Taking Tesla private (Split from SpaceX Thread)

[mikegarrison]

I know this thread is about SpaceX rather than Elon Musk, but I wonder what would happen to SpaceX if Musk ran into trouble?

And he might run into trouble. He fired off a tweet a few days ago claiming that he had financing to take Tesla private at $420/share, and the stock price bounced up 11%. But ... if the SEC decides he was actually trying to manipulate the Tesla stock price, he could be in for some trouble. Like, prison kind of trouble.

Anyway, leaving aside the specifics of Tesla, just how dependent is SpaceX on Musk? What would happen to the company if he was run over by a truck tomorrow, for instance?

[tater]

6 minutes ago, mikegarrison said:

Anyway, leaving aside the specifics of Tesla, just how dependent is SpaceX on Musk? What would happen to the company if he was run over by a truck tomorrow, for instance?

The launch business is obviously secure in the hands of Shotwell. Moving forward, the vision might change, but I think a next gen vehicle is certainly needed (ahead of NG, etc), and so I see BFR (or a version) continuing as well.

[sevenperforce]

20 minutes ago, mikegarrison said:

I know this thread is about SpaceX rather than Elon Musk, but I wonder what would happen to SpaceX if Musk ran into trouble?

And he might run into trouble. He fired off a tweet a few days ago claiming that he had financing to take Tesla private at $420/share, and the stock price bounced up 11%. But ... if the SEC decides he was actually trying to manipulate the Tesla stock price, he could be in for some trouble. Like, prison kind of trouble.

Securities manipulation has a high bar for conviction and requires corrupt intent. SEC won't touch Musk.

[IncongruousGoat]

17 hours ago, tater said:

The launch business is obviously secure in the hands of Shotwell. Moving forward, the vision might change, but I think a next gen vehicle is certainly needed (ahead of NG, etc), and so I see BFR (or a version) continuing as well.

I'd say the vision is secure as well. From what I've seen of various interviews with Shotwell, she's an even bigger dreamer than Musk when it comes to that. Plus, I think most of the engineers working there also buy in to the vision, considering the hours they're working to make it happen.

[Confused Scientist]

On 8/13/2018 at 2:52 PM, sevenperforce said:

Securities manipulation has a high bar for conviction and requires corrupt intent. SEC won't touch Musk.

If they do, could Musk just take Tesla private so the words he said were the ones he meant?

[sevenperforce]

15 minutes ago, Confused Scientist said:

If they do, could Musk just take Tesla private so the words he said were the ones he meant?

He can't afford to, not without Saudi backing.

Wouldn't make a difference, either. If he was guilty of securities manipulation, then he was guilty when he sent the tweet, regardless of what he does thereafter.

But the SEC would have to prove that he didn't mean he intended to consider taking it private, which would be well-nigh impossible to prove, especially since all indication is that he was seriously pursuing the possibility. They would investigate whether major off-the-cuff decisions/ideas have been regularly posted to his twitter account. Like, has he ever made a split decision on what to do with a major economic venture and tweeted about it before?

[mikegarrison]

16 hours ago, sevenperforce said:

But the SEC would have to prove that he didn't mean he intended to consider taking it private, which would be well-nigh impossible to prove, especially since all indication is that he was seriously pursuing the possibility. They would investigate whether major off-the-cuff decisions/ideas have been regularly posted to his twitter account. Like, has he ever made a split decision on what to do with a major economic venture and tweeted about it before?

Actually, the issue is not "taking Tesla private". The issue is claiming he already had the funding lined up. It now appears he did *not* have the funding lined up, when he claimed he did.

[sevenperforce]

5 minutes ago, mikegarrison said:

Actually, the issue is not "taking Tesla private". The issue is claiming he already had the funding lined up. It now appears he did *not* have the funding lined up, when he claimed he did.

Not a lawyer, not legal advice, yada yada......

...but from where I see it, the SEC would need to prove:

1. The tweet "Am considering taking Tesla private at $420. Funding secured." constituted an intentionally false statement, rather than exaggeration, speculation, equivocation, or hyperbole.
2. The tweet in #1 was solely intended to manipulate the price of TSLA.
3. Musk believed he would have immediate financial gain by manipulating the price of TSLA.

None of these can be easily proven beyond reasonable doubt. Musk may have believed funding was secured when it was not, or he may have merely meant that an investor with sufficiently deep pockets had shown interest. It's easy to object that he wasn't trying to manipulate the stock price, given the long string of complaints about short sellers and bad press. And while #3 is easiest to argue for, even that might be challenging, since Musk clearly is not interested in selling.

[mikegarrison]

3 minutes ago, sevenperforce said:

Not a lawyer, not legal advice, yada yada......

...but from where I see it, the SEC would need to prove:

1. The tweet "Am considering taking Tesla private at $420. Funding secured." constituted an intentionally false statement, rather than exaggeration, speculation, equivocation, or hyperbole.
2. The tweet in #1 was solely intended to manipulate the price of TSLA.
3. Musk believed he would have immediate financial gain by manipulating the price of TSLA.

None of these can be easily proven beyond reasonable doubt. Musk may have believed funding was secured when it was not, or he may have merely meant that an investor with sufficiently deep pockets had shown interest. It's easy to object that he wasn't trying to manipulate the stock price, given the long string of complaints about short sellers and bad press. And while #3 is easiest to argue for, even that might be challenging, since Musk clearly is not interested in selling.

I guess we'll see what happens. This whole Tesla thing seems to be having a bad effect on Musk's judgment, IMO. But it's only an issue for this forum in how (or if) it affects SpaceX.

Edited August 15, 2018 by mikegarrison

[sevenperforce]

22 hours ago, mikegarrison said:

I guess we'll see what happens. This whole Tesla thing seems to be having a bad effect on Musk's judgment, IMO. But it's only an issue for this forum in how (or if) it affects SpaceX.

Looks like I was wrong....

https://www.cnbc.com/2018/08/15/sec-has-reportedly-served-tesla-with-a-subpoena-after-elon-musks-take.html

[LordFerret]

On 8/13/2018 at 4:34 PM, mikegarrison said:

if Musk ran into trouble?

He is in trouble. Been saying this for a while... he's running out of money. And now, he's got the SEC on his tail. Go back and look at what he did with the Tesla car though... to reduce costs and speed up production; 50 less welds on the frame, AND, skipping the final brake test before rolling the car out the door.

There's something wrong with this guy. I wouldn't sink a dime into any of his ventures.

[XB-70A]

53 minutes ago, LordFerret said:

 There's something wrong with this guy. I wouldn't sink a dime into any of his ventures.

That's what one of my closest relatives and a pretty qualified entrepreneur is saying for a long time now.

However, he's really good in communications and to acclimatize the crowds. Just the fact that he is perceived as the sole and ultimate creator of Space Exploration, despite some numbers:

- His personal investments are evaluated around 100 millions between 2002 and 2006.

- Investing companies (mainly DFJ and Founders Found) injected another 100 millions in between 2002 and 2008.

- Then the NASA with 3.124 billions between October 2010 and September 2015, just for the CCDev:

 * Commercial Crew Development 2: 75 million, dedicated to the design and development of Dragon v2 program.
 * Commercial Crew integrated Capability or CCiCap: 440 million, mainly concerning Dragon v2, and also an upgrade of Falcon 9 (turned to be the Block 5).
 * Certification Products Contract 1: 9.6 million for the test of Dragon v2 for crew transportation.
 * Certification Products Contract 2: 2.6 billion allocated to the qualification test.

 

 

[Mad Rocket Scientist]

3 hours ago, XB-70A said:

That's what one of my closest relatives and a pretty qualified entrepreneur is saying for a long time now.

However, he's really good in communications and to acclimatize the crowds. Just the fact that he is perceived as the sole and ultimate creator of Space Exploration, despite some numbers:

- His personal investments are evaluated around 100 millions between 2002 and 2006.

- Investing companies (mainly DFJ and Founders Found) injected another 100 millions in between 2002 and 2008.

- Then the NASA with 3.124 billions between October 2010 and September 2015, just for the CCDev:

 * Commercial Crew Development 2: 75 million, dedicated to the design and development of Dragon v2 program.
 * Commercial Crew integrated Capability or CCiCap: 440 million, mainly concerning Dragon v2, and also an upgrade of Falcon 9 (turned to be the Block 5).
 * Certification Products Contract 1: 9.6 million for the test of Dragon v2 for crew transportation.
 * Certification Products Contract 2: 2.6 billion allocated to the qualification test.

I think it's a little unfair to say that people consider him as the sole and ultimate creator of space exploration, most people I've heard (either in person or on the internet) either are like "SpaceX, they're the ones landing rockets right?" or "What SpaceX has done considering how much money and time they had is absolutely amazing," and generally attribute much of that success to Elon Musk. I don't think anyone would suggest that whoever put the money into SpaceX was who made it successful, even if its success relies on that money.

IMHO, the most impressive thing Elon Musk has done is starting SpaceX and Tesla. There are plenty of good ways to make rockets or electric cars, although you'd probably see a lot of convergent evolution. The thing is that Elon Musk was willing to risk starting them, and just trying any way to make rockets or electric cars. Whether they will continue to succeed is in many ways beside the point: They've proven that you can make money with rockets and electric cars. I also appreciate that those companies were, I believe, not just started to make money for Elon Musk.

[XB-70A]

1 hour ago, Mad Rocket Scientist said:

I think it's a little unfair to say that people consider him as the sole and ultimate creator of space exploration, most people I've heard (either in person or on the internet) either are like "SpaceX, they're the ones landing rockets right?" or "What SpaceX has done considering how much money and time they had is absolutely amazing," and generally attribute much of that success to Elon Musk.

It's interesting (really), as most of the people I know and/or met in different places obviously do not know much about SpaceX technically talking, but just love the character of its CEO. Most of them were not realizing the company wasn't made of just some hundreds of experts with their leader, but a high sized one where decisions are not taken by a single head.

[Mad Rocket Scientist]

3 minutes ago, XB-70A said:

It's interesting (really), as most of the people I know and/or met in different places obviously do not know much about SpaceX technically talking, but just love the character of its CEO. Most of them were not realizing the company wasn't made of just some hundreds of experts with their leader, but a high sized one where decisions are not taken by a single head.

It's definitely true that Elon Musk likes to make a show and use popularity to his and his companies' advantage. But I don't really buy the idea that his celebrity status and success of his companies is entirely because of public relations expertise. Of course there's really no way to know.

[LordFerret]

On 8/16/2018 at 5:42 PM, XB-70A said:

he is perceived as the sole and ultimate creator of Space Exploration

Yes, perceived. Problem with that is such perceptions are misleading (and in this case, totally wrong) and potentially harmful in so many ways.

And now, in the news, he comments about losing it ... he's having a breakdown. I've got news for you, Elon, that's not going to fly with the SEC.

Edited August 18, 2018 by LordFerret
forgot link

[kerbiloid]

https://nordic.businessinsider.com/elon-musk-ambien-use-tesla-board-what-drug-does-2018-8/?r=US&IR=T

[LordFerret]

5 hours ago, kerbiloid said:

https://nordic.businessinsider.com/elon-musk-ambien-use-tesla-board-what-drug-does-2018-8/?r=US&IR=T

Other mention elsewhere has been made of his use of other "recreational drugs" as well as the Ambien... so, like, what's he been smokin? Might explain these visions of colonizing space that he's been having, eh?

 

[mikegarrison]

Musk running into trouble again. This time it was smoking a joint on a TV show, which seems to have led to a couple of his top Tesla executives quitting.

[kerbiloid]

3 hours ago, mikegarrison said:

Musk running into trouble again. This time it was smoking a joint on a TV show, which seems to have led to a couple of his top Tesla executives quitting.

Afaik he was also drinking rocket fuel, so two wrongs make a right.

Meanwhile two tops have left Tesla (if I get it right Chief Accountant and Chief Human).
https://www.cnbc.com/2018/09/07/teslas-chief-accounting-officer-dave-morton-resigns-after-just-a-month.html

[YNM]

On 8/17/2018 at 8:27 AM, Mad Rocket Scientist said:

IMHO, the most impressive thing Elon Musk has done is starting SpaceX and Tesla.

More than enough to put you in the history books these days !

[LordFerret]

Well now we know why he's running out of money... it's all going up in smoke.