There's a pretty good case that they were trying to do this to Tesla. We heard all these claims about how nobody was really buying their cars and so on, which turned out to be bullocks, but were being made at a time when they were in a precarious financing situation.
But the general problem with asking for examples is that nobody has the inside information necessary to verify them. I can point to any company that went bankrupt following negative media coverage at the behest of short sellers, but how is anybody supposed to prove whether or not they would have survived in the alternative?
> Judging by many of these comments, I'm not sure some people here understand the mechanics of how selling shares short actually works. It does not, defacto, destroy any value in the company.
Are you sure you know how short selling works? Short sellers borrow shares in the company and then sell them, which temporarily increases the supply of shares on the market and suppresses the price. If the company at that point issues new shares or wants to borrow money against the value of their stock, it costs them money, i.e. reduces access to capital or requires them to pay higher interest rates, which negatively impacts the business.
And that's just the result of the actual short selling, not including the reputational harm caused by false allegations (or over-hyped technically true allegations), which can reduce demand from not only investors but the business's customers.
> Except he actually did consider it and negotiated with investors. How is it fraught when you investigate a business opportunity?
Even if what said was 'truthful', he would have filed is intentions with the SEC to begin with but didn't. Actions speak louder than words and he still hasn't done anything to take Tesla private after paying for the charges.
> So many salty shorts itt.
Shorted what? Yeah I shorted NKLA [0], and told everyone to do so in the open and laughed all the way to the bank.
No, nor have I reported Deepak Chopra or Amway or Gwyneth Paltrow. There are blatant scams all around us. A lack of interest from the feds doesn't mean much.
Besides, the SEC has enough on their plate when it comes to Tesla.
>So it does say what he thinks it says.
Doctor Oz is, by all accounts, a brilliant surgeon. Would you follow the medical advice on his show?
Then you are financially motivated to spew lies. Short sellers are probably the scummiest people on the planet, that will do anything to make a quick buck.
> What part of "I have secured funding for taking Tesla private" was accurate and honest?
We don't know. He might have chosen to not disclose his discussions with other people.
> If he had not secured funding, how was his statement not deceptive?
He might have meant it in earnest. For fraud, surely he must have had the intention to profit from it personally at the expense of shareholders?
> And if you sold shares based on his statement,
Who would have done that and with what reasoning? Why would you sell for a lower price if you believed you'd get $420 very soon? That's a silly notion.
> a fraudulent pyramid scheme
A pyramid scheme is by definition a system where most (i.e. the last) investors get screwed, i.e. they don't make a profit.
Didn't realize they were planning to pay that out to investors, thanks for the correction.
The short-sellers also lost money due to Musk's fraud, though admittedly that's a small fraction of volume.
To get an estimate of the damage done, the price went up by ~$40 share, with ~30 million shares traded. Let's assume the average buyer bought at the midpoint, so they lost $20/share. That's still $600 million transferred from people who believed Musk to people who doubted him – 15 times larger than the total fine to Musk + Tesla.
>I wonder if they will be able to demonstrate that any damage was actually done.
This case is unique in that both shorts and longs were harmed. Plenty to go around. How many people bought shares at ~$350 assuming they'd be private at $420 because the CEO said so?
>It sounds like "the banks," who would be in an even more privileged position to know if the $420 offer was legitimately secured
Speculation. What's not speculation however is that the company suffered material harm as a byproduct of malicious prosecution.
If I, as a government employee, open a public investigation into someone whom I know to be innocent and cause that entity harm I have incurred liability. The SEC knew Elon had the funding, they used weasel words to imply he did not. The SEC would have lost in court. _All_ contracts have contingencies, this was no different. Saying that because a contingency existed the funds were "not secure" is horsecrap.
> Let's look further at this short selling behavior as it scales.
I'm not talking about general short selling. I'm talking about this specific case.
He discovered the company was a fraud, shorted the stock, and then exposed it. That stock had to be sold, to someone else, for the short to be profitable. This means he knowingly participated in the scam.
>He had a ton of stock options that he either had to exercise, or he would loose.
That's completely irrelevant.
Purchasing stock options for pennies on the dollar and selling billions of dollars worth of stock when you know the company is recalling 500k vehicles in the next few days are two totally different things.
And oh... he's also done selling now.
If this is not prosecuted by the SEC I would be very surprised.
Will the SEC arrest him? Ban him from being a Director of a public company?
I keep hearing about him 'getting in big trouble'. But I don't get it.
Don't get me wrong, I'm sure it is upsetting for him to possibly be forced to pay millions in fines and maybe even be kick off one of his projects.
But that isn't a very big downside, and half of it isn't even from the SEC.
I mean, there seems to be a pattern when it comes to the misbehavior of the ultra powerful:
The upside to his action has the potential in the billions, while the potential IF caught is generally going to be a fine worth millions.
He may have snubbed his board badly enough that they make him pay for this incident by removing his control of the project, but that is a separate matter.
I feel whenever someone powerful is going to be punished the media goes crazy over every detail of the noodle that is going to be used as a whip.
>MAYBE you can feel some emotion for the investors whose money was essentially stolen, by a scam artist?
Please explain what the scam was, and how money was forcefully or fraudulent taken from the investors. Was the scam the public knowledge of a CEO using private jets to smoke weed and vacation with company money and speaking in cultish phrases? Was it the lack of cash flow? Was it the obvious lack of any moat?
> I literally take the money and run, it what happens?
That can happen regardless, there are many scammers who did this with or without shorting. Shorting is not required to keep things in check, that's the job of law enforcement.
Taking a step back it's really quite simple. Shorting is literally a bet that provides no value other than that some people will profit at the misery of others. This is unethical and immoral. Furthermore, done at a large enough scale, it will cause harm to specific companies or firms. You bring up scammers that will take the money and run, yet don't discuss what happened with GME where the shorters piled on it like sharks to drive it down, it's literally a scam in the opposite direction. We shouldn't fix one wrong with another.
>Can the VC be implicated for financing distribution of controlled substances ? There could be enough grounds for Banks to terminating their relationship with Bailey Capital et al.
Yes, and yes.
>Why would a venture capital firm expose themselves to this, when its not even legal in half of the country?
That was shorting. That is LEGAL.
> How is this different from all the FUD Tesla has gotten over the years?
Tesla was specifically investigated by the SEC when it tried to push short sellers out - and they paid an undisclosed fine for that ILLEGAL activity.
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