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Staying Public

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155 pointssimonsarris102 comments

Musk still has an "only I can do it" mindset. The guy is working himself too hard, not getting enough sleep, and making bad decisions. As CEO, he should not be trying to fix an assembly line. His job is to build a team to do that, give them enough authority to do the job, get out of their way, and check up on them occasionally.

Here's Tesla's top management, according to Tesla.[1] There's Musk. There's a chief financial officer. And there's a chief technical officer who's a battery electric powertrain expert. Where's the chief operating officer?

There's a VP for manufacturing, Gilbert Passim. But check out his Linkedin page.[2] He's listed as running Tesla's various operations other than direct vehicle production. When he was hired by Tesla in 2010, he was relocated from Pleasanton to southern California. There must be a plant manager and a head of manufacturing engineering, but they seem to be far enough down that they have zero Google visibility.

It looks like Musk set this up so that there's him, and then there's a bunch of people who report to him, none of whom has full authority over manufacturing. It's not working.

[1] http://ir.tesla.com/corporate-governance/management [2] https://www.linkedin.com/in/gilbert-passin-74a36117

But it seems to be working, right? Tesla has been hitting their goals, and the stock price has been going up.

Musk's bizarre behavior is concerning, but his organization structure seemed to be working.

Sorry but Tesla is not meeting its targets. It has a phenomenal reputation for missing targets repeatedly and finally hitting them in a 'kind of' style. The 5000 is the obvious example - they missed the target by almost a year, had to build a separate outdoor production line (which means the numbers are no longer reflective of their production line) and it turns out their first pass rate was something like 14%.

Tesla is not bankrupt, and it's producing some cars. Its stock price is high. If those are the only criteria you have for success then fine. But they're not successful on the terms that they themselves set.

They have bit been "hitting" their goals. They hit a goal once. Assuming you're talking about their production target for the model 3, which has been reported to have a very high rate (Compared to industry standards) of reworking.

"Tesla has been hitting their goals"

My impression from reading HN articles over the last couple years has been the exact opposite, the Model 3 being the prime example of that.

Yeah, plenty of people on HN love to repeat that. Check out how Tesla has been doing with their most recent Model 3 production target, which was announced at the end of 2017:

https://www.bloomberg.com/graphics/2018-tesla-tracker/

Here we are, 8 months later, how would you say they are doing?

Key point there is "most recent production target". Tesla has been constantly revising its production targets as it fails to achieve prior targets.

For example, in 2016 [1] Tesla set a target of 100,000 Model 3s produced in 2017 and 400,000 in 2018. End of 2018 is getting close, and Tesla's at less than 30% of the 2017 target, let alone 2018.

After that particular failure to achieve production goals, the stated goal for Q3 2017 was revised to 1,500 new cars built [2]. Tesla built 237 instead.

In other words: yeah, Tesla might look like it's "on target" now, but only because it shifted the goalposts after having been very much off target for more than a year now. There are hundreds of thousands of customers still waiting for their cars because of how thoroughly Tesla missed its original production goals.

Tesla's on the right track now, but only after a very rocky road getting there.

[1]: https://www.reuters.com/article/us-tesla-suppliers-idUSKCN0Y...

[2]: https://www.bloomberg.com/news/articles/2017-10-02/tesla-sal...

> Musk still has an "only I can do it" mindset.

That seems to be his mission and it's pretty clear he is willing to do what it takes to accomplish it and the board and supporters know it. I have to disagree that "it's not working", unless you want to ignore all the accomplishments by Tesla.

It's funny how everybody and their dogs are now experts and think they know better than Musk how he should be doing things. I wish more of these people actually started car companies so perhaps we (US market) would have more companies in the "major automakers" category other than Tesla and other 3 companies from the beginning of the previous century.

Ok, so what is your support for the idea that he knows what he's doing? Because Tesla still exists? Everybody and their dogs think they are experts but people that support Musk are smart laymen or informed experts?

Visit a Tesla store.

Go drive a Tesla.

Buy a Tesla and realize how smooth the purchasing process is.

Take it on a road trip and use the supercharger network.

Use their service centers.

Use their mobile service.

Use their energy products.

Now consider the fact that all this was engineered and built in 15 years, with lots of enemies with huge amounts of capital to make sure they fail, and yet here they are and every single item on this list is a leap of improvement compared to the status quo.

You have to try too hard not to realize that he sure knows what he is doing and fit the “haters gonna hate” club.

> It's funny how everybody and their dogs are now experts and think they know better than Musk how he should be doing things.

This was exactly my thought!

There is not a single person in the world who can advise Musk on how to enter the established car industry with a new company.

But hey, if people think they can advice Elon Musk, go right ahead.

I, on the other hand, would prefer to be advised by Elon Musk. Since that's now going to happen soon, I keep my eyes open and try to learn.

To understand the hilarity of this statement you really want to have read the last 3 Matt Levine posts about the saga of Musk's "plan" to take Tesla "private" while retaining the majority of its existing retail shareholders. I think Bloomberg has paywalled Levine now; he's worth it (I mean, he is in supremely excellent form discussing Musk's "going private" plan), but I subscribe to him via email and get them free. Maybe someone here has a link to them; they are fantastic.

Here are a few of the articles, in order. Bloomberg restricts you to 10 links a month, but you should be able to access them:

https://www.bloomberg.com/view/articles/2018-08-08/elon-musk...

https://www.bloomberg.com/view/articles/2018-08-09/musk-s-mo...

https://www.bloomberg.com/view/articles/2018-08-13/funding-f...

https://www.bloomberg.com/view/articles/2018-08-17/elon-musk...

Again, these are highly recommended and give you a glimpse of this entire farce from the finance perspective.

> Bloomberg restricts you to 10 links a month

(Not if you open them in a private window)

Ooh. That is a fantastic tip. Thank you.

I read most of the last article, and he indicates "harm" must be things like "murder", and since short sellers aren't killing they can't be doing anything that would be equated with causing harm. There's a little more gray area to "harm" than just "murder". Severe logical fallacy here.

His analysis is riddled with such fallacies. The other huge one is a conflation of the general with the specific, i.e.:

> the vast majority of the time, when a public-company chief executive officer complains that short sellers are sabotaging his company, he is talking nonsense

Sure, but we're not talking about the vast majority. We're talking about the most heavily shorted stock on a US exchange, and the one which entrenched players are most interested in seeing fail. Tesla is an outlier in myriad ways; deriving assumptions from the median makes no sense at all.

At any given moment in time, some company's stock will be the most shorted in the exchange. Do you have genuine evidence that Tesla shorts are really qualitatively different from other former "most shorted" title holders?

I think the actors who are eager to see Tesla and SpaceX fail are more powerful and motivated than is typical, but I acknowledge this is an unproven hypothesis.

However, Tesla does not need to be exceptional for the larger point to remain. Former heavily shorted companies have dealt with the same thing. Look at the war between Fairfax and hedge funds in the early 00s (similar claims, similarly evidence (i.e. circumstantial but unprovable), similar results (stock took hits and then jumped as financials improved).

https://www.theglobeandmail.com/report-on-business/fairfax-t...

Someone at TMC wrote up a more thorough and Tesla-analogous explanation if you are curious: https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-s...

the actors who are eager to see Tesla and SpaceX fail are more powerful and motivated than is typical

Why would they be?

I suppose it's possible to read it as declaring an absolute and exhaustive definition of "harm" to include "murder" and absolutely nothing else. But that feels like A) a reach and B) a deliberately uncharitable one at that.

The more charitable and more likely reading is poking fun at a CEO's hatred of people who bet against the CEO's company. Perhaps try re-reading that way?

Sorry, but I have a hard time praising a writer for throwing shade at the most prolific maker in our lifetime.

His prolificity as a maker is orthogonal to the practicality of his proposal and the legality of his statements, the things Matt Levine talks about

But an optimist and a pessimist would come to opposite conclusion based on same evidence. But pessimism generates more clicks.

What "clicks"? It's Matt Levine. You can't even click on his stuff easily anymore; you have to subscribe to it.

Don't you find that out _after_ you click?

For sure, we should be careful of biased reporting and also evaluate Matt's arguments critically. But you seemed to be suggesting that Musk's prolificity somehow means we shouldn't take any criticism against him seriously

Keep in mind a lot of makers, inventors, etc. are not very good at the CEO job.

It's probably unlikely that Jony Ive (a truly brilliant designer) would have any business trying to run Apple.

James Dyson, a great maker, isn't the CEO of Dyson (and hasn't been since 2001). He's the chief engineer. (see the nice article below that he wrote describing how he had to bring in outside operators once they hit scale [1])

Neither Nikola Tesla nor Edison demonstrated good skill at running businesses. Musk is not a greater maker than those two.

You don't want John Carmack running id Software's day to day operations, nor do you want Shigeru Miyamoto running Nintendo. At that level, you want to aggressively focus on what you're best at.

Even Henry Ford, who was a decently skilled business operator, was still not the best available option for running the day to day operations of his own company at scale. It's crazy hard to run an extremely large business well, and the level of skill it demands is every bit as rare as the maker-type talent.

I happen to agree with this Bloomberg article. What Musk needs is Alan Mulally or the equivalent (a Gwynne Shotwell if you will; an extremely difficult challenge, given the requirement that the person be compatible with Musk):

https://www.bloomberg.com/view/articles/2018-08-23/how-elon-...

[1] https://www.inc.com/magazine/201203/burt-helm/how-i-did-it-j...

Elon has a pretty good track record of CEOing SpaceX (12 years) and Tesla (15 years), two of the most impressive and impactful companies of our generation.

Tesla has never had a profitable year, yet the company's voting structure requires almost 90% of shareholders outside of Musk to vote to ever oust him. He has even more control of SpaceX, having majority ownership and a super-majority of voting shares. It's virtually impossible to unseat him as CEO, so pointing out that he's CEO doesn't really establish anything about his quality at holding that position.

That seems like an odd way to evaluate a CEO. I would evaluate more on what the company is able to achieve (yes, I understand Tesla's lack of profitability).

That's a non-sequitur answer. He's refuting your claim that you can evaluate Musk's ability from his tenure at those two companies, because both are structured such that he can retain control regardless of his performance. He's not providing you with a rubric for evaluating CEOs, but rather pointing out how your own rubric is flawed.

I don't understand. How is his retaining control based on the structure of voting rights related to his job performance?

Good question. You're the one that implied he must be a good CEO because he had been one for so long, which is silly if he can't be fired.

"Elon has a pretty good track record of CEOing SpaceX (12 years) and Tesla (15 years)"

I'm saying he's a good CEO because has been a fantastic one for 15+ years at 2 world-changing companies. He's made shareholders 10s of billions of $$ so obviously would not be fired.

The writer has an obligation to critique Musk and his company because it is publicly owned and needs to be held accountable.

Your criticism might have been valid if Tesla were a private organization. But it isn't. So it's not.

I think Levine has been pretty hit-or-miss on this saga. His line of thinking on short-seller narratives misses the point entirely:

> Elon Musk has been banging on for ages about how short sellers are trying to sabotage his company, Tesla Inc. [... examples and citations....] This does seem to be mostly nonsense. If you build lots of good cars and sell them for more money than it costs you to build them, then you will make a lot of money and no amount of desperate pushing of narrative will result in your destruction.

This is only relevant if you evaluate Tesla as a mature company that operates on fundamentals. Nobody sees it this way yet. The entire point of a short seller pushing a narrative is to influence the capital markets, ideally to prevent Tesla from getting funding or more realistically to worsen the terms it gets, to prevent it from reaching a state where it can operate on fundamentals.

It's perfectly fair to question the extent to which short sellers are working to influence things (or how successful they've been), but it's certainly not unprecedented[1], and just yesterday on the front page of HN was an ex-employee (who was highly critical of Musk), who felt Musk "isn't totally paranoid" because they had caught "bad actors" and found "advanced persistent threats in [their] network"[2].

Has Musk overreacted? Perhaps. Has he been wrong in his assumptions in some of the examples he's cited? Almost certainly. But that doesn't contradict the logic of the concern or make it "mostly nonsense."

[1]https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-s...

[2]https://twitter.com/atomicthumbs/status/1032944615475695616

> That said, my belief that there is more than enough funding to take Tesla private was reinforced during this process.

Is this some kind of threat or positioning towards actors somewhere? Is this like someone in a relationship saying, "I know I be with someone else if I wanted to, but this is working out for now."?

What's the point of all of this, besides saying that Tesla has lots of funding options?

This past week was about covering the legal angles so that Elon doesn’t go to jail while still attempting to mollify bulls.

Blame the shorts, blah, blah. "I could totally squeeze the shorts at 420 but I won't because I don't care even one bit about the shorts."

It's almost certainly an attempt to stave off the SEC investigation into misleading statements by Elon when he tweeted originally that funding was secured.

If Tesla was actually going private his "Funding Secured" tweet wouldn't be viewed with as much scrutiny. Instead, coupled with his on-going public threats against short sellers, that tweet is now even more likely to be viewed as intentional market manipulation.

This will only continue and reinforce the SEC investigation.

This does this opposite. This is the opposite of 'funding secured', because now he has to PROVE that funding actually was secured. It wasn't.

It reinforces the narrative that this was his choice about what is best for Tesla, and not a market-driven outcome to remain public in spite of a desire to privatize.

I think he is saying this because of the risk of his going to jail. If it comes out that he was bluffing, statements he made could very well be considered securities fraud since it amounted to an announcement on a public forum and he had cited a specific price. So by reiterating in an official press release that he had adequate funding but just chose not to do it, there's kind of a supporting evidence to defend himself against any SEC investigations.

Fined at worst. Jail is absurd unless he, like, sold a bunch of shares at the top or something (which he didn't).

Martin Shkreli is serving seven years in prison for less.

Meanwhile Brian Krzanich is wandering around as free as a coconut on open water after selling as much as he legally could right before the spectre/meltdown announcement.

It's very difficult to say that what Krzanich did was related to Spectre/Meltdown given what we now know was going on. It seems a lot more likely he was lining up his position to resign.

Martin Shkreli is also much more hate-able, less charismatic, and less wealthy. It shouldn't make a difference, but it does.

Elon Musk has an obvious technical competence that's very appealing to those who appreciate those skill sets. It's like Paul Graham -- when you listen to him speak, he's mostly soft-spoken and measured (I have no explanation for Musk's Twitter, which seems much more... hyperbolic). It's clear to me this isn't charisma exactly -- he doesn't strike me as charming, just like he cares a lot about understanding his businesses in tremendous detail.

You're absolutely right that this shouldn't matter. But since charisma _does_ matter, the SEC just has to paint him as an angry anorak trying to punish short sellers. I don't think that picture is hard to paint (I can't see into his mind, so obviously I have no idea if it has even the smallest element of truth).

Shkreli is serving that time primarily because he was an unrepentant arrogant ass. He had several opportunities to let people forget about him, but he kept marching back and forth in front of the firing squad telling them all what idiots they were.

Justice was never blind, but I do find it disturbing we've lost all pretense.

I understood this comment as Elon reaffirming to his shareholders that he was not trying to defraud them, and that there actually was adequate funding to take Tesla private. This could also be part of a preemptive legal defense against the SEC in case Elon is formally investigated / questioned. However I feel that the SEC would be more interested in the specific wording of the "funding secured" tweet, which was blatantly false in light of Tesla's previous post [1] (For those who aren't following along: Elon basically only had a verbal offer to take Tesla private from Saudi investors, not anything in writing).

It's also worth mentioning that the idea of breaking long-term financial news for a Fortune 500 company via Twitter of all places is highly unorthodox and suspect in its own right, so I doubt this comment would have much effect in practice.

[1] https://www.tesla.com/blog/update-taking-Tesla-private

> It's also worth mentioning that the idea of breaking long-term financial news for a Fortune 500 company via Twitter of all places is highly unorthodox and suspect in its own right, so I doubt this comment would have much effect in practice.

Elon can't have this both ways, though. Tesla has disclosed that it will use social media for financially material announcements, and Elon has embraced this. It can't be legitimate most of the time and illegitimate when it makes for a convenient defense.

Personally, I don't think Elon's intention was to defraud -- I think he was impulsive and careless, and I expect the SEC will reach the same conclusion. But I think if he's going to use Twitter to talk about such things, his tweets need to carry the same weight as an equivalent SEC filing.

I also don't think pumping up stock price to avoid a convertible bond conversion is fraud. And of course OJ is innocent too.

This is clearly not what happened, and never was planned to happen.

The bonds don’t convert for another year.

You don’t send a tweet about something that will immediately have a thousand people banging down your door for answers and expect it to move the stock price a year later.

There was zero personal financial incentive for Musk to deceive with the tweet.

As it happens, the criminal statute requires that a purchase or sale of securities takes place, so I can’t see how it applies.

> But I think if he's going to use Twitter to talk about such things, his tweets need to carry the same weight as an equivalent SEC filing.

A tweet is not an SEC filing and it can never be one. It’s 140 characters typed on your phone. It is not reviewed by corporate counsel. It is not reviewed at all.

I’m going to step out on a limb and say this is an important mode of communication. I like having this window into Musk’s operations.

But a tweet is just a tweet. It’s never the whole story. Here we are dissecting two single words, and some people are saying jail a man.

I say no two words on Twitter can jail a man. Fine him a million dollars a word if you have to.

> I say no two words on Twitter can jail a man.

What about "I confess"? :)

Nevertheless, I think the spirit of your argument is mostly valid. Musk is doing the equivalent of Roosevelt's fireside chats. Granted, he should be smarter than to tweet willy-nilly, but I suppose we can say the same for just about everybody on Twitter nowadays...

> I say no two words on Twitter can jail a man. Fine him a million dollars a word if you have to.

By convention, with two words you're 1/3 of the way to a hanging.

> A tweet is not an SEC filing and it can never be one. It’s 140 characters typed on your phone. It is not reviewed by corporate counsel. It is not reviewed at all.

Right, but this is exactly the downside of disclosing things via Twitter. If Elon uses tweets and SEC filings interchangeably (that is what he's doing here -- this would ordinarily be disclosed in an 8-K), the rules are going to apply to both. It's not that I'm unsympathetic to his intentions, but the SEC can't carve out exceptions for impulsive behavior just because it happened on social media -- traders are acting on this information in real time and need to be able to trust it.

(I agree the calls for imprisonment are beyond insane; I focus on the Twitter vs 8-K part of the story because I find it more interesting, and I'd like to see more CEOs speak directly to followers as Elon does but with a bit less impulsivity).

> It's also worth mentioning that the idea of breaking long-term financial news for a Fortune 500 company via Twitter of all places is highly unorthodox and suspect in its own right

The SEC has indicated that Twitter is an approapriate venue for making public statements, as long as the company has indicated that investors should look to Twitter for updates. Tesla did indicate this previously, according to news reports I recall from last week.

I trust Twitter more than just about anyone to ensure no one is getting the jump on seeing the information before anyone else.

And I’ll also mention, Elon has blocked a few user accounts on Twitter. I don’t see a problem with this as anyone can watch Elon’s tweets in incognito mode. The law requires the notice is public, not universal. I can’t think of anything more public than a tweet.

I think the best evidence that Elon was not trying to defraud investors, besides the fact that he did not trade on the news and gained nothing from it, is that it was a contemporaneous tweet he made on his way to the airport.

No, he wasn't trying to defraud his shareholders. Quite the opposite - defraud his skeptics aka short sellers.

He’s saying it because if it was totally untrue then he likely committed massive securities fraud

Elon needs a vacation. Any employee would've been fired for this kind of behavior.

I agree, both true. But it would be a terrible shame if Tesla lost Elon.

His is a tremendous asset, even though he doesn’t always make the best choices.

The SEC will definitely not be amused.

There is not a shred of apology for his tweet that caused havoc on Wall Street - but big and small investors were totally taken aback.

It's a lot of trouble to go through to get people to forget you called some Thai firefighter a pedo on Twitter...

Love that this was posted at 11PM EST on a Friday. Almost like they wanted it to go unnoticed :D

This is the responsible thing to do, and what he should have done with the original "announcement". If you announce it after market close on a Friday, there's plenty of time for traders and institutions to chew on it before the opening bell Monday.

I am surprised this did not remain on the front page long enough.

Any particular reason this thread is getting pushed off the front page? It has twice as many votes as something else above it that is 5x older.

Is it normal for a public company to be so beholden to the whims of its CEO?

He is also a very large shareholder

Usually, the Board is a check on the CEO. Usually.

Apple was from time to time, but Jobs fortunately lived and died before the time where people said anything that came to mind on Twitter so it seemed much more tame.

Who would you replace him with without the value of the company diving off a cliff?

Fairly often, especially for founding CEOs since so much of the company tends to be tied to the founders. And generally when a founder CEO is ousted there's two reasons: 1) there's an incredible amount of bad press (think of Uber and Travis or Papa John's John Schnatter) or 2) the board/investors think that they need to replace the founder with an experienced CEO (think Google). Here, only the first applies.

Elon Musk wasn't/isn't the founder of Tesla ...

Well crap. Thanks for pointing that out.

When the CEO by holds as much of the voting stock as Elon does, sure. I mean, Alphabet is probably more beholden to the whims of it's CEO.

Is it usual for the CEO to be as visibly mercurial as Musk? Not so much.

Yes. It's not normal for the CEO of a publicly traded company to be quite so whimsical.

$TSLAQ it is.

https://news.ycombinator.com/item?id=17836641

I saw that comment before, and I disagree with it. I don’t care what some sample of their first pass yield is as long as it’s improving and that it hits or exceeds industry norms before they go bankrupt. The mere fact that they have a bad FPY is more indictative of how fast they are scrambling to get this production line going, but if they catch the errors before the cars go out the door then it’s simply an expense they’d damn well be reducing as time goes on. Tesla has had shaky launches on every other platform they’ve released but now they manufacture the S and X platforms effectively. If they can get past the rough period with the Model 3 they will have three high demand platforms they are producing in volume. That’s something I believe they can do, which is why I’m a shareholder.

"they will have three high demand platforms they are producing in volume."

This is false. S & X sales are flat/slightly decreasing - http://carsalesbase.com/us-car-sales-data/tesla/tesla-model-...

Tesla is in awful financial shape - https://seekingalpha.com/article/4195452-bulls-may-noticed-t...

Tesla is on the verge of bankruptcy.

I see by your figures that you’re correct, sales of the S are flat. However it seems they are selling more luxury sedans than their competition so flat sales do not mean it’s not high demand.

Do note that their quarterly delivery rates are increasing. Ostensibly from Model 3.

Q2 2015 11,532 Q3 2015 11,603 Q4 2015 17,400 Q1 2016 14,820 Q2 2016 14,370 Q3 2016 24,500 Q4 2016 22,200 Q1 2017 25,000 Q2 2017 22,000 Q3 2017 26,150 Q4 2017 29,870 Q1 2018 29,980 Q2 2018 40,740

https://www.statista.com/statistics/502208/tesla-quarterly-v...

You don't think some of the Model S sales have just gone on high end Model 3s?

Main issue seems to be quality of Model 3s and

> Tesla’s pitch for several years has been that the company will grow to 1 million unit in sales in 2020. With a potential future China factory not producing any meaningful quantities of cars until 2021, investors need to downgrade the growth prognosis from 1M cars in 2020 to 600K cars in 2021.

Knock a bunch of shorts over and take a slap on the wrist, wonder if this was a calculated business move?

Any outcome of an SEC investigation isn't a slap on the wrist, and that's not even counting civil investor lawsuits.

https://www.cornerstone.com/GetAttachment/2cd97eeb-1a32-4b51...

I'm not sure why you linked a 1997 PDF.

To give you an idea of what a 10b-5 violation looks like. I assure you, there isn't a cost of living increase for SEC violations since 97, this is precedent and having spent the day trying to understand if I'd make this business move, I still hold firm that a 10b-5 violation won't run more than $20-50mill very worst case. a wrist slap.

How much does that work out to per word?

Depends on how much you value getting 1.3bill in shorts off your back (and into court, I'd suppose)

What does this mean for the stock price? Sell off?

The Tesla episode on Dirty Money is going to be lit.

Many opine that Musk deserves punishment at the hand of the SEC. I disagree, profoundly. His post appears to have been ill-considered, may have been wishful thinking, was possibly driven by spite, and/or even written under the influence of drugs. So what? the government has no constitutional power to threaten or punish people for what they say nor for what they think apart from what they say, except for a few extremely limited instances such as a direct threat of force or libel.

The SEC embodies the modern drift of the administrative state at its worst; its many regulations are not laws passed by Congress, which is the only branch empowered to write legislation. One of the most famous and often used SEC rules is Rule 10b-5, which "prohibits fraud in securities transactions as well as insider trading." Fraud is a form of crime, but trading on one's knowledge involves neither force nor fraud and is simply a manifestation of our basic rights to talk and trade, regardless of what others may or may not know.

The proper rule of markets since Roman time is "Caveat Emptor"; don't rely on nor seek to control or punish the morass of conversations at the local inn or at Twitter. Many thoughtful economists and political philosophers suggest that by and large all of the federal securities laws (originated as part of the New Deal in the 1930s) should be abolished. It may be worth considering, when one small online comment becomes fodder for public calls to have the government severely punish a CEO.

He is the CEO and made a materially false statement, while the market was open and investors who believed him bought at a high of $380 based on a promise of a buyout at $420, only to have it plummet days later. The odds are pretty good that it will dip further when markets open Monday.

Actions have consequences.

> The SEC embodies the modern drift of the administrative state at its worst; its many regulations are not laws passed by Congress, which is the only branch empowered to write legislation.

The SEC is empowered by Congress to enact regulation, see the Administrative Procedure Act.

Anyways, as a director of a publicly traded company, Elon Musk is well aware of information disclosure rules.

Your argument is couched in libertarian fantasy, not reality.

This is very nearly "yelling fire in a crowded theater", he's deliberately making false statements (or statements he should have known to be false) from a position of authority with the intention of manipulating the stock market.

Reply on news.ycombinator.com