-IGU- have you looked at James Stephenson on Twitter?
@ICannot_Enough
His financial analysis is super deep and detailed.
AND…
thanks to everyone for keeping this board alive for so long!
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He’s still very much deserving of contempt. Not because he’s a bad engineer or entrepreneur, but because he breaks laws on such a regular basis: criminal, regulatory, civil, libel, you name it.
In US, because you are a successful entrepreneur or a celebrity you cannot commit crimes and expect to walk away free.
Elon has pushed the boundaries, tested many laws. For ex: When he famously went into a podcast where he smoked weed. Now, if you are trying to do business with the DOD, even if you had stopped drugs like 20 years, it is not easy, actually impossible, to become a contractor to them. This is something that deprived the employment for many capable folks, who in their youthful enthusiasm, had tried drugs, but now living drug free and a purposeful life.
Elon to my knowledge is till doing business with DOD. I am sure there are folks who looked at it and made an exception to Elon. Is it unfair to others? No. OTOH, he pushed the boundaries and showed why certain laws need to be reviewed.
Rebels have a very important role in the society. Think of them as lateral thinkers for laws and customs of the society. You may not always agree with them, but in the end you are glad there is something who can call the BS out.
As far as Twitter saga is concerned, TWTR as an organization should/ will fight the deal in the court. Elon’s tactics to persuade TWTR to agree to reduce price has failed. I consider round 1 is won by TWTR.
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I looked into it a little earlier this year. Hey, phone calls and emails are free right?
Yeah, I even had a meeting with them once. If nothing else, it gets you onto a higher class of mailing list.
I decided it made no sense since the places I go most often have outstanding commercial connections. (but mainly I’m cheap)
If you want to go between two second- or third-tier airports, it’s probably marvellous.
Remember, if you are staying more than about 2 nights at your destination you will likely have to pay for two empty legs for a round trip.
I believe Netjets cards, though pricey, include the repositioning and you only paid for your flight time.
Within the “collective service area” and popular destinations outside it.
Unlike many other private aircraft offerings including chartering and fractional ownership.
Jim
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If you want to go between two second- or third-tier airports, it’s probably marvellous.
This is definitely true from my rare experiences flying private for work. For trips under 800 miles a nice turboprop would be a great affordable option. It will take a little longer than a jet but the price would be right and you would more than likely take off closer to home and land closer to your final destination. The proximity can even negate the speed of a jet for many trips.
The only time I think I could justify it in my personal life would be if I had multiple friends that wanted to go to something like the Super Bowl when hotels are four night minimums and rates are crazy.
Jeff
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Criminal?
That is a bold statement.
Well, no, to doubt it is a cult statement. It’s not like any of them is a secret or anything.
It’s hard to say where to start…I believe there are entire web sites dedicated to listing them.
The recent ones are good, as they’re fresh in the memory:
Maybe the $156m he saved by violating securities law by not reporting his stake building in Twitter
until 11 days after the legal deadline having already passed the reportable threshold?
Violating the Twitter purchase contract terms is just a contract violation, but it’s a 10 digit ripoff–huge points for scale.
Great investment opportunity though: buy now at $34.20, wait for the class action suit, collect the extra $20.
Illegal violations of the consent agreement to have material tweets reviewed by Tesla legal staff.
(he freely admits that he didn’t, and it’s a matter of public record that he was required to)
The old “funding secured” announcement for stock manipulation and material false statements to investors, and related issues.
Contempt.
He was not held responsible for the bailing out of his brother’s soon-to-be-defunct company with other people’s money, so I suppose one can’t call that illegal.
It was pretty obviously a stitch up among buddies to the detriment of existing minority shareholders, though.
Then there are all the flatly false announcements of products that don’t exist, he knew didn’t exist, and some of which can never exist as described.
Some of those statements might not be unlawful, fair enough. Youthful exuberance.
But as he’s never (and likely never will be) charged with stock manipulation it’s hard to say what the courts would say if asked.
Such whoppers are certainly handy to boost the stock price whenever it’s time to raise capital or exercise options.
Some people might have taken the Optimus dancer seriously.
The 2019 billions in capital raising (dilution which was of course flatly announced would never happen) was probably not hurt by the “million robotaxies by 2020” promise.
But he’s Teflon Elon. The fans and regulators (and fans) are now desensitized.
He could shoot somebody in the middle of Fifth Avenue with a space rocket and he’d still be untouchable.
But truth be told, decrying the success of Musk’s businesses, just sounds like “you protest too much”.
Not only did I not decry the success of his businesses, I lauded them.
But I dared to say something non-flattering about the messiah, which is heresy, so it’s not possible to look at the actual content of the post.
Result? ad hominem attack, inability to even see the issues…exactly as predicted.
I musk have really hit a nerve.
Jim
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Sounds like he might be presidential material…
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Watching Musk flail around like a bored toddler instead of focusing on running his businesses makes me so happy I found WB and CM.
-IWannaBesedate
I believe a capital “F” dropped off in your headline?
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Definitely…
looking at private air!
“Musk suggests that Tesla would be worth almost nothing if it doesn’t solve self-driving, which the CEO has been confident that the company would solve despite several missed timelines.”
https://electrek.co/2022/06/15/elon-musk-solving-self-drivin….
If what he said is true, it’s very risky to invest in Tesla. Many companies in the world are working on self-driving. I don’t know if Tesla holds any unavoidable patents about it.
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Light Reading editorial on Elon’s Twitter drama:
https://www.lightreading.com/big-tech/musk-reneges-on-$44b-t…?
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Many companies in the world are working on self-driving
Very true. Some Facts:
- The company with the first Level 3 automated self-drive system is Honda.
- The second is Mercedes.
- The company with the first cars being permitted in Germany for conditionally fully automated self-drive is Mercedes.
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The old “funding secured” announcement for stock manipulation
I made my one and only venture into Tesla based on the “funding secured” announcement. I would have made enough to buy one of their expensive cars had he not been lying. Ended up losing money instead since what I bought were stock options.
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Another great op-ed piece on Elon from Matt Levine of Bloomberg, a must read:
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For the spectators at home with popcorn, it’s worth learning about something called a “specific performance clause”, which the Twitter/Musk agreement has.
That is, the buyer can’t just decide they changed their mind, pay the $1bn breakup fee and walk away.
The seller has the right to force the deal to go through with it if the buyer is able to do so, which Mr Musk is.
The only way for the buyer to get out of the forced purchase is to strike a brand new agreement with the company which would presumably cost the buyer a whole lot more.
Twitter, the one with the specific performance clause, holds the cards on that one.
This would not apply in the case of the buyer citing a material adverse event, but that is something Delaware courts essentially never agree has happened.
He’ll claim it, he’ll hire a good lawyer to argue the case, and it won’t fly.
A surprisingly informative thread…especially for Twitter.
https://twitter.com/felixsalmon/status/1525481890643337216
Several people opined that they’ll split the difference and get the deal done at $40-45.
If so, it’s worth pointing out that that’s 20% to 35% upside from the market price right now.
The price is a little over $33 right now.
One might argue that that’s either too high (if the deal fails) or two low (if it goes through), but definitely not correct.
An ideal candidate for an options strangle, which I’m sure a lot of people are trying. (not me)
Unlimited upside if it soars, also huge if it tanks, capped downside if it stays flat or nearly so.
Jim
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Yes, James Stephenson is good. I’ve been following him for a while on Twitter as well.
He’s been somewhat overoptimistic in his projections in the past, but more recently is generally right on. People who like detailed business analysis must love his posts.
-IGU-
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mungofitch writes:
Not because he’s a bad engineer or entrepreneur, but because he breaks laws on such a regular basis: criminal, regulatory, civil, libel, you name it.
You support this canard with your “analysis” of the Twitter contract, which consists of a few accusations with no documentation. I’m going to guess you have no expertise in the field and are simply relying on the analysis of others.
At this point we don’t know all that much regarding what will happen with Musk and Twitter. We have a few SEC filings and a few tweets. We most certainly don’t know what is motivating the participants in this deal/negotiation/fiasco or whatever you want to call it.
Your concluding with “it seems he’ll swipe billions when it suits him” is just nonsense. Completely unsupported by anything. I’m guessing this comes from believing too many of the things you read. Me, I stick to SEC filings, court decisions, and the actual words of those involved. Which means I’m certain of very little.
As to “If the price of Twitter stock were $100 right now, and Twitter were trying to back out, you can bet your bottom dollar he’d be suing them to complete the deal.” I guess we’ll get to find out if something like that happens, but until then it’s just your imagination.
Meanwhile, wild accusations supported by nothing just make you look foolish. But I guess you’re playing to your home crowd here, who will happily rec anything you write, even complete nonsense like this.
-IGU-
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IGU, 14.May, another board: Of course Musk actually said that he’s “Still committed to acquisition” but I guess you think he’s lying.
Today: Me, I stick to SEC filings, court decisions, and the actual words of those involved.
Maybe you should not so easily believe in words? Maybe people actually do lie?
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mungofitch writes:
Not because he’s a bad engineer or entrepreneur, but because he breaks laws on such a regular basis: criminal, regulatory, civil, libel, you name it.
…
You support this canard with your “analysis” of the Twitter contract, which consists of a few
accusations with no documentation. I’m going to guess you have no expertise in the field and are
simply relying on the analysis of others.
Hey dude, I used to be in the venture capital business, for many years. Tech stocks.
I’ve done more than one tech buyout deal at over $100m, both as buyer and as seller.
(at the time, that was meaningful, though of course it’s chump change now).
Some were knock-em-down drag-em-out deals, with big things happening after signing and before closing.
So, hey, don’t bother to check whether I have “no expertise in the field and relying on the analysis of others”;
I’ve been there, and read much of the contract text that is available on this deal.
Can you say either?
I won’t assert that you don’t, because, unlike you, I don’t make accusations before I know the relevant details.
So, what’s the situation?
He’s breaking a contract he has signed up for. He is trying to reverse-engineer an excuse that might hold water.
My assessment is that as yet he hasn’t come up with one, but hey, he might yet.
It’s not a federal penitentiary kind of offence to flat-out violate a firm contract. I don’t claim otherwise.
But it’s dishonest and dishonourable. And incidentally, stupid: it can be exceedingly expensive.
I wouldn’t trust anything at all Mr Musk says, or signs, but of course that’s nothing new for anybody.
The real mystery is that Twitter’s management did.
My most interesting insight from the VC days: the bigger the deal, the more it runs on trust.
If you try to buy a chocolate bar, it’s cash on the barrel head, right now, or no chocolate.
If you sell a company for $200m, and closing day comes, everybody is “oh, we’ll get the final version of those contracts to you in the next few days”.
The reason it works is because if you screw people nobody will talk to you again.
[Though it’s terrible to overgeneralize, nobody ever does a VC deal with a Frenchman twice.]
Your concluding with “it seems he’ll swipe billions when it suits him” is just nonsense. Completely unsupported by anything.
I’m interested—how do you figure? Have you read any of the documentation or communications?
He clearly has buyer’s remorse. He wants to back out of a deal he committed to. Hey, it happens. I’ve been there.
The test of character (the subject of this section of the thread) is what you do next.
The stated reasons for trying to get out of the deal are plainly specious. (and in any case he waived due diligence–that has consequences, let me assure you, so even good excuses don’t generally count)
So, rather than honouring the contract, he’s flat out violating it, because it suits him.
Everybody knows all this–I’m not saying anything contentious.
It appears he thinks he can get away with it: he has a lot of power, and he’s gambling that it will
cheaper to live with the negotiated penalties than to do what he guaranteed in writing that he would do.
After all, he has never been called on his outrageous poop before, so why would he be now?
At this point, he figures it is cheaper to lie by going back on a deal than to be honest and follow it.
(and he’s probably right in that assessment: it probably will be cheaper for him)
Which of course deprives Twitter shareholders of many many billions of dollars: good for Mr Musk, bad for them.
So: it’s clear that he will break his word, break his contract, and deprive others of billions they are owed, because it suits him personally.
So, yes, “He is willing to swipe billions when it suits him”. Seems pretty cut and dried, no?
Is any of that really in dispute?
Whenever there is some hand wringing about what’s right or wrong to do in a business situation,
the clearest “Occam’s razor” test is one that I owe to the insight of my estimable spouse: “What does the contract say?”
That about covers it.
I have been in very, VERY serious board level arguments at public companies, arguing in favour of honouring a deal that was exceedingly bad for me and my side, because that’s what was agreed.
I remember more than once saying “He sc**wed us fair and square”. (usually a “he”)
Some people think that (say) pouring toxic waste into a river is good business because the fines are lower than the cost of doing it right in the first place.
I’m not one of those people.
Some people think that flat-out violating an agreed contract is cheaper than following it, because the negotiated fines, penalties, and settlements will be cheaper.
I’m not one of those people.
The question raised was not whether he was an accomplished mover and shaker, but whether he is deserving of contempt. Yes, without doubt.
Which is why he is held in contempt by so many observers outside his fan base.
It’s not sour grapes, it’s a sober assessment of his belief that he can break all the rules and stiff repeatedly others without consequences.
Sure, he’s absolutely right about that to date, he gets away with things. But it still deserves contempt.
You were pointedly silent on his most recent violation of securities laws on disclosure, I note.
I’m sure that someone on Youtube will come up with an excuse for that–I’ll wait. It’s the fault of Dominion Voting Systems?
Jim
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Meanwhile, wild accusations supported by nothing just make you look foolish
Hahaha… Wild accusations are just part of how one builds cult following. For every hero, you need a villain, many try to create one, some smart ones take an existing character and tweak them to make it a villain.
Just to be clear, I am not talking about Musk, he didn’t build his fan following by making wild, unsubstantiated claims.
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Elon Musk is obviously a brilliant engineer and a visionary designer.
He is also, with every fiber of his being, contemptuous of mortals and their laws. This is blindingly-plain to the meanest intelligence, which, interestingly, is often the turn his own takes.
Long story short, not every tool at Tesla is hanging on the rack.
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