws.

The problem during the crisis was that many of the things you listed weren't illegal because the laws and regulations that would have made them illegal had been rescinded in the years or decades prior. Thus, the CEOs got to keep their jobs and their bonuses and their freedom because even though what they were doing was highly immoral, it wasn't illegal.

hef198983• 8 years ago

One of the episodes on the Netflix documentary Dirty Money is about short sellers with regards to certain pharma stocks (the one click baiting with Skreli in the thumbnail but not in the story, otherwise it is a great watch). And one thing that struck about me about the short seller they interviewed was her analytical and systematic approach to it. What she was looking for was yet to be recognized flaws in a certain company that can only result in falling stocks in the long run. And than acting on them in concert with others.

A mean thing to do? Maybe. Or you could call it natural selection in some cases.

Going back to Tesla and Musk, I think his behaviour in the last couple of weeks, and all the information that surfaced since, probably just convinced every short seller out there that they are onto something.

EDIT: fixed some typos.

Fricken2• 8 years ago

Short sellers are not mean, it's a good thing they exist. They're calling out companies they believe have serious problems, to the benefit of shareholders who are being misled.

jimmaswell2• 8 years ago

It would be a (possibly huge) blow to our future as a planet if he were banned from being an executive of a company for even just 2 years. I hope for humanity's sake that it doesn't come to that.

WoahNow• 8 years ago

What makes you believe that? All the major car companies are making EVs and there are several SpaceX competitors (Blue Origin in particular). The SolarCity side of Tesla's business is declining, but there are still many companies offering solar installations.

jazzyjackson3• 8 years ago

get a better future

rayiner• 8 years ago

All great points. This is a lot worse than it probably seems to most people on HN. Imagine a prosecutor telling a jury that Elon funds a lavish lifestyle (with lots of details of the excess) with loans against his Tesla stock. That shorts of the stock threatened him personally, because of those loans, and alleging that he threw the $420 figure out there to counter-act the shorts. That’s a terrible narrative to have to deal with. The responses are not exactly things that would play well to a jury (“no, it was a marijuana joke!”).

onetimemanytime5• 8 years ago

> Imagine a prosecutor telling a jury that Elon funds a lavish lifestyle (with lots of details of the excess) with loans against his Tesla stock.

Not going anywhere. Even if Tesla goes to zero, Musk still is a billionaire, 10 times over with SpaceX. https://en.wikipedia.org/wiki/SpaceX#Ownership,_funding_and_...

It's not greed, he just hates that some don't bow to him.

joering22• 8 years ago

Imagine a prosecutor telling a jury that Elon funds a lavish lifestyle

Recent Paul Manafort case shows it doesn't do what its intent to do. Jury was not interested in Manafort luxury lifestyle and judge himself outright ban prosecutors from bringing it up again and again. Unless you believe they can prove Musk bought $2B worth of business suits.

Keyframe• 8 years ago

If it comes to worst, would it be possible for that single tweet to have started a damage chain worth far greater than actual Twitter market cap?

joering22• 8 years ago

Imagine Elon getting a 2 year ban on begin an executive in a company.

Its not that big of a deal - other execs at SpaceX recently came and say company run great and they are mostly in charge anyways.

There is going to be a lot of backroom dealing to do everything they can to prevent Elon from being charged.

Are you saying there are bribes or something? Can you please clarify?

stockdollars• 8 years ago

The sad piece of karma in all of this is that Musk tweeted in an effort to destroy the shorts.

Its not about trying to destroy or support the shorts its about having an effect on the stock price at all. Its some insider type stuff. He cant do that. The reason we like Musk so much is the same reason hes "failing". Hes not the typical CEO and he really doesnt want to be. I dont think he like being the boss, I think he rather build the cool stuff.

I think the money went to his head he is realizing that there is another tier to being rich and powerful that he still needs to climb in order to support the projects that drive his ambition.

kamaal• 8 years ago

>Imagine Elon getting a 2 year ban on begin an executive in a company.

In the US.

I'm sure there are a lot of countries that would be more than happy to invite such a hardworking, ambitious and industrious man to set up company like SpaceX in their countries.

If you make these sort of things impossible in your country, they will just happen else where.

scotchio2• 8 years ago

Another day, another excited slam piece headline against Tesla. Tesla's Nov 7 Earning Report must be good...

In all seriousness, no idea what Elon was thinking with that Tweet.

Gut says, long term Tesla will be fine and little will to come of this investigation.

dsfyu404ed2• 8 years ago

Gut says, long term Tesla will be fine and little will to come of this investigation.

Or this could be their DeLorean moment. People's guts are notoriously bad at predicting the future.

PakG1• 8 years ago

Out of curiosity, what was the DeLorean moment? I know DeLorean didn't succeed in the long term. But what was this "moment" you're talking about? Google gave me nothing.

gammateam• 8 years ago

Tesla's Nov 7 Earning Report must be good

the forward guidance is gonna suuuuuck

"The risk factors have been updated to include that our CEO is going to be arrested, the remaining executive is running for the hills with substantial severance packages and we will expend many resources to maintain confidence and acquire a new executive team"

carlivar3• 8 years ago

I think the excitement in the negativity is because Musk behaves like a petulant manchild. I like Tesla and want them to succeed. I don't like Musk and don't want blowhards like him to succeed.

zerotolerance• 8 years ago

The headline is almost as long as the article. Useless article.

romed3• 8 years ago

Good chance that Musk will get placed on the bad actors list and will be unable to serve as an officer or executive of Telsa.

S_A_P3• 8 years ago

Sometimes its possible to care so much that you lose sight of what is important. This happened to Elon. I think this will be a case study someday about CEO ethics. I found it very interesting that when he was on the Joe Rogan podcast he had so much to say about social media, and none of it was complementary. How he did not see the dichotomy of his twitter use and this situation strikes me as humorous. I feel like Elon needs to find some new handlers and get some team members that can keep him from shooting himself in the foot.

I only recently got back on twitter. I do not use my likeness or use it for any other reason except to find out about things I consume(stand up comedy, concerts, etc). Twitter is a great platform for that. Its an awful platform for speaking your mind when you run a company(or the country)

MrEfficiency• 8 years ago

Ive said really stupid stuff on Twitter and I lost fans as a result.

I cannot explain myself in only a few hundred characters, especially when people dont click links, or only see a small portion of the situation.

I did learn my lesson in my 20s.

supernovae2• 8 years ago

twitter wasn't around when we were in our 20s...

_Codemonkeyism• 8 years ago

"I'm using social media the right way, the others are doing it wrong and I wish they'd go away". Always the same line of thinking.

S_A_P3• 8 years ago

I could take your comment as either a dig at me or at Elon. I can see how either is applicable(and valid). I think I can just add that if I screw up on Twitter, there would not be the same consequences to a business or shareholders that Elon may face, but obviously it is not my place to tell him or anyone else they are doing it wrong.

stcredzero• 8 years ago

"I'm using social media the right way, the others are doing it wrong and I wish they'd go away"

"We're using our sovereign power and military force the right way. The others are doing it wrong, and we wish they'd go away."

Same old story. In one of Raymond Smullyan's books, there was a story of a word the US codebreakers in WWII couldn't quite translate. In the end, they settled on "pro-Japanese" as a shaky translation. Years later, a retired codebreaker is talking to a retired Japanese soldier, and is told that the code term meant, "sincere."

maxlamb• 8 years ago

Ethics? While true I think it will be more of a case study on sleep deprivation and the increased risk of making huge mistaken even for a "genius." I'm willing to bed 2hrs of extra sleep a day and delegating a bit more to have these 2hrs would have not only minimized these stupid mistakes, but obviously greatly increased his well-being and life-expectancy. In short, no matter how smart you are, if you have so much hubris that you think you can bend the laws of nature and do without sleep and ignore what your body is telling you, you will end up making a horrible mistake soone r or later.

MintPattern• 8 years ago

Yes, he seemed to be sleep deprived in that Rogan podcast.

orcdork• 8 years ago

"Sometimes its possible to care so much that you lose sight of what is important."

Oh come on.

S_A_P3• 8 years ago

Not sure what you think is wrong with this statement. Seems to me that he let his hubris, lack of sleep and desire to stop the short sellers get in the way of using a bit of discernment. For him that tweet was a weapon against the shorts. I have no reason to doubt that he is fully committed to Tesla being successful, so I stand by the statement.

GW1509142• 8 years ago

Considering he’s also facing a defamation suit for calling a man a pedophile on Twitter, and then doubling down on the claim later, I think we can afford to be less charitable about Musk at this point. He has an inexplicably fragile ego, whether it’s in relation to his PR move around those trapped kids and the people who actually saved them, and his conspiratorial ideation concerning “the shorts,” or his willingness to tank his own stock to lash out.

He doesn’t come across as caring too much about anything except his ego.

Latteland6• 8 years ago

This time the shorts really have him. Or do they?

It turned out Tesla wasn't killed by not being able to make the model 3 at all, it wasn't on being able to make the model s in larger volumes, it wasn't because there was no demand, that there would be no demand after various incentives around the world went down (still some left in the us, also available to all other car companies by the way), it wasn't because they couldn't make the model 3 in volume, it wasn't because they'd all catch on fire and burn up in accidents, it wasn't because the over-promised-over-named autopilot was dangerous and would kill people, it wasn't because the leaf, the volt, the bolt, the i3, the i8, and continually forthcoming cars from audi, porsche, ford, mercedes, bmw killed them. It wasn't because there was a secret sec investigation was preventing them from refinancing, it wasn't because they have just lied all this time about selling the cars for less than manufacturing cost (separate from their enormous money spent on infrastructure), it wasn't because the batteries would run down and not survive heat, cold, regular driving, daily driving, supercharging.

It was damn stupid for him to make that twitter comment.

JoshCole• 8 years ago

You may be getting down voted, but you're right that the last several years of fear, uncertainty, and doubt has been shown to have been bullshit in having not panned out.

Meanwhile, the last several years of warnings about climate change have been shown to be a true warning. My mother had to evacuate from a fire. A friend has had their city flooded. A different friends home was damaged by a hurricane. I've been begged on the street for a drink during a heat wave.

scotchio2• 8 years ago

Can anyone knowledgable of this kind of stuff comment on the likely outcome of the situation and scenarios (without sensationalizing)? If found guilty, not guilty, penalty (jail, fine, other), investigation time, length, impact on other companies like SpaceX, gravity/frequency of the event vs other companies / offenses, etc.?

cycrutchfield• 8 years ago

The DOJ couldn’t even prosecute any major banks for the fraud that led to the financial collapse in 2008. That is how hard it is to prove criminal intent for white collar crimes.

At best, they settle with Musk for some financial penalty.

nostrademons• 8 years ago

Imagine a private company with ballistic missiles and submarines...

I was musing the other day that Elon Musk may be planning to run for president. Why? Well, if there's one thing that 2016 showed us, it's that the road to the White House runs through snubbing Wall Street, calling the press a bunch of boring liars, accusing your opponents of pedophilia, making bizarre incoherent tweet storms in the middle of the night, and bragging about the size of your rocket.

khamoud• 8 years ago

It'd be funny but since he was born in South Africa he's disqualified from running.

monocasa2• 8 years ago

Ted Cruz was born in Canada. The naturalization requirement is a lot looser than you might think.

leesec3• 8 years ago

He also doesn't want to be president.

coolspot• 8 years ago

Vice president then.

alex_anglin• 8 years ago

Not being a natural-born citizen would still be a hurdle.

kec• 8 years ago

Elon is not a natural born citizen of the US (He's South African), he is ineligible for the presidency.

bdamm• 8 years ago

Didn't stop Ted Cruz from running, did it?

jokoon• 8 years ago

Aside from the fact that he's not born in the US, he doesn't seem like a good orator.

hyperbole• 8 years ago

"isn't a good orator"... Given that Trump is in office that doesn't seem to be a deal breaker

bduerst4• 8 years ago

Musk didn't have a major network invest in his name as part of their reality-TV branding. It's true that investing and tech circles are aware of him, but he's not a very well known brand to middle America, which would be key.

jtms• 8 years ago

From many of the interviews I have seen/read, he really only seems to care about human beings becoming a multi-planetary species. Everything else is a side show - means to an end. I know you were lampooning both him and the current administration simultaneously, but I still have faith in ole musky and his space ambitions. Right now it would only take one big uninvited space rock for the party to be over, but if we were on a couple other planets the party might go on!

uninvited space rocks == bad

sctb• 8 years ago

We detached this subthread from https://news.ycombinator.com/item?id=18016292.

alottafunchata• 8 years ago

unnessercery

ivraatiems7• 8 years ago

I'm curious - supposing HN had the power to decide, would you replace Elon Musk as CEO of Tesla? What kind of future does the company have without its founder?

Personally, I think I would be much more confident in Tesla, and much more likely to buy a Tesla product, if he were not in charge.

camjohnson263• 8 years ago

I would imagine the share price would drop dramatically if he was replaced, which would hurt Tesla's badly needed ability to raise capital over the next few quarters. They desperately need a new CEO but Musk has dug them into such a big hole that it may be too late to find one.

philwelch3• 8 years ago

I would sell Tesla to a large conglomerate that actually understands car production, like Toyota or VW.

ivraatiems7• 8 years ago

Isn't there a good chance they'd just mothball the whole company and keep on making regular gasoline-engine cars?

nickik7• 8 years ago

Understanding car production is less important then for EV then massive battery investment and knowlage, building a integrated brand, global charging infrastructure and so on.

Toyota might be better at building profitable cars, but Tesla is better at building profitable EVs.

rohit89• 8 years ago

Not me. Tesla is already in a precarious position and I expect it to fold pretty soon if Musk departs. Either that or they massively scale back their operations - in which case I will have no further interest in the company.

nickik7• 8 years ago

Do you want one of the most successful founders and tech CEO ever to continue to run the company?

Äh, yes, Elon has made Tesla successful and he made it into a major car company that is still growth strongly.

ivraatiems7• 8 years ago

How do you define "successful?"

If Elon is doing things that are illegal or otherwise just boneheaded now, how much leeway does he get? What would it take to make you decide he shouldn't be CEO?

rootusrootus10• 8 years ago

I would be far more optimistic if he was replaced with someone that has a good, established track record. Like, Alan Mulally. I'd go reserve a Model 3 today... :)

pastor_elm• 8 years ago

No. Use the Apple model. Steve Jobs was needed until the IPhone was really established (not to mention the IPod.) Only then should you bring in a guy like Cook.

forapurpose2• 8 years ago

Use the Apple model. Steve Jobs was needed until the IPhone was really established ...

The Apple model was to fire their impetuous founder, decline slowly into mediocrity, bring back the founder, and then achieve historic levels of success. Perhaps Musk needs a Jobs-like break?

until the IPhone was really established (not to mention the IPod.) Only then should you bring in a guy like Cook

If Jobs was healthy, he'd still be running Apple. And maybe they would have done something visionary since the iPad.

maceurt• 8 years ago

Completely different scenarios, completely different companies. Steve Jobs was never the technical guy, he was more the visionary. He could get away with that, because he had really smart engineers and producing phones and computers is a lot simpler than producing cars. Elon Musk is a genius, but what does he really know about production or getting the cost down for an electric car more than any other CEO of a major auto company? Elon Musk is a visionary, but a visionary for an auto company is not as vital as a visionary for a tech or computer company. They need a guy in tesla who can increase production and lower cost, or sell at a different price point and change target market for their cars. They don't need someone who is going to tweet out a lot of reckless things while hemorrhaging money for the company.

thelambentonion• 8 years ago

Emphatically yes; Musk being the current head of Tesla and SpaceX has been the defining characteristic in preventing me from seeking work at either company. I'd be sending out applications to both if he announced his departure (or even a long sabbatical).

I believe very much in the missions that Tesla and SpaceX romanticize, but I cannot reconcile those with Musk's public behavior. Calling people pedophiles on the internet, trying to suppress unionization efforts, and seemingly lying about going private entirely on a whim does not pass ethical muster for me.

diminoten2• 8 years ago

I think it's insane, the idea that we might have enough knowledge of Tesla as a company to make a decision like that.

I get it's a hypothetical and we're just navel gazing, but to even think our answers would be even remotely valid feels fairly arrogant.

village-idiot• 8 years ago

Tesla would do a lot better if Elon Musk got a social media manager who can veto his dumbest tweets.

bedhead2• 8 years ago

I'm not sure what he could be criminally charged with - neither he nor anyone else at the company sold stock and profited from his idiotic tweets. I believe you actually need to profit from manipulation in order for it to enter the realm of criminal.

camjohnson263• 8 years ago

They caused damage to short sellers when the stock price rose because of Musk's lie and they had to cover their losses, how is that not criminal? You don't have to personally profit to commit a crime.

bedhead2• 8 years ago

To my knowledge, and I'm in the industry, that is not a CRIMINAL act

reggieband• 8 years ago

I'm starting to get conspiratorially minded about all of this. It began when I couldn't understand the seeming coordination of the attacks against the Uber CEO. I mean, he seemed like the same kind of garden variety psychopath I expect in the role of CEO - why were there so many hit pieces about him specifically? Now Musk is a new target and somehow everyone is cheering for him to fail.

Seems like if you get into competition with the auto industry or threaten the oil industry by attempting to change consumer behavior then you become a massive target. I actually feel like forces other than public opinion are at work here.

rootusrootus10• 8 years ago

Or, you know, it could be something simple and not a conspiracy at all. If Musk didn't attack every last person who says anything critical about him, even calling one of them a pedo in a public forum, there wouldn't be nearly as much animosity towards him. He has 100% brought this down on himself, he can not blame anyone else.

The regular auto industry is likely to crush Tesla within a few years, regardless of how successful they are with the Model 3. They don't need to take shots at the CEO to achieve that, they're going to do it through bringing their own competing products to market and leveraging their own hard-won experience building shitloads of cars.

keelhaule• 8 years ago

especially when the article mentions :p "who were granted anonymity to discuss a confidential criminal probe" press reliability at its finest

roywiggins• 8 years ago

You think Bloomberg- of all outlets- is manufacturing sources at the Justice Department?

_audakel2• 8 years ago

Reminds me of the book "private empire" about ExxonMobil.

"Private Empire pulls back the curtain, tracking the corporation’s recent history and its central role on the world stage. The action spans the globe, moving from Moscow, to impoverished African capitals, Indonesia, and elsewhere in heart-stopping scenes that feature kidnapping cases, civil wars, and high-stakes struggles at the Kremlin."

Big cooperations could easily find a way to run a "blackops" negative PR campaign, on top of pulling strings in the SEC

overcast• 8 years ago

The frequency of these bizarre actions by Musk are going up. Is he seriously just cracking under the pressure of having way too much on his plate? The dude is obviously a genius, but he's turning into a mad genius.

drb91• 8 years ago

Why do people keep calling him a genius? His main distinction is his money and DESIRE to build interesting things. Nowhere is his staggering, extraordinary intelligence evident. I’d love to be demonstrated wrong, but this genius fetishism seems to be harmful with no benefit: the man is running a company. Judge him on how well he does, not how he’s so intelligent it's so sad he can't take care of his employees responsibly.

diminoten2• 8 years ago

Random events tend to appear clustered.

Asparagirl6• 8 years ago

The thing is, now that the DOJ has their foot in the door, they may not stop at the infamous tweet. They're going to look at the books. They're going to be talking to allllll the recent senior executive departures, some of whom ran for the hills within days of taking their jobs.

Who knows what kinds of bugs they'll find when they turn over some rocks?

aeriklawson• 8 years ago

A public lesson for future CEOs to just stay the fuck off social media - Elon swam far up shit creek purely because of his engagement with Twitter. It's not worth the trouble.

SilasX5• 8 years ago

I wouldn't be surprised if the Board had (at the least) considered restricting his social media so that his messages require approval from someone else.

Animats• 8 years ago

Next the California Highway Patrol will be after him for texting while driving.

Tesla might be better off without Musk. It's past the stage where it needs a visionary. Now it needs someone who can run a big auto manufacturer.

rboyd• 8 years ago

first interplanetary flight risk?

jv22222• 8 years ago

I'm curious, if you are a long, did you upvote this HN submission?

It would be interesting to see how sentiment like that shaped the ebb and flow of Hacker News.

thiagotomei• 8 years ago

manicdee• 8 years ago

Note: no criminal probe. This is hyperbole.

Note: Martha Stewart did worse and was only found guilty on the coverup and fraud after the fact.

Note: hit piece by Bloomberg, clearly attempting to manipulate stock price as they have done for years without any prosecution.

lorenzorhoades• 8 years ago

Suprising to see here that the majority seem to be anti-Musk. "He's guilty, send him to jail" without allowing evidence to come forward that these statements were false.

"the matter should be quickly resolved as they review the information they have received."

If anything the public statement says the opposite. I actually believe there may have been some email, or conversations about a buyout of Tesla. Wouldn't be the first time, Google almost bought Tesla in 2008 during the financial crisis.

Tesla Faces U.S. Criminal Probe Over Musk Statements

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