Tag: Elon Musk

All Elon Musk related articles are found here. Educative, informative and written clearly.

  • Tesla Bubble is Bringing New Short-Sellers

    Tesla Bubble is Bringing New Short-Sellers

    Tesla’s Bubble is Bringing New Short-Sellers
    Tesla stock rose an incredible 17% on Tuesday, but Morgan Stanley recommended selling Tesla for the first time since 2012.

    UPDATE 07/02/20:

    Yesterday 47 million shares of $TSLA traded at an average price of $750/share – equating to a nominal value of $35 billion. The last price was $748.96 on February 7.

    Tesla bubble is turning heavy bulls into short-sellers.
    The short-seller Andrew Left’s Citron Research tweeted: “even Elon would short the stock here if he was a fund manager.”

    Tesla’s (NASDAQ:TSLA) rally has seen the stock double in 2020 alone. The company’s market cap is over $160 billion. Great news to CEO Elon Musk and his bonus.

    The surge is getting headlines but what caused this change? Actually nothing. Tesla’s revenue growth dropped in the last quarter. The traders recognized it as a Tesla bubble and it isn’t surprising that a lot of them want to short it. 

    One is Citron Research as we mentioned.

    In a tweet posted on Tuesday, Citron Research said that they were shorting the stock again. Citron changed its mind after the recent run, despite their earlier statement that they would never do it again.

    On Thursday, even Morgan Stanley recommended selling Tesla for the first time since 2012. The bank downgraded Tesla to “underweight” from “equal-weight.” This new rating came at the time of a record rally for Tesla. Morgan Stanley also recognized rising downside risks. Shares of this electric-vehicle maker dropped 4% in early trading Thursday. It looks that traders who bet against Tesla’s victory are the ones who have to push the share price higher. What an irony! 

    Tesla bubble causes fears. How is that? Can you recall bitcoin’s surge back in 2017? Exactly. 

    The climbing for shares of Tesla provokes some investors to compare this jump to the bitcoin bubble. Tesla’s shares have grown 36% to a record price of around $887 in the last two sessions. This Silicon Valley favorite has jumped 180% during the last three months. Just to give you the right perspective,  on June 3 Tesla’s traded low at $178.97, on February 4, Tesla’s shares have gained almost 395%.

    And now Andrew Left said he’s betting Tesla will go back down. For the market winner 2020? Also, Michael Novogratz compared the surge in Tesla to bitcoin’s likewise parabolic progress.

    The gains have come too greatly, too wild

    The parabolic rally put shares up 21% Tuesday, after a 19% increase Monday. That put gains at over 100% for the past 12 months.  Bulls are clapping the record run, but short-sellers are also measuring in on what’s next for the electric car-maker. 

    But Citron Research doesn’t think the company is bankrupt, Andrew Left said Citron is shorting Tesla only because of the valuation.
    Citron Research tweeted more: “when the computers start driving the market, we believe even Elon would short the stock here if he was a fund manager. This is no longer about the technology, it has become the new Wall St casino.”

    Morgan Stanley downgraded shares of Tesla to “underweight” 

    Now it is the “sell” rating. Tesla gets this rating from Morgan Stanley for the first time after seven years. According to Bloomberg, in September 2012 Morgan Stanley gave a selling rating to Tesla. This one came after a record rally and amid optimism about Tesla’s China factory. The bank saw the problem in “sentiment around the stock” that is “admittedly very strong, but we ultimately question the sustainability of the momentum.” 

    Morgan Stanley also lowered the valuation for the company’s mobility unit and increased the expectations for the core auto business. That resulted in a higher target price. 

    Why Tesla Bubble?

    Tesla’s current valuation is more downside risk for the stock than upside. Even the company’s increased price target from $250 to $360 indicates a 30% downside from the last trade price on Wednesday.

    Also, the optimism around the China factory had a great influence on Tesla’s stock. The problem is that the risks are not entirely recognized.

    Adam Jonas of Morgan Stanley in his Thursday note wrote that investors “continue to harbor concerns whether an auto business commercializing advanced, dual-purpose technology in economically sensitive industries could be a long-term winner in the Chinese market.” 

    Tesla has entered into the bubble-zone, everyone is following what’s going on with it, even the people who are out of the stock market are reading news about Tesla’s stock price. And cheering. The surge was too fast, too far. That’s why it looks like a bubble. Who is surprised by short-sellers’ appearance now?

    What is a bubble?

    A bubble is when the fast rise of asset prices is followed by a shortening. It is generated by a surge in asset prices and driven by an enthusiastic market reaction. When fewer and fewer investors want to buy at a high price, a massive sell-off happens. That causes the bubble to decrease. After the new Morgan Stanley’s gave Tesla shares a “sell” rating it is quite possible the stock price will fall quickly. That is the situation with Tesla stock. The share value grows beyond asset value. So,  investors withdraw their money faster in fear that supply will exceed the demand. That could cause the share price to drop.

    Tesla’s 2020 rally has been strong. The stock was all the time very high and reached new all-time highs each week. But on Tuesday investors assumed that holes may arise whenTesla fell by over $100 just 15 minutes before the closing bell. This drop was followed by a large volume, implying that it wasn’t quite a healthy correction. Yes, TSLA finished the day up 17%, but the mini-drop was visible. It looks like the air is coming out of the bubble. 

    Bottom line

    Everyone should be skeptical when such a massive run in stock in a short time with very few visible reasons, appears. If we have in mind the recent rise of retail ownerships, we must consider that the further drops for Tesla stock are near. 

    Citron’s current change on Tesla stock can be accurate as the last one was. As an illustration, according to Bloomberg, Tesla overtook Apple as the most shorted US stock and analysts have bearish ratings on the asset. Everyone is predicting TSLA short squeeze. That can be right but on the other hand, it is more likely this stock price will decline slowly. Increasing short selling is more possible than a sharp fall. One of the analysts, Ihor Dusaniwsky said: “This is due to the amount of short hedging that is being done to offset Tesla convertible bond and options exposure.” 

    Before Tuesday’s rally, Tesla short-sellers had taken a $2.89 billion loss last year and a loss of $8.31 billion from the beginning of 2020. 

    Tesla shares were trading 12.73% higher at $879.30 on Tuesday.

    By the way, analysts that cover Tesla, predict the average price target is $506, which is around 35% below the closing price on Monday.

    But who can predict the market’s movement or what Elon Musks’ next move?

  • The Boys Are Not All Right

    The Boys Are Not All Right

    3 min read

    The Silicon Valley Mentality of Boys

    History of the Silicon Valley goes as far back to ancient 1951 when the dean of the School of Engineering at Stanford, Frederick Terman, has spearheaded the creation of the Stanford Industrial Park. Place where Stanford University was leasing the office space to nascent high-tech companies. Hewlett-Packard, General Electric, Eastman Kodak, and Lockheed were some of the very first tenants.

    It was also a place where the silicon transistor was born, integrated circuits, MOSFET, the concept of the Intergalactic Computer Network, video games, and many other things without which we couldn’t imagine the modern life. Once it was a hotbed of innovation, the forefront of technological progress, today it is a shadow of its former self. 

    Silicon Valley today is more of a state of mind

    Though the southern part of the San Francisco Bay still exists, and towns like Palo Alto, Cupertino, Menlo Park, Mountain View, Sunnyvale, and others of the Santa Clara County; Silicon Valley today is more of a state of mind than a physical place.

    Back in the day, it was inhabited by people who had extraordinary talent and knowledge of everything techy and sciency, the geeks. Today, by know-it-all Bros who will from time to time get some very bright ideas. 

    For example to make a steel one person cigar-shaped submarine for rescuing people trapped in an underwater cave. And to pretend that it can swing around the bend in a submerged tunnel, where a U shaped bend is roughly twice the circumference of the submarine. And when subjected to the public criticism of such an “ingenious” piece of engineering, the Silicon Valley mentality demands that one hurls the most abhorrent insults at one’s critics. After all the Bro knows it all, he’s a software engineer.

    We come to Elon Musk

    And yes, Elon Musk is a prime example of everything that is wrong about the Silicon Valley mentality. That, born in the primordial soup of buzzwords and overhyped software applications, arrogant attitude that any problem in the world could be solved by a software engineer.

    But reality has a nasty habit of rearing its ugly face. Especially when software engineers try to solve hardware problems. 

    For example Tesla Model 3’s rear wheel arches.

    The Silicon Valley Mentality of Boys

    According to Sandy Munro of Munro and Associates, a manufacturing analyst company with analyzing more than 400 models of various manufacturers under their belt, they are made out of 9 separate parts which are welded, glued or riveted to each other. Other car manufacturers make this body part out of a single piece of sheet metal.

    Also, Model 3 features some of the body sub-assemblies which are made out of parts joined together in several ways, welding, glueing, riveting or bolting. Sometimes using all four of them. Something which is utterly foreign to other car manufacturers, who prefer to use one joining technique throughout the sub-assemblies as such a solution keeps manufacturing costs as low as possible. Overall, Mr. Munro has suggested 227 practices which are standard for car manufacturing, and which would lower production costs of Model 3 by at least $2,000. “This body is their single biggest problem. It’s killing them.” Those are the words of manufacturing analyst, Sandy Munro.

    But, why is it so? 

    By all appearances because Tesla has a corporate mentality characteristic for Silicon Valley. From what an observer can deduce, they prefer to hire software engineers over car engineers. While in the past five years many big engineering names from the likes of Ferrari, Mercedes, BMW, Peugeot… were poached by their competitors, none of them was snatched by Tesla.

    By all appearances, Tesla is throwing software engineers at car manufacturing problems. And those boys lack the old school knowledge of car engineering and production. But they have a quite ample attitude. For example, about their Autopilot system. On the official webpage, it is described quite dubiously capable, even though featuring a warning that the Autopilot features “do not make the vehicle autonomous”.

    Fake it till you make it

    The system is touted as having 40x computing power of the previous system, features the Autosteer+, it is twice this and thrice that, and all “new Tesla cars have the hardware needed in the future for full self-driving in almost all circumstances”. And that is the lingo of Silicon Valley mentality, overstate everything no matter what, and curb the confusing and often misleading language just enough to satisfy the regulators. Convince the potential customers that your widget is the life-changing experience, without which their lives have no meaning.

    The Silicon Valley Mentality of Boys.

    Disruptiveness, insurgent, start-up, “fake it till you make” it are the epitomes of it. It’s a place where everyone can be miserable. Where working “9 to 5” means from 9 am to 5 am. Place where every CEO is the man who will fundamentally change our world and way of life with his “disruptive app”.

  • Tesla shares drop but it could a 50% grow within a month

    Tesla shares drop but it could a 50% grow within a month

    3 min read

    Tesla shares were higher 2%, floating around the $200 mark on Thursday.

    The day before, Tesla CEO Elon Musk had sent an email to employees, saying that Tesla could gain a new delivery record and had above 50,000 net new orders for the next quarter.

    “Based on current trends, we have a good chance of exceeding the record 90,700 deliveries of Q4 last year and making this the highest deliveries/sales quarter in Tesla history!” Musk wrote in the mentioned email.

    Tesla last report for the first-quarter was disappointing for Wall Street.

    The company missed Wall Street expectations.

    And the worries about Tesla short term arose immediately.

    Tesla last month announced first-quarter deliveries missed Wall Street expectations. The worries about the company’s short term bloomed.

    The consequence was, some Wall Street experts have decreased their expectations for the company.

    They expressed their concern, frequently focusing on sale worries and liquidity. The negative criticism arose.

    Tesla shares have dropped 30% in the past 12 months and 42% this year.

    The big turn over of Tesla’s shares

    Shares of the electric-car maker drop at $190. It is for the first time in two years.

    Tesla shares grew but it could a 50% drop within a monthImage source: Yahoo Finance

    The company got thrashed by a range of negative analyst predictions.

    Also, Elon Musk warned the stuff the “hardcore” cost cuts are necessary because the company would be out of cash in 10 months if not doing so.

    For analysts, the bad sign was recently price cut on its cars. The demand is lower and there are so many reasons for experts concerns.

    But still, some of the analysts claim that Wall Street is “misunderstanding the Tesla story”.

    Musk’s successes are internationally recognized. Also, it isn’t a secret that he put himself and Tesla into trouble. All because of a tweet on August where Musk claimed there is a possibility to the company to be taken private with “funding secured”. That caused problems with the government.

    According to Yahoo Finance, an analyst for a firm “with a major investment in Tesla said Friday that recent drastic price-target cuts on the stock by others on Wall Street are missing the big picture.”

    That firm is Ark Invest. Last year its founder forecasted on CNBC that Tesla could score $4,000 per share. They still stand by that call, even now when Tesla’s stock lost almost 40% of its value.

    To buy or to sell Tesla shares?

    Tasha Keeney, Ark analyst, stated Ark hold so firmly in Tesla that its five-year, bear-case scenario is $560 per share.

    That would be almost triple the value of the price where the stock closed, at $195.

    Also, the fact is the company raised $2.7 billion. The first quarter was finished with $2.2 billion in cash.

    So, bankruptcy appears very doubtful. Almost impossible. The opinion that Tesla will easily run out of money in the next period and close its complete business looks a bit absurd.

    The company could raise more capital as Musk already showed they are able to do so.

    Also, they could change its business model and sell battery packs to some other carmakers. Or something else, Elon Musk is able to do very unexpectable things to maintain Tesla and exits as a winner.

    Tesla could also sell more stock and convertible debt. The last has a lower interest rate than regular loans. Tesla recently raised a convertible debt with an interest rate of 2%. So, who says they cannot do it again?

    Tesla is a global leader in two businesses: cars and renewable energy.

    Tesla has a really great opportunity in the sector of electric cars. Especially in China, for example.  

    Its stock could easily produce a return of more than 100% in the future.

    Okay, there was some disturbing situation with their autopilot when one man was killed in a traffic accident while using autopilot. He simply and sadly hit the truck. But the company announced that their new cars have the hardware for full self-driving abilities and the software is ready.

    Tesla can meet its near-term production goals, that is for sure. It can manage the cash crisis. So it is more realistic to expect it will have a good future. This brand is not going to easily disappear.

    Yes, its CEO Elon Musk can be questionable but at the same time, no one can say he isn’t a very capable man. Controversial but capable.

    So, Tesla stock can be attractive for risk-tolerant investors.

    risk disclosure

  • Tesla’s stock hit a new 52-week low

    Tesla’s stock hit a new 52-week low

    2 min read

    Tesla's stock hit a new 52-week low 1

    Tesla’s stock has fallen another 6% yesterday. It is now down 40% in comparison with last year, according to CCN.

    Tesla’s stock is falling more and more every day and Wall Street predicts a total disaster.

    Tesla's stock hit a new 52-week lowImage source: Yahoo Finance

    At the same time, Tesla’s car price is falling down too.  

    The company announced that it is going to lower prices on older model S and X cars. Merrill Lynch announced that selling on those models is lower than ever.

    Critics have the opinion that Tesla’s stock has always been a bet for naive traders.

    Morgan Stanley reduced its lowest-case scenario price target to $10:

    “Our revised bear case assumes Tesla misses our current Chinese volume forecast by roughly half to account for the highly volatile trade situation in the region, particularly around areas of technology, which we believe run a high and increasing risk of government/regulatory attention.”

    The Tesla golden era is likely over

    Tesla’s stock had confronted pressure for a long time. It had problems with the installations of its car. It had delays and deficits of components. But Tesla and Elon Musk somehow managed to cover all of these problems.

    The company had to report a huge loss of $702 million in the first quarter this year, just a few weeks ago. The consequences were they had to draw extra funding. This loss was caused by a decrease of 30% in selling cars.

    Also, their tax credit of $7,500 was cut in half meaning the government subsidies are lower. That’s really the bad position for the company and Elon Musk itself.

    Tesla rivals are more powerful than ever

    For example, BMW progress the development of their own electric cars.

    Tesla shares continued the slump falling 6% to close at $192,73.

    Citigroup analyst Itay Michaeli lowered the price target on the clean-energy carmaker’s plans by nearly 20% to $191 per share.

    Michaeli stated the company’s recent capital growth of $2.7 billion provides the balance sheet defense against a 2019 downturn.

    “The recent capital raise was a positive step but won’t necessarily get the balance sheet out of the woods if Tesla cannot achieve FCF targets,” Michaeli formulated.

    But, at the same time, he said the company has to solve its serious cash spending rate.

    Tesla and Elon Musk tried to guarantee the investors their investments are safe. They claimed the company developed a new driving automation system and self-driving vehicles which should increase the safety. Obviously, the investors have no trust as the consumers don’t have.

    Tesla’s claims are not supported by the data, they look more just hollow promises.

    Musk tries to avoid criticism and keep a good status, it is obvious.

    But it looks the Teflon chief position doesn’t belong to him anymore since his reputation likely not stays intact.

    Moreover, he and Tesla seem will have more problems in the future.

    With competition and investors both.

    Elon Musk was putting all of Tesla’s difficulties under the rug.

    Declarations on how Tesla should be prized as a tech stock and not as a business with unlimited problems fall into the water.

    Banks warned to a Tesla’s disaster

    Bank of America Merrill Lynch and Citi analysts each declared critical statements evaluating the stock’s recent pull-backs by investors. They both concluded it is a sign that should concern.

    Their analysis is based on intense selling pressure, with shares falling 16% during the past week.

    And also, there is a leaked email from Elon Musk that refers to employee expenses.

    All of this was very important for BAML and Citi.

    “With fundamentals deteriorating, specifically deliveries/production that are starting to stall as well as losses/cash burn that are not turning a corner on a sustainable basis, some of these optimists now appear to be taking a much more pessimistic stance, with the stock breaking down in recent days,” BAML analysts headed by John Murphy addressed to clients on Wednesday.

    The analysts told the current tension on the stock seems to be inspired by “shorts pressing aggressively, as the stock (and story, to some extent) was already breaking down.”

    risk disclosure

  • New Elon Musk’s AI Fake Text Generator is Too Dangerous to Release

    New Elon Musk’s AI Fake Text Generator is Too Dangerous to Release

    2 min read

    New Elon Musk’s AI Fake Text Generator is Too Dangerous to Release
    We are all aware of the problem of fake news online, and not only online.  

    Elon Musk-backed AI Company claims it made a Text Generator that’s too dangerous to release.

    What is it all about?

    The OpenAI has developed an AI system that can create such impressive fake news content. But the group is too afraid to release it publicly. Their fears are referring to misuse.

    They’re letting researchers see a small part of their work.

    So we cannot say they are hiding it completely. But, the group’s fear here is very weird.

    The developers used 40GB of data pulled from 8 million web pages to train the GPT-2 software. That’s ten times the amount of data they used for the first of GPT.

    This time they trailed dataset together by trolling through Reddit. And they were selecting links to articles that had more than three upvotes. When the training process was complete, they found that the software needs a small amount of text to continue writing.

    The software has trouble with “highly technical or esoteric types of content”. But when it comes to a more conversational type of writing it generated “reasonable samples” 50 percent of the time.

    “Our model, called GPT-2, was trained simply to predict the next word in 40GB of Internet text,” writes a new OpenAI blog. “Due to our concerns about malicious applications of the technology, we are not releasing the trained model. As an experiment in responsible disclosure, we are instead releasing a much smaller model for researchers to experiment with, as well as a technical paper.”

    AI is good but risking

    OpenAI, a nonprofit research company backed by Elon Musk, Reid Hoffman, Sam Altman, and others, says its new AI model, called GPT2 is so good and the risk of malicious use so high. That’s why they are breaking from its normal practice of releasing full research to the public. Instead, they will allow more time to discuss the ramifications of this technological discovery.

    How does it work? Here is one example.

    The software was supplied this paragraph:

    ”In a shocking finding, scientist discovered a herd of unicorns living in a remote, previously unexplored valley, in the Andes Mountains. Even more surprising to the researchers was the fact that the unicorns spoke perfect English.”

    Based on two sentences, it was able to continue writing a news story for another nine paragraphs in a fashion that could have seemingly been written by a human being.

    Here are the next few sentences that were produced by the machine:

    ”The scientist named the population, after their distinctive horn, Ovid’s Unicorn. These four-horned, silver-white unicorns were previously unknown to science.

    Now, after almost two centuries, the mystery of what sparked this odd phenomenon is finally solved.

    Dr. Jorge Pérez, an evolutionary biologist from the University of La Paz, and several companions were exploring the Andes Mountains when they found a small valley, with no other animals or humans. Pérez noticed that the valley had what appeared to be a natural fountain, surrounded by two peaks of rock and silver snow.”

    The Guardian was able to take the software for a test and tried out the first line of George Orwell’s Nineteen Eighty-Four: “It was a bright cold day in April, and the clocks were striking thirteen.”

    The AI program selected among the tone of the choices and proceeded with own dystopian science fiction:

    ”I was in my car on my way to a new job in Seattle. I put the gas in, put the key in, and then I let it run. I just imagined what the day would be like. A hundred years from now. In 2045, I was a teacher in some school in a poor part of rural China. I started with Chinese history and history of science.”

    What a story!!!

    Can you imagine what such a system could do, for example, with president candidate biography?

    The assumptions of this are why OpenAI says it’s only releasing publicly a very small portion of the GPT-2 sampling code.
    It’s not releasing any of the dataset, training code, or “GPT-2 model weights.”

    The OpenAI blog announces this:

    “We are aware that some researchers have the technical capacity to reproduce and open source of our results. We believe our release strategy limits the initial set of organizations who may choose to do this, and gives the AI community more time to have a discussion about the implications of such systems.”

    Fake news is the obvious potential downsides. The AI’s is unfiltered nature. It is trained on the internet, so it is not hard to inspire it to generate biased text, conspiracy theories and so on.

    “We need to perform experimentation to find out what they can and can’t do,” said Jack Clark, the nonprofit company’s head of policy. “If you can’t anticipate all the abilities of a model, you have to prod it to see what it can do. There are many more people than us who are better at thinking what it can do maliciously.”

    Yes, keep this AI away from using a bit more time, please.

    The bottom line

    AI, Artificial intelligence can be extremely useful for everyday life to the implementation in the stock market. A lot of modern tools we are using every day have some part of AI. It is a high-tech’s geeks dream to implement AI everywhere. But it isn’t possible. Something has to be done by humans.

     risk disclosure

  • Elon Musk made a deal with SEC: pay $20 million and quit as Tesla chairman

    Elon Musk made a deal with SEC: pay $20 million and quit as Tesla chairman

    2 min read

    Elon Musk made a deal with SEC: He will pay $20 million and quit as Tesla chairman

    Elon Musk agreed Saturday to quite as Tesla’s chairman of board and pay a $20 million fine in a deal to settle charges brought this week by the US Securities and Exchange Commission, alleging fraud and making “false and misleading statements” when he tweeted claims of having secured the funding for taking the company private at the share price inspired by marijuana culture.

    This settlement requires court approval, and the main point of agreement is that Elon Musk will be allowed to stay as CEO but must leave his position as chairman of the board within 45 days. He is unable to be reelected for three years, according to court filings. Elon Musk accepted the deal with the SEC “without admitting or denying the allegations of the complaint,” according to a court document.

    Who has to clean after Musk?

    Also, Tesla agreed on Saturday to pay $20 million to settle claims it failed to clean up after Musk’s tweet. According to some sources, terms of this settlement are less favorable for Musk and Tesla than the SEC’s initial offer of a nominal fee and 2 years ban on acting as a chairman of the board.

    “The $40 million in penalties will be distributed to harmed investors under a court-approved process,” the SEC said in a press release.

    The company also agreed to nominate two new independent directors to its board. And establish a board committee to oversee Musk’s communications.

    A Tesla’s spokesperson confirmed Musk will be permitted to remain a member of the board.

    SEC Chairman Jay Clayton said in a statement that “the prompt resolution of this matter on the agreed terms is in the best interests of our markets and our investors, including the shareholders of Tesla.”

    Following news that the SEC had filed the suit, Tesla’s market share dropped by about $7 billion to $45.2 billion by Friday. But the agreement which allowed for Musk to remain CEO may have prevented even more disastrous consequences.

    Ivan Feinseth of Tigress Financial Partners described the agreement as a “slap on the wrist” for Musk. He added that “the fact that he can remain CEO is very important for the company.”

    This announcement from the SEC came two days after the agency filed a lawsuit against Musk, contending he defrauded investors. The decision is based on tweets Musk sent on August 7. In that tweet, he claimed that he has had secured fundings to take Tesla private at $420 a share. That has caused the company’s stock to soar. He had not secured the funding and knowingly made false statements, alleges the SEC.

    The lawsuit asked for banning Musk from serving as an officer or director of any publicly traded company.
    But Elon Musk told Tesla’s staff, to “ignore the distractions”, and hinted at being profitable.

    He also called the SEC’s suit “unjustified.”

    He assured staff that the company was close to “proving naysayers wrong.”

    With Sunday being the end of the quarter, Musk said that Tesla must go “all out” on production. In order to “achieve a victory beyond all expectations.”

    Last few weeks problems culminated for Tesla, and now the company is expected to report third-quarter production numbers this week.

    The Electrek reported that Tesla has already broken its record ahead of the third quarter’s close. They wanted to suggest it would exceed production projection of 50,000-55,000 of Model 3. Tesla has already met an ambitious benchmark for its Model 3. After setting a new quarterly production record in the second quarter. 

    UPDATE 23th May 2019: Tesla’s stock hit a new 52-week low

    The investors on Monday will also review Tesla’s settlement with the SEC.  

    Once again, this agreement is not official; a court must approve it. Reports from Reuters on Friday marked that Musk “could settle with the SEC but was ready for a court fight.”

    That means the situation did turn out differently.

    The question is whether Musk’s companions on the board decide to bring in a really strong chair. The one who will stand up to Mus

    Jay Dubow, a partner at Pepper Hamilton and a veteran of the SEC’s enforcement division, says it is “unusual” that the SEC gave agreement to let Musk stay on as chief executive but exit the chairman role.   

    Dubow said:

    “The CEO is certainly more involved than the chairman in day-to-day operations.” SEC may have determined that removing Musk as CEO would cause more harm to Tesla’s share price, and thus harm investors.

    “I have always taken action in the best interests of truth, transparency, and investors,” Musk said. “Integrity is the most important value in my life and the facts will show I never compromised this in any way.”

    It’s still unclear whether or not the Department of Justice will file criminal charges against Musk.

    Tesla confirmed earlier this month that the Department of Justice was investigating whether Musk’s comments about taking his company private constituted criminal activity.

    No matter what the outcome of the DoJ inquiry be, Elon Musk, for now, will stay on as Tesla’s CEO and its public face which equally causes controversies and reassures investors in the bright future of the business.

    Risk Disclosure (read carefully!)

  • Is Elon Musk In Trouble?

    Is Elon Musk In Trouble?

    1 min read

    Elon Musk Trouble Must?

    Short of it would be that Elon Musk is in trouble. Long, that he’s really really in trouble.

    It all started on August 7th when he tweeted that he is considering taking Tesla company private at $420 per share buyout and that he has secured the funding needed to do so. From there the things just snowballed. First, the price of Tesla stocks sharply raised to $379 from $341, then short-sellers started voicing their concern that Musk has attempted to manipulate the price of stocks of his company in an effort to hurt them financially and the USA Security and Exchange Commission has started an inquiry into his tweets.

    Elon Musk Trouble Must? 4

    Elon Musk – The naughty guy in the world of white collars

    But the Musk’s troubles do not end here. In a bit longer Instagram story, of which post is now deleted, rapper Azealia Banks claimed that she witnessed over the weekend after 7th August, while visiting her Canadian colleague and Musk’s girlfriend Grimes, entrepreneur’s meltdown and him being scolded by Grimes for tweeting about the buyout while under the influence of LSD. That tale continued with a bizarre string of posts made by Banks in which she demands from Musk to return her phone so she could retrieve her “quality nudes” and go home. A phone which allegedly Musk’s lawyer blackmailed her and paid off her lawyer into handing over to “delete evidence”.

    Elon Musk Trouble Must? 3

    The tweet is a trick?

    Elon Musk is known for taunting short-sellers on Twitter, and many of them observe the situation with that knowledge in mind. In the light of that fact they are seeing the tweet about taking Tesla private, and some have decided to file a class action suit against Musk as they see this tweet as a securities fraud. Such also may be the conclusion of the SEC investigation, but with the regulators being customarily tight-lipped about their investigations we may wait up to a couple of years before finding out whether they will take any legal actions against Musk or not. For now, the only thing which can be concluded about it is that SEC is under great public pressure to take legal action against Musk.

     

    Elon Musk Trouble Must? 1
    Whole this time Musk did not sit idle. He has already given a lengthy interview to the New York Times defending his actions. Going as far as to claim that he just added customarily 20% premium on top of the then current price and that he just rounded it up and came up with $420 per share. And that it has nothing to do with marihuana and drugs sub-culture iconography. He self-effacingly lambasted own over-reliance of automatization of production as the reason for not meeting the production goals. Also in recent days, there was a deluge of articles and op-eds written in big financial media glorifying Musk’s work ethics and lamenting about his pains of having to work on his own birthday. Alas, Musk might be an entrepreneurial genius but the math is not his stronger suit as 120% of $341 is not $419 as he claims.

    What will happen with Elon Musk and Tesla we will find out in the future, for now, one can only see this tale as a cautionary one.

    Kids do not do drugs, and if you do them do not mix them with social networks.

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