…is almost never a good thing. Some people will defend Elon Musk and Tesla regardless of his actions, but the news reported in the last couple of days is disturbing to most. The SEC has charged Musk with fraud alleging that he issued false and misleading statements and failed to properly notify regulators of material company events. This charge stems from Musk’s tweet in August that he had secured funding to take Tesla private at $420/share.
Here is a statement from Stephanie Avakian, co-director of the SEC’s division of enforcement as reported in this article, “A chairman and CEO of a public company has important responsibilities to shareholders. Those responsibilities include the need to be scrupulous and careful about the truth and accuracy of statements made to the investing public, whether those statements are made in traditional forms such as a press release or an earnings call or through less formal methods such as Twitter or other social media…Neither celebrity status nor reputation as a technological innovator provide an exemption from the federal securities laws.”
Unlike the case of Preston Tucker’s car, which some claim was derailed by the Big Three for fear the car was much better than anything they were producing (a claim that doesn’t hold up to real scrutiny), no doubt this “attack” on Tesla is completely self-inflicted. The news that Musk rejected a settlement with the SEC that has been called by some “a slap on the wrist” is more self-inflicted damage. Commenting on CNBC, Jeffrey Sonnenfeld—a noted business professor at Yale University—said that Musk and his board made a great mistake in rejecting the proposed settlement. Sonnenfeld also said, “What it tells us is this board, as a strategic plan, must be using the Jim Jones Jonestown suicide pact. They are drinking the Kool-Aid of the founder. It is completely as self-destructive as Musk is.”
Some auto industry observers, most notably Bob Lutz, have opined that Tesla will cease to exist in its current form in the not too distant future. Perhaps that fate is one big step closer to taking place. Religious people will disagree, but I ardently believe that EVERY human being, past and present, is flawed. I think a significant problem today is that politics has turned into a show about cult of personality and is not about debates on policy. If I have offended some of you, then I have done my job. The right to never be offended or confronted with ideas that make one uncomfortable is not a right guaranteed in the Constitution.
From silodrome.com a picture of a Tucker automobile. The Tucker story is interesting and instead of watching the movie about Preston Tucker, if you are really interested you should probably read Preston Tucker and His Battle to Build the Car of Tomorrow by Steve Lehto. The AACA Museum in Hershey, Pennsylvania has a permanent Tucker exhibit that displays multiple Tucker automobiles as well as much information about Preston Tucker and the development of the car.